CandleFocus Glossary Editor
Fitch Ratings is a global credit rating agency that assesses the financial soundness of organizations. It was founded in 1914 and is one of the big three international rating agencies, along with Moody’s and Standard & Poor’s. Fitch specializes in issuing credit ratings for both corporate and fixed-income securities, such as bonds and loans.
Fitch uses a letter system to determine the creditworthiness of organizations. The highest rating a company can receive is AAA, which signifies that it has a very high quality and reliable cash flows. A rating of BBB indicates adequate financial performance and risk management, while a rating of BB is considered lower quality. Ratings below CCC are known as non-investment grade, or “junk”, while those below B- are considered distressed or defaulted.
Fitch Ratings’ opinions help investors make decisions about their investments by providing an independent assessment of risk. Fitch Rating’s letters are linked to a company’s creditworthiness, but also its ability to meet its obligations in the future. If a company receives a low rating, it’s usually more difficult for it to attract investors, as there’s a greater chance of default.
In order to assess a company, Fitch Ratings looks at a broad range of factors, including capital structure, loan-to-value ratio, leverage, liquidity, and management. It also considers any custodian or third-party service providers and their security measures, as well as an assessment of the company’s financial position, business model, and market conditions.
Overall, Fitch Ratings is an important part of the modern investment arena. Its ratings help investors analyze potential investments and make well-informed decisions. With its rigorous analyses and strict ratings criteria, Fitch Ratings offers a reliable, independent assessment of a company’s credit worthiness.
Fitch uses a letter system to determine the creditworthiness of organizations. The highest rating a company can receive is AAA, which signifies that it has a very high quality and reliable cash flows. A rating of BBB indicates adequate financial performance and risk management, while a rating of BB is considered lower quality. Ratings below CCC are known as non-investment grade, or “junk”, while those below B- are considered distressed or defaulted.
Fitch Ratings’ opinions help investors make decisions about their investments by providing an independent assessment of risk. Fitch Rating’s letters are linked to a company’s creditworthiness, but also its ability to meet its obligations in the future. If a company receives a low rating, it’s usually more difficult for it to attract investors, as there’s a greater chance of default.
In order to assess a company, Fitch Ratings looks at a broad range of factors, including capital structure, loan-to-value ratio, leverage, liquidity, and management. It also considers any custodian or third-party service providers and their security measures, as well as an assessment of the company’s financial position, business model, and market conditions.
Overall, Fitch Ratings is an important part of the modern investment arena. Its ratings help investors analyze potential investments and make well-informed decisions. With its rigorous analyses and strict ratings criteria, Fitch Ratings offers a reliable, independent assessment of a company’s credit worthiness.