Developed specifically for movable property leasing companies, the procedure applied by GBB-Rating produces an objective, verifiable and professional credit assessment that pays due regard to the subject's individual characteristics while focusing on a forward-looking analysis.
The rating system of GBB-Rating encompasses two components, namely "financial profile" and "business profile".
The financial profile is assessed in a quantitative analysis of the annual financial statements based on indicators of the earnings position and capital position. In view of the very limited information furnished by the annual financial statements of leasing companies, the analysis also gives consideration to intrinsic value, calculated according to the scheme of the Federal Association of German Leasing Companies (BDL). Depending on the timing of the rating, current interim figures are analyzed as well.
The business profile is evaluated by analyzing chiefly qualitative and forward-looking external and internal influencing factors. The main criteria are market factors, organizational aspects and the risk profile. To facilitate an objective assessment, these criteria are subdivided into individual attributes. In particular when the business profile is being examined, the particularities of the individual leasing company are assessed, such as its asset portfolio and contract structures.
The risk profile likewise plays a crucial role when leasing companies are being rated. When the risk profile is being assessed, an inventory of all the credit, market and operational risks is produced. The experience accumulated by GBB-Rating indicates that the most critical risk types are those relating to counterparties, assets and interest rate changes. Following changes to the tax depreciation rules, accounting risks (e.g. loss-free measurement of leasing assets) are also gaining in importance.
The intermediate scores arising from the analysis of the financial and business profiles are finally weighted and aggregated to obtain an overall score. Given the forward-looking nature of the business profile, it carries greater weight in the rating result.
Practice has demonstrated the ability of the GBB rating system to reflect and assess different business structures appropriately and in a comparable manner.
When interpreting the financial data, the analysts have at their disposal a comprehensive rating manual.
The indicators applied by GBB-Rating focus on the two key aspects of a leasing company's financial strength, namely its long-term earning capacity and the capital available to cover risks. In this context, the reference variables are the risk exposure and the value-added, as expressed by the sum of gross profit and change in intrinsic value. The company's efficiency (operating costs) and risk tolerance (risk-induced costs) are among the factors used to determine the necessary amount of income.
Alongside the indicators, which also include figures extracted from certified annual financial statements, the evaluation of the financial profile gives consideration to quarterly figures, projections and internally reported metrics.
The business profile is evaluated by analyzing chiefly qualitative and forward-looking external and internal influencing factors. Supporting indicators are used to perform plausibility checks on the analyses and evaluations. The assessed attributes are integrated according to a defined standard, which can be adjusted for business model particularities. This strategy achieves the necessary objectivity while offering the flexibility required to give appropriate consideration to specific features.
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