Why Are Credit Rating Agencies Important?

The rating the company’s financial statues, or the ability to pay the debt is the company is a concept came from the west.

And now rating agencies are an integral part of India, because they warn the investors making an investment in the company that does not have the ability to pay the money back.

However the credit rating agencies measure the company’s present statues in terms of rating. In simple words, is the company sound enough to pay back the money of share holders?

The rating agencies analyze the company’s liabilities and insights. They rate the insurance companies, financial companies, banks, and other top corporate companies.

Indeed the rating agencies in India rate the big corporate companies, which are listed on share market. These agencies bridge the gap between the companies and investors.

They rate the companies after analyzing the every aspect such as checking the financial statues; review the top management performance etc so that investors don’t invest in wrong company.

In addition the Rating Agencies in India make the comprehensive assessment so that investor’s money could be saved. Generally market expert believe in them because they make assessment as third party.

They do comprehensive research and keep watch on the each policy companies make, because each policy makes an impact it could be either positive or negative.

There are companies that borrow money from venture capitalists, angel funders, and banks. And many organizations make the documents so that they could get loans. But these agencies keep everything in front of the investors.

It is beneficial for both those who fund the company and investors, who make the company, for instance if they rate any company with low grade, then bank and capitalist, who were supposed to fund, will take their hands back.

They offer the independent assessment and analysis of the company. And then exhorts about the risks associated in investing in the country. In the era of Globalization domestic as well as NRI investment depends on the grade of the company.

If the grade is high, it means company is good for investment, and low grade leads to low investment. So it shows the light to investors where to invest.

The aim of these companies is to provide the best assessment with transparency and value. And for delivering the best results, they would employ the best statistics, economics and finance background students who extrospect every aspect of the company.

Moreover they play a vital role in getting the investment of abroad. The foreign investors invest only, when they find the rating about the company in which they are supposed to invest is good.

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