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4. THE METHODOLOGY

OUR RATING METHODOLOGY

Our analyses of companies chiefly rest on three pillars: an assessment of management, the business risk and the financial risk.

With the product/market risk which it pursues, the company’s management determines the business risk, while the financial risk hinges on the funding strategy.

This analysis comprises numerous quantitative and qualitative determinants which are weighted according to the individual situation and the company’s specific business model.

Quantitative factors chiefly comprise cashflow-based indicators, liquidity ratios, interest and fixed-cost coverage and capital structure and debt ratios.

These metrics are viewed over time and on a peer group basis.

The main qualitative factors comprise sector and competitive trends, corporate strategy, management quality and the company’s financial flexibility.

EULER HERMES RATING AT A GLANCE

1. THE BENEFITS

Access to new sources of funding thanks to high-quality ratings

> Benefits of an Euler Hermes rating

2. THE PRINCIPLES

Quality and confidentiality coupled with absolute neutrality.

> Our guiding principles

3. THE PROCESS

The five phases of the rating process at a glance.

> Our rating process

4. THE METHODOLOGY

Objective weighting of quantitative and qualitative factors.

> Our rating methodology