![]() ![]() ![]() ![]() The Financial Health Rating (FHR) index, numbered from 0 to 100, provides a short-term view of a company’s estimated probability of default based on financial statements and leveraged against industry-specific models.Īn FHR score under 40 indicates a company is at high risk for default, with a score from 0 to 19 at very high risk. These two companies are weak in both quantitative measures Rapid Ratings developed. Mattress Firm and Wayfair are top on his list of retailers to watch, based on the company’s proprietary algorithm that provides two measures of a company’s financial health. “Healthy companies are in the best position to withstand a shock,” adding that his company’s ratings are measures of financial health and not credit ratings. “Financial corporate health is a good deal like physical health,” he explained. That’s when we’ll see an uptick in bankruptcies,” he continued. “On the edge are highly leveraged retailers with debt that can’t be refinanced and are doing poorly operationally. “I suspect that will be the story over the next 24 months,” James Gellert, chairman and CEO of Rapid Ratings International, a research and analytics firm that assesses the financial health of thousands of public and private companies worldwide, shared. Increasingly, the question isn’t if a recession occurs but when. “I don’t think it is going to be a bloodbath in retail, but if we are headed for a recession, that is when the snowball starts to go downhill and picks up speed,” he continued. ![]()
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