Leasing company credibility assessment methods

Expert RA methodology scheme to assign credibility ratings to leasing companies includes analysis of four elements: main activity and market status; ability to pay and financial relations; risk-management and fulfillment of obligations; corporate management and business potential.

Main activity and market status section assesses:

• Structure of leasing portfolio – balancing and diversification (regional, client, by types of equipment and property);
• Business dynamics and market status;
• Dealing with suppliers, typical contracts and deviations from standard; diversification by suppliers, long-term relations;
• Company specialty and operating segment parameters.

Financial parameters section assesses:

• Financing of activity;
• Managing debts, balance structure;
• Autonomy ratio;
• Liquidity of current deals;
• Balancing of financial flows and indicators (including asset turnover, structure and dynamics of debts etc.);
• cash flow analysis;
• Activity efficiency (ROE, ROA).

Risk-management and fulfillment of obligations section assesses:

• Company risk-management situation;
• Share of defaults or overdue payments by different types of equipment;
• Re-marketing share;
• Insurance protection;
• Securing and guaranteeing deals;
• Credit history;
• Legal actions and claims; quality of deal legal support.

Corporate management, business potential section assesses:

• Corporate management;
• Owners and affiliated structures;
• Transparency;
• Strategy;
• IAS audit and reporting;
• IT, automation level;
• Relations with state bodies;
• Financial and strategic planning.