FAQ'S

iFinRanks does not talk to the Management of the companies it assigns a score. No management spin is entertained. iFinRanks never ever visits the companies it scores. It is purely a third party independent assessment. Why do we need to waste time with the companies if the Chartered Accountants have already signed off on the financials?  It is ludicrous to revisit what has been already vetted, verified and signed by Chartered Accountants appointed at the AGM by the shareholders.

iFinRanks is totally different in its approach and methodology. iFinRanks respects all its competitors including rating agencies. We are enablers not competitors to Credit Rating Agencies. Our contention is that we never consult the companies we score. We are totally independent as we rate second parties for third parties. Accordingly, we are free to call a spade a spade!  We do not tweak a company’s financial health just to keep the markets happy or to sustain a bull or a bear run. We neither care nor bother what the stock markets are doing!

Every time a company releases new set of Financials; iFinRanks analyses the financials in depth. Powered by one of the most dynamic and cutting edge software platform – The 3DFAT.CAT@APP.Global iFinRanks assigns scores called 10-Inc Scores which is both a Top to Bottom and Bottoms-Up micro analysis, scientifically proved to be delivering accurate and superior results.

Every business be it listed, unlisted, small, big, medium or an MNC or a small corner shop, iFinRanks analyses the business on the following 10 parameters.

1. CASH FLOW MANAGEMENT
2. STRATEGIC SALES MANAGEMENT
3. STRATEGIC COST MANAGEMENT
4. GROSS PROFIT PERFORMANCE
5. OPERATING PROFIT PERFORMANCE
6. NET PROFIT PERFORMANCE
7. COMPREHENSIVE PROFITABILITY
8. BALANCE SHEET OPTIMIZATION
9. DEBT & INTEREST MANAGEMENT
10. WORKING CAPITAL MANAGEMENT

Each of the above parameter is given a score from 0 to 100 based on the financial observations which are scientifically benchmarked based on the Business Model adopted by the company and the closest commercial activity from which the major revenue is earned.

• A score of 60 and above is an Investment Grade Company and is slotted in the Gold Standard
• A score of more than 40 but less than 60 is slotted in the Silver Standard
• A score of more than 20 but less than 40 is slotted in the Bronze Standard
• A score of less than 20 is considered below junk bond status and slotted in the poor investment grade

iFinRanks Strategic Financial Report provides an all encompassing and futuristic assessment of an entity’s business buoyancy and efficiency in the long-term. Seldom do companies have all the 10 parameters of the 10 Inc Score above investment grade. Our database clearly isolates companies with a 10 Inc score of less than 39 out of 100 scoring points as firms on the negative watch list. 

In-house extensive research has proved that all firms below 30 need not be a sure case of default. In fact, companies with above investment grade scores of 60 tend to have below investment grade scores for Balance Sheet Optimization and Working Capital Management.  This is because companies are either leveraging more than their needs or intentionally limiting their working capital flows. However, the industry in which the business operates is the key fulcrum.

Companies with a 10 Inc score of 39 and below have to overhaul their overall balance sheet or improve comprehensive profitability scores. They also need to make other financial changes so as to bounce back to investment grade status and to ward off possible deterioration in their financial status.

The Strategic Credit Alert Report is circulated to subscribers when a company’s 10 Inc Score is below 39 out of 100.  The Strategic Credit Alert Report (SCAR) gives a true and fair view of whether the Creditors and Investors need to take a serious look at their investments in the companies for which a SCAR has been identified. SCAR reports are not scare reports. They are FINANCIAL Early Warning Signals on the ability of a company to service the debts it has taken or repay the principle and meet the debt covenants attached to the debt. Every business encounters financial stress but identifying the same before it gets worse is what iFinRanks and its methodologies are well known for.

Chances of Bankruptcy is an estimated probability that an event of Distress or Default may occur between 12 to 36 months. iFinRanks’ Research Unit has undertaken extensive research to identify the financial distress or default or possible bankruptcy. This probability or estimate is denoted as a percentage and called CoBWeBB percentage. (COB = Chance of Bankruptcy and WEBB = With Extended Business Buoyancy)

iFinRanks R&D namely iFinRed Solutions may keep records of worldwide financial distress situations occurring amidst the universe of companies for which it calculates 10-Inc Scores®.

The derivation of a company’s COBWEBB incorporates:

• The company’s 10 Inc Score® (a measure of the extent to which it resembles previously distressed companies),
• The overall rate of financial distress and default across the full universe of companies,
• The historical rate of distress at each point on the 10- Inc Score® scale.
• Macro – economic indicators like rise in Inflation and other economic indices which could impair profitability.

A Financially Challenging situation is possible in any business. Such situations could easily spiral into a serious financial distress and lead to business failure, restructuring or other events indicative of an acute financial distress. In the United States such financially distressed situations are denoted as Chapter 11.

The Management and Stewards in charge of the business need a solution when their business ships hit a rock and instead of sinking, US type of Chapter 11 business turnaround is the best option for the entire gamut of stakeholders.

Chapter 11 is a form of corporate bankruptcy in the United States that enables a company to reorganise a faltering business.

Following in the US footsteps, India and Singapore among others have already started dialogue among the captains of business and industry. Please read the Media section on how UK, India and Singapore are progressing on this extremely crucial step necessary for the growth, success and sustainability of business in the new age.

The Stewards in charge of any business need ADVACED FINANCIAL WARNING SIGNALS. The Suppliers and Creditors too are keen to know if their investments are indeed safe. EARLY WARNING SIGNS enable iFinRanks’ subscribers  to get a good grasp of the financial risk before it transpires.

iFinRanks research team has been at it for decades. We use the Cash Flow Statement judiciously to link the figures given therein to map and match the figures of the Balance Sheet and Financial Performance. As the Statements pertaining to the Cash Flow are issued by the Bankers, there is an institution besides the company per se. Moreover, the cardinal scoring system deployed by iFinRanks is too good to be tricked by any kind of manipulation. Satyam Infotech which had fudged the Cash Flows itself in cohorts with its bankers was caught out by iFinRanks because its Operating Performance Scores and Net Profit Performance Scores were only 20 and 7 out of 100 respectively, but the Scores for Cash Flow Management was 88 out of 100. How could a company which has scores of less than 7 in its core financial parameter of Profitability score over 88 in Cash flow? This was one of the many glaring instances of financial manipulation caught by iFinRanks’ intrepid system and futuristic algorithmic predictive platform – 3D.FAT.CAT@APP.Global

As mentioned in our earlier answer we are specialists in forensic examination and reporting. For a detailed write-up on the tricks to smooth the rough financial edges off year to year profit fluctuations please refer to our website’s Media icon.