The Determinants Of Credit Ratings: U.S. Capital Goods Firms

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TEH, CHUCK OOI (2020) The Determinants Of Credit Ratings: U.S. Capital Goods Firms. [Dissertation (University of Nottingham only)]

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Abstract

Purpose – The objective of this paper is to elucidate the research question of which factors are important in determining the credit ratings of U.S. firms in the Capital Goods industry. Specifically, this study examines the financial risk and business risk variables that could influence a firm’s credit rating.

Methodology – Research data primarily issuer credit ratings and financial information were obtained through S&P Global Market Intelligence and S&P Capital IQ database. A sample of fifty (50) capital goods firms which are rated by S&P Global Ratings across the period from 1988 to 2020 is used. The paper applies univariate and correlation analyses for this study.

Findings – It is evident that financial risk variables such as interest coverage and profitability have the most significant effects on credit ratings, followed by cash flow/ leverage and capital structure. Firm size also plays a significant importance on credit ratings. The study further confirms the hypotheses postulated in previous literatures about the relationship significance of these independent variables on credit ratings. It can be concluded that financial-related variables especially profitability are able to discriminate between credit ratings of the Capital Goods firms.

Item Type: Dissertation (University of Nottingham only)
Depositing User: TEH, CHUCK
Date Deposited: 19 Apr 2023 11:26
Last Modified: 19 Apr 2023 11:26
URI: https://eprints.nottingham.ac.uk/id/eprint/63103

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