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Modeling The Rating Of Energy Companies

Author

Listed:
  • ANDONE Diana

    (BabeÈ™-Bolyai University Cluj-Napoca)

  • FATACEAN Gheorghe

    (BabeÈ™-Bolyai University Cluj-Napoca)

  • MINTEUAN Paul

    (BabeÈ™-Bolyai University Cluj-Napoca)

Abstract

The methods of bankruptcy risk measure the past performance of the economic entity, informing the managers in a small proportion on its future. Financial results can rapidly degrade over time because of the economic environment. As a reaction to these practical requirements, the diagnosis of the default risk was developed with statistic methods based on the financial ratios. The aggregate rating model which we built is based on credit - scoring methods, banking methods and an own model based on financial ratios. Then we tested the aggregate model on the energy companies CNTEE TRANSELECTRICA SA and ENEL SpA based on multiple financial criteria, we found that our model is similar with Moody's, Standard & Poor's and Fitch models.

Suggested Citation

  • ANDONE Diana & FATACEAN Gheorghe & MINTEUAN Paul, 2017. "Modeling The Rating Of Energy Companies," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 69(3), pages 8-18, August.
    • Handle: RePEc:blg:reveco:v:69:y:2017:i:3:p:8-18
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    References listed on IDEAS

    as
    1. Ioan BÃTRÂNCEA & Lucian GÃBAN & Liviu BECHIª, 2016. "Romanian County Rating Measurement. A Comparative Analysis," The USV Annals of Economics and Public Administration, Stefan cel Mare University of Suceava, Romania, Faculty of Economics and Public Administration, vol. 16(1(23)), pages 165-172, June.
    2. Amato, Jeffery D. & Furfine, Craig H., 2004. "Are credit ratings procyclical?," Journal of Banking & Finance, Elsevier, vol. 28(11), pages 2641-2677, November.
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    More about this item

    Keywords

    Rating; Scoring; Liquidity; Bankruptcy;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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