Ratings financial ratios, selection

Financial ratios are condensed data reporting quantifiable facts. With their help, complicated facts, structures, and procedures of corporations are depicted in a simple way to permit a fast and comprehensive overview. Thus, financial ratios are appropriate for the complex task of comparative credit quality assessment. To simplify the methodology, the number of financial ratios used should not be too large, and every financial ratio must be economically plausible. The selection of particularly appropriate financial ratios is a significant component of every rating methodology. These financial ratios should represent areas of relevance for creditors as exactly as possible, like debt/equity ratio, profitability, and liquidity. In this context, not only the level of these financial ratios is important but also their development over time. 

On the basis of the selected appropriate financial ratios that show significantly different group means for industrial corporations of good and poor credit quality and are additionally fundamentally clear indicators, a quantitative rating model is developed with the help of discriminant analysis. 

The high hit ratios of the rating functions (96% for the industrial model) suggests that each of the selected four financial ratios (of the... 

Reaction Stoichiometry and Order of Addition. Reaction rates, product yields, and by-product formation can often be effectively managed by the selection of the appropriate ratios of reactants and raw materials as well as by the rate and order of addition of these materials. A fundamental mechanistic understanding of the process is essential for the effective evaluation of these parameters. Reaction kinetic information can be beneficial in defining the limiting reagent for the reaction under evaluation. More often, the financial impact of specific raw materials will be a key driver of the overall process economics and, as... 

The economic evaluation studies are based on normative criteria, independent of subjective opinions, which indicate preferences in any course of action. Every alternative is independent of the other ones and the measure of the economic preferences is made separately. Renkema and Berghout [10] distinguish four basic approaches to evaluate investment alternatives the financial approach, the multicriteria approach, the ratio approach, and the portfolio approach. Methods from the financial approach are usually recommended for the evaluation and selection of investment alternatives. Often used financial approach methods are the payback period (PP) method, the internal rate of return (IRR) method, and the NPV method. The latter is used to evaluate this project. 

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