YRC WORLDWIDE INC. modeFinance Edificio A AREA Science Park, Padriciano 99 34149 Trieste ITALY Tel: +39 040 3755337 Fax: +39 040 3756741 mail: info@modefinance.com web: www.modefinance.com
Company name Identification number Country ZIP code and city Address Phone Web site Email Legal form NACE 2 Sector Listed mF Credit limit
YRC WORLDWIDE INC. US480948788 United States of America 66211 - OVERLAND PARK P.O. Box 7563 +1 913 696 6100 www.yellowroadway.com investor@yellowcorp.com Not available 4941 - Freight transport by road Listed Not eligible for credit on the base of the available informations
Turnover (the) Creditworthiness scale Extremely strong(AAA)
C
Fundamental Credit Rating:
Rating Probability of default Confidence Level
31/12/2010
31/12/2009
31/12/2008
3,244,006
3,381,246
6,424,089
C 57.00% 100%
CC 42.00% 100%
CC 42.00% 100%
Leverage ratio
-28.49
17.14
7.24
Total asset/Total liabilties
0.96
1.06
1.14
Current ratio
0.77
0.85
0.84
Quick ratio
0.77
0.85
0.82
Very strong(AA) Good(A)
Solvency ratios
Adequate(BBB) Sufficient(BB) Weak(B) High danger(CCC) Pathological(CC) Extremely pathological(C) Non return(D) Not available
Liquidity ratios
Profitability and economic equilibrium ratios Return on investement ROI (%)
-9.28
-24.25
-26.87
Return on equity ROE (%)
-336.21
-372.04
-202.80
Asset turnover
1.65
1.61
2.25
Interest paid weight
-0.65
-0.22
-0.08
Gross Profit/Operating revenue
0.06
-0.06
0.07
-1.53
-4.50
-13.23
Interest Coverage ratios EBIT interest coverage ratio
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Sector Analysis Company
Healthy
Balanced
Vulnerable
Risky
-28.49 0.96
0.69 2.45
2.09 1.48
5.68 1.15
-3.12 0.98
0.77 0.77
1.92 1.87
1.20 1.17
0.99 0.96
0.74 0.72
-9.28 -336.21 1.65 -0.65 0.06
13.88 15.53 1.93 0.02 0.15
4.92 8.32 1.81 0.18 0.12
0.77 -1.41 1.82 0.30 0.11
-9.59 -111.60 2.26 -0.13 0.06
-1.53
59.63
4.34
0.13
-5.40
0 37 12 25 C
2 47 21 33 1,871 A
2 52 25 32 8,331 BB
3 55 30 31 5,128 B
2 50 36 22 1,098 CC
Solvency ratios Leverage ratio Total asset/Total liabilties
Liquidity ratios Current ratio Quick ratio
Profitability and economic equilibrium ratios Return on investement ROI (%) Return on equity ROE (%) Asset turnover Interest paid weight Gross Profit/Operating revenue
Interest Coverage ratios EBIT interest coverage ratio
Cash Conversion Cycle (days) Days Sales Of Inventory (DIO) Days Sales Outstanding (DSO) Days Payable Outstanding (DPO) Cash Conversion Cycle (DIO + DSO - DPO)
Numer of analyzed companies (Average) Rating
The sector has been chosen according to: international companies in the sector NACE 2 4941 with financial data of year 2009.
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 2
Sector Analysis - Graphs
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 3
Balance Sheet BALANCE SHEET (th e) Accounting practice Exchange rate USD - EUR Total assets Fixed assets Intangible fixed assets Tangible fixed assets Other fixed assets Current assets Stocks Debtors Other current assets Cash & cash equivalent Shareholders funds Capital Other shareholders funds Total liabilities Non current liabilities Long term debt Other non-current liabilities Current liabilities Loans Creditors Other current liabilities Total shareh. funds & liab.
31/12/2010 Local GAAP 0.74839 1,971,778 1,358,377 104,419 1,160,436 93,522 613,401 0 331,163 282,238 107,033 -71,728 0 -71,728 2,043,506 1,242,509 626,599 615,910 800,996 166,796 110,097 524,103 1,971,778
31/12/2009 Local GAAP 0.69416 2,104,729 1,508,575 111,347 1,264,203 133,024 596,154 0 307,382 288,773 67,880 116,056 0 116,056 1,988,674 1,287,696 649,578 638,119 700,977 136,837 107,366 456,775 2,104,729
31/12/2008 Local GAAP 0.71855 2,849,835 1,800,395 132,765 1,581,503 86,126 1,049,440 17,762 601,463 430,216 233,778 345,945 448 345,496 2,503,890 1,251,727 565,794 685,933 1,252,163 298,427 239,930 713,806 2,849,835
NET DEBT (th e) Short term debts Long term debt Cash & cash equivalent Net debt
31/12/2010 166,796 626,599 107,033 686,363
31/12/2009 136,837 649,578 67,880 718,534
31/12/2008 298,427 565,794 233,778 630,443
Working capital Net Current Assets
31/12/2010 -187,595
31/12/2009 -104,823
31/12/2008 379,295 -202,723
Days Sales Of Inventory (DIO) Days Sales Outstanding (DSO) Days Payable Outstanding (DPO) Cash Conversion Cycle (DIO + DSO - DPO)
31/12/2010 0 37 12 25
31/12/2009 0 33 12 21
31/12/2008 1 34 14 21
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 4
Income Statement INCOME STATEMENT (th e) Accounting practice Exchange rate USD - EUR Sales Revenues growth (%) Other revenues +/- variation in inventories and contract in progress + Fixed assets own construction capitalized Operating revenue / turnover Total operating costs Costs growth (%) Service costs Material costs Costs of employees EBITDA Depreciation EBIT Financial P/L Financial revenue Financial expenses Interest paid P/L before tax Extr. and other P/L Extr. and other revenue Extr. and other expenses P/L before tax + Extr. and other P/L Taxation P/L for period
31/12/2010 Local GAAP 0.74839 3,244,006 -4.1 0
31/12/2009 Local GAAP 0.69416 3,381,246 -47.4 0
31/12/2008 Local GAAP 0.71855 6,424,089 0
3,244,006 3,425,788 -12 -20,035 161,748 -181,783 -120,268 120,268 119,138 -302,051 -15,807 -317,857 -76,700 -241,157
3,381,246 3,885,811 -41 -315,739 188,825 -504,565 -118,048 118,048 112,155 -622,613 8,493 -614,120 -182,342 -431,778
6,424,089 7,194,174 155,164 925,248 -770,084 -53,767 3,085 56,852 58,202 -823,852 -122,283 -701,569
Costs of Good Sold Gross Profit Other Operating Expenses
31/12/2010 3,050,810 193,196 374,978
31/12/2009 3,598,593 -217,346 287,218
31/12/2008 5,989,217 434,873 1,204,957
Cash flow Added value
31/12/2010 -79,410 -
31/12/2009 -242,952 -
31/12/2008 223,679 -
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 5
Evolutions and trends
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 6
Qualitative information
Full overview
YRC Worldwide Inc. is a holding company with interests in the provision of transportation services. The company was incorporated in 1983 and was formerly known as Yellow Roadway Corporation. It has a registered head office in Overland Park, Kansas in the United States of America. The company, through its brands including Yellow Transportation, Roadway, Reimer Express, USF, New Penn and YRC Logistics, provides a wide range of asset and non - asset - based transportation services. The portfolio of brands represents a comprehensive array of services for the shipment of industrial, commercial and retail goods domestically and internationally. The company’s core purpose is to make a global commerce work by connecting people, places, and information. The YRC Worldwide brands partner with several organizations to provide safe transportation of hazardous materials. These organizations include the American Chemistry Council, Haz - Mat One, Cooperative Hazardous Materials Enforcement Development program (COHMED) of the Commercial Vehicle Safety Alliance (CVSA), and Chemtrec. The company also belongs to Responsible Care Partnership Program of the American Chemistry Council; and SmartWay Transport Partnership, a voluntary program between various transportation industry sectors and the federal Environmental Protection Agency addresses key national concerns to improve energy security and energy savings. The company is a recipient of 2006 Environmental Excellence Award from the Environmental Protection Agency for significant improvements in fuel economy and environmentally sensitive supply chain management strategies by Meridian IQ. The company operates technology centers in three primary locations: Overland Park KS, Akron OH, and Chicago IL and employs technology approximately 66,000 people in the transportation and logistics industry. The company supports various organizations and institutions including American Heart Association, whose mission is to build healthier lives, free of cardiovascular diseases and stroke; Christina’s Smile Children’s Dental Clinic, a program designed to deliver quality comprehensive charitable dental care to children in need in the communities; Gifts In Kind International, the seventh - largest charity in the US and a global leader in new products philanthropy; and Heart to Heart International, a leading global humanitarian organization that works to improve health and to respond to the needs of disaster victims worldwide.
History
Formerly known as Yellow Roadway Corporation.
Primary business line
Holding company with interests in the provision of transportation services.
Secondary business line
Not available.
Main activity
Services.
Secondary activity
Not available.
Main products and services
Not available.
Size estimate
Not available.
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 7
Strategy, organization and policy
To make a global commerce work by connecting people, places, and information.
Strategic alliances
American Chemistry Council; Haz - Mat One; Cooperative Hazardous Materials Enforcement Development program (COHMED) Of the Commercial Vehicle Safety Alliance (CVSA); Chemtrec.
Membership of a network
Not available.
Main brand names
Yellow Transportation; Roadway; Reimer Express; USF; New Penn; YRC Logistics.
Main domestic country
United States Of America.
Main foreign countries or regions
Not available.
Main production sites
Not available.
Main distribution sites
Not available.
Main sales representation sites
Not available.
Main customers
American Heart Association; Christina’s Smile Children’s Dental Clinic; Gifts In Kind International; Heart to Heart International.
Auditor/Advisor/Bank type Auditor Transfer Agent
KPMG LLP UMB Bank
Board Mr William D Zollars Mr Dennis E Foster
function Chairman of the Board, President, Chief Executive Officer Director
date of birth -
nationality -
continued on next page ...
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 8
Mr Eugene I Davis Mr John A Lamar Mr Mark E Holliday Mr William L Trubeck Mrs Beverly K Goulet Mrs Marnie S Gordon Mrs Teresa Ghilarducci
function Director Lead Director Director Director Director Director Director
date of birth -
nationality -
Sharehoders (the first twenty shareholders ordered by Direct %) CDI CORP Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 5.32 -
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
926 375 800 2008/02
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2,018 1,830 9,500 2010/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2010/09
PRIVATE MANAGEMENT GROUP INC, THE via its funds Rating: Country ISO code US Operating revenue (MIL $) NACE Rev. 2, Core code Total Assets (MIL $) Direct % Number of Employees Total % 2.21 Information date
1 9 2010/09
VANGUARD GROUP, INC. THE via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 3.74
ZIMMERMAN JAMIE RACHEL via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
3.07
JP MORGAN CHASE & CO. via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.80
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
100,434 2,031,989 222,316 2010/09
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 9
STATE OF CALIFORNIA via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.55
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2010/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
84,431 1,258,128 272,200 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
3,823 41,050 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2010/09
GEODE CAPITAL MANAGEMENT, LLC via its funds Rating: Country ISO code US Operating revenue (MIL $) NACE Rev. 2, Core code Total Assets (MIL $) Direct % Number of Employees Total % 0.33 Information date
0 2 2010/09
BIRMIWAL ASSET MANAGEMENT INC via its funds Rating: Country ISO code US Operating revenue (MIL $) NACE Rev. 2, Core code Total Assets (MIL $) Direct % Number of Employees Total % 0.29 Information date
0 1 2010/09
WELLS FARGO & COMPANY via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.42
FMR LLC via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.41
PINNACLE HOLDINGS LLC via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.34
GOLDMAN SACHS GROUP, INC via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.22
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
42,893 848,942 32,500 2010/09
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 10
BANK OF AMERICA CORPORATION via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.18
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
114,119 2,223,299 283,717 2010/09
BANK OF NEW YORK MELLON CORPORATION via its funds Rating: Country ISO code US Operating revenue (MIL $) NACE Rev. 2, Core code Total Assets (MIL $) Direct % Number of Employees Total % 0.17 Information date
13,056 212,224 42,200 2010/12
GMT CAPITAL CORP. via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.17
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
1 14 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
0 2 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
239 653 2010/12
TIG ADVISORS, LLC via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.13
FIRST NEW YORK SECURITIES LLC via its funds Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 0.11
Subsidiaries (the first twenty subsidiaries ordered by Direct %) EXPRESS LANE SERVICE INC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 100.00 100.00
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
2008/12
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 11
YELLOW ROADWAY RECEIVABLE FUNDING CORPORATION Rating: Country ISO code US Operating revenue (MIL $) NACE Rev. 2, Core code Total Assets (MIL $) Direct % 100.00 Number of Employees Total % 100.00 Information date
2008/12
YRC ASSOCIATION SOLUTIONS INC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 100.00 100.00
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2008/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2008/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2008/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2008/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
3 2010/12
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
4 2010/09
YRC ASSURANCE CO LTD Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
BM 100.00 100.00
YRC ENTERPRISE SOLUTIONS GROUP INC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 100.00 100.00
YRC MORTGAGES LLC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US 100.00 100.00
GLOBE.COM LINES LLC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO
OPK INSURANCE CO. LTD Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 12
REIMER EXPRESS LINES LTD Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
CA MO -
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
243 1,500 2009/03
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2008/08
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2,395 1,441 21,000 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2,700 2009/04
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
18 2010/11
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
8,742 5,734 350 2010/04
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
62 450 2010/06
SHANGHAI JIAYU LOGISTICS LTD Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
CN MO
USF CORPORATION Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
USF REDDAWAY INC. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO
YELLOW CUSTOMER SOLUTIONS INC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
YELLOW ROADWAY TECHNOLOGIES, INC. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
YELLOW TRANSPORTATION OF ONTARIO INC Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
CA MO -
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 13
YELLOW TRANSPORTATION, INC. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
3,390 1,150 1,000 2008/08
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
0 24 2010/02
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
2010/10
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
0 5 2010/09
Operating revenue (MIL $) Total Assets (MIL $) Number of Employees Information date
0 2 2010/11
YRC ENTERPRISE SERVICES, INC. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
YRC INC. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
YRC INTERNATIONAL INVESTMENTS, INC. Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO
YRC LOGISTICS Rating: Country ISO code NACE Rev. 2, Core code Direct % Total %
US MO -
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 14
MORE rating guide General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk factors. The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial companies by using data included in financial statements. The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the model are obtained by applying newly developed numerical methodologies, drawing together financial theory, data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective algorithm that produces a classification of each company, by taking into account any attributes (such as sector and country) characterizing a firm. The model gives the opportunity to assign a rating to a company even without considering a complete data analysis and allows to process quality information. It induces a better understanding of a company s strength and weakness thanks to sophisticated data mining tools and taking into account the analysts knowledge. The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium between the different aspects, better will be the final rating. This is done studying, evaluating and aggregating the most important sections of the financial and economic behavior of a company as: profitability, liquidity, solvency, interest coverage and efficiency.
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 15
Rating scale Rating class
Rating Macro class
The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent economic and financial flow and fund equilibrium.
AAA
AA
Healthy
A
BBB Balanced BB
B Vulnerable CCC
D
The company has very strong creditworthiness. It also has a good capital structure and economic and financial equilibrium. Difference from ’AAA’ is slight. The company has a high solvency. The company is however more susceptible to the adverse effects of changes in circumstances and economic conditions than companies in higher rated categories. Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial commitments could be affected by serious unfavourable events. A company rated ’BB’ is more vulnerable than companies rated ’BBB’. Furthermore the company faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions. The company presents vulnerable signals with regard to its fundamentals. Adverse business, financial, or economic conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments. A company rated ’CCC’ has a dangerous disequilibrium on the capital structure and on its economic and financial fundamentals. Adverse market events and an inadequate management could affect with high probability the company’s solvency. The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the company’s strong disequilibrium could increase.
CC
C
Assessment
Risky
The company shows considerable pathological situations. The company’s capacity to meet its financial commitments is very low. The company has not any longer the capacity to meet its financial commitments.
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 16
Fundamental Credit Rating Ratios Solvency ratios Leverage ratio Assets to debt Financial ratios Fixed Assets coverage ratio Liquidity ratios Current ratio Quick ratio
Measures the level of total liabilities of the company in comparison with equity. Indicates company s solvency. The company shows a level of deficit when the value of this ratio is under one unit. Only for holdings. It measures the capital structure i.e. whether a company covers the fixed assets with long term capital. The current ratio measures whether a company has sufficient short-term assets to cover its short-term liabilities. The quick ratio compares current liabilities only to those assets that can be readily turned into cash.
Profitability and economic ratios Return on Investement(ROI) It measures the profitability of company investments without regard to the way the Return on Equity(ROE) Asset turnover Profit margin Interest coverage ratio Interest Paid coverage
investment is financed. It measures the profitability of the equity. It indicates the investments turnover with regard to sales. The level assumed from the ratio depends on the sector in which the company operates. It indicates the profitability of the sales. Indicate the ability of the company to cover interest expenses through the economic margins (Gross profit and EBIT) and through the cash flow from operating activities.
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 17
mF Credit Limit mF Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial relationship with the analyzed company with an outlook of one year. modeFinance used the following values associated with the company analyzed while computing the credit limit: • Size; • Years in Business; • Average number of suppliers; • Liquidity of the company and the comparison with its sector;; • The funds dedicated to be paid to suppliers; • The likelihood that a company may pay its debts in the next 12 months (MORE Ratings). The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual public data. This value should be reviewed by paying attention at the Confidence Level value and by using other information such as other business information, news... etc; and private information such as the relationship with client, history of payments, guarantees and the knowledge of the sector.
Probability of default and Confidence Level In addition to the MORE rating, modeFinance also estimates the probability of default and provides a level of confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go into default. As the probability of default is strongly affected by the economic climate the company is operating in, companies in the same MORE class will not necessarily have the same probability of default. The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level: P Available Inf ormation Conf idence = P T otal Inf ormation The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the MORE rating is able to take into account for each company. For companies with fully populated records a confidence level of 100% would be applied: companies where no financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 18
NOTES The present analysis was based on the company available financial statements as provided by Bureau Van Dijk Electronic Publishing - ORBIS database (lack of both Notes to financial statements and Report on operations).
DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such modeFinance can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.
Contacts Company Products Where Info web Phone
modeFinance MORE rating AREA Science Park 34149 Trieste, via Padriciano 99 - ITALY info@modefinance.com www.modefinance.com +39 040 3755337
modeFinance srl VAT number 01168840328 E-mail: info@modefinance.com Web: www.modefinance.com
Area Science Park, Padriciano 99 34149 Trieste, Italy Tel: +39 040 3755337 Fax: +39 040 3756741
Page | 19