JCR calculated financial indicators by rating range (average values) using financial data of corporations, to which JCR assigns ratings (including 'p' ratings and ratings under Credit Monitor), as part of objective validation of the adequacy of JCR’s ratings. This report is the updated 2012 version of the last "Financial Indicators by Rating Range 2011" released on November 17, 2011. The ratings are determined both quantitatively and qualitatively, but consistency between the grades of rating ranges and financial indicators, which should exist as a base, has been reaffirmed by these statistics. JCR calculates financial levels and uses them to check individual ratings. Since JCR not only conducts evaluation and qualitative assessment for indicators other than those shown in this report, but also takes into consideration future prospects when actually determining ratings, the said ratings are not necessarily assigned to the corporations, which satisfy average values given in this report.
Time Period for Data Collection
Two time periods are adopted for data collection: "the most recent FY" (from April 2011 to March 2012) and "the most recent 5 fiscal years" (from April 2007 to March 2012). (The previous two time periods are from April 2010 to March 2011 for the most recent FY and are from April 2006 to March 2011 for the most recent 5 fiscal years.)
Data Used
Data for Japanese industrial corporations (excluding financial institutions, electric power and gas companies, air transport, agriculture and forestry, fishery, and mining industries) subject to JCR's ratings were used. However, as the number of corporations in B or below B range is small, data were collected for those in BB or above BB range. JCR related the financial indicators to the JCR's ratings that were assigned when 5 months have passed since the end of the fiscal year (for example, FY ended March 31, 2012 referenced to JCR's rating as of August 31, 2012), from which these financial indicators are calculated. As a result, the number of corporations subject to data collection from April 2007 to March 2012 totaled 1,042 for manufacturing industry (198 for the most recent FY only) and totaled 909 for non-manufacturing industry (168 for the most recent FY only).
Comments on Table 1
(1) As with the last report, consistency between the grades of rating ranges and financial indicators was seen in this verification.
(2) There were declines in the financial indicators for profitability for each rating range for manufacturing industry with respect to the most recent FY compared with the most recent FY last time.
(3) As for the debt service capacity, years to pay off a debt measured by EBITDA were longer for almost all rating ranges for manufacturing industry and years to pay off a debt measured by operating cash flows were longer for non-manufacturing industry, respectively, with respect to the most recent FY compared with the most recent FY last time.
(4) There were no noteworthy trends in the financial structure and size.
