For this assignment, you may select any company listed on the Singapore Exchange.
In this assignment, you are the Principal Analyst responsible for estimating the credit rating of your company. This internal credit rating exercise is conducted annually.
You have completed a Credit Rating Quantification of the business strategy risks, financial policy risks, execution risks and risks mitigation factors based on the latest available information of your company.
(a) Construct a Credit Rating Quantification in Microsoft-Excel format to appraise each of the 18 Risk Assessment Factors, as follows:
- Business Strategy Risks and Risk Assessment Factors
(i) Industry Risks
(ii) Market Structure / Competition
(iii) Segment Diversification
(iv) Product Diversification
(v) Geographical Diversification
(vi) Customers Base
(vii) Brand Recognition
- Financial Policy Risks and Risk Assessment Factors
(iv) Access to Capital
(v) Assets Encumbrance
(vi) Capital Efficiency
- Execution Risks and Risk Assessment Factors
(i) Management’s Competence
(ii) Management’s Integrity
(iii) Management’s Risk Appetite
- Risks Mitigation Factors
(i) Parental support
(ii) Government support
To do well for this part, you are expected to submit screenshots of supporting justifications for ALL the weight allocations e.g., relevant extracts of financial statements, academic publication, industry research or analysts’ reports.
Estimate the credit rating of your company.
(b) When you informed your Chief Executive Officer (CEO) of the estimated credit rating, he/she Strutted you to make recommendations to target a higher credit rating in order to improve access to funding and reduce funding costs.
Your Written Report to the CEO should include the following:
(i) ONE (1) recommendation to improve Business Strategy Risks.
(ii) ONE (I) recommendation to improve Financial Policy Risks.
(iii) ONE (I) recommendation to improve Execution Risks.
(iv) ONE (I) recommendation to improve Risks Mitigation.
(v) Justifications on why the higher credit rating is achievable after implementing your four recommendations above.