In many instances, it is helpful to understand one company's Financial Health rating in comparison to the Financial Health Ratings of its peers. For example:
- In a competitive bidding process, there’s a need to compare a specific company against a group of the other bidders
- New investments are frequently evaluated against a list of current investments – by size, country, location or portfolio allocation
- As a credit analyst, you want to compare a prospective counterparty against a list of companies with similar limits, or in the same industry or location
- In supply chain and vendor management, new or replacement supplier or partners should be compared against the current ones they are to replace
This is another time intensive process, and for many of the situations laid out above, time is of the essence. RapidRatings allows you to utilize portfolios and a custom peer benchmark report to get you the different perspective that you need within a matter of minutes.
The Custom Peer Benchmark Report has an identical layout to the Peer Benchmark report that many of you use.
The Peer Benchmark compares a company to a pre-set sector of global public companies while the Custom Peer Benchmark lets you determine that peer set
The report allows for useful comparisons in some key areas / functions: The orange column to the right of the report will give you the average metrics for that group of companies – the ongoing supplier list, the counterparties in the same industry, the other bidders in the process – to benchmark the company of interest against.
- FHR: the FHR is broken down into category performance scores. You’re able to evaluate the relative strengths and weaknesses of your new / prospective supplier, partner or investment against the sample set of choice
- Financial indicators: liability structure, liquidity, interest cover – to substantiate credit extension amounts or investment allocations
You’re going to spend time picking the strategic peer group, and then you’re going to spend time making and enacting the decisions surrounding the analysis. You shouldn’t spend time collating and summarizing the data and metrics you need – we can help with that!
The Custom Peer Benchmark report is accessed through Report Builder. In this case, you need to construct the peer group by building portfolios