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2.  Credit rating is a mechanism by which the
reliability and viability of a credit instrument
is brought out.
When a company borrows or when a
businessman raises loan, the lenders
are interested in knowing the credit worthiness
of the borrower not only in the present
condition but also in future

3.  Credit rating is resorted to :
 a) Companies
 b) Individuals
 c) Countries

4.  RATING OF INDIVIDUALS : Individuals go for
credit rating when they want to
 borrow from recognized institutions. In India, we
have Onida Individual Credit Rating
 Agency (ONICRA) which gives credit rating for
individuals.
 b) RATING OF COMPANIES: As per the guidelines
of SEBI and RBI, companies
 have to resort to credit rating when they :
 (i) accept public deposits
 (ii) issue credit instruments in domestic market
 (iii) issue credit instruments in overseas market.

5.  c) RATING OF COUNTRIES: Credit rating is
resorted to by countries for borrowing
 in international market or for attracting
foreign investments or for raising funds from
the
 international institutions like IMF and IBRD

6.  a. Business Analysis
 b. Evaluation of industrial risks
 c. Market position of the company within the industry
 d. Operating efficiency of the company
 e. Legal position in terms of prospectus
 f. Financial analysis based on accounting quality
 g. Statement of profits
 h. Earnings protection
 i. Cash flow and their adequacy
 j. Financial flexibility
 k. Track record of management
 l. Capacity to overcome adverse situations
 m. Goals philosophy and strategy
 n. Labour turnover
 o. Regulatory and competitive environment
 p. Asset quality
 q. Financial position-interest/tax sensitivity

8.  Credit rating companies were started in India
during the late 1980s. Credit Rating
 Information Services of India Ltd (CRISIL) was
started in 1988 as a subsidiary of ICICI.
 Information and Credit Rating Services Ltd.,
(ICRA)was started in 1990, which is a
 subsidiary of IDBI. In 993, Credit Analysis and
Research Ltd. (CARE) was started.

9.  1. Equity rating
 2. Bond rating
 3. Promissory note rating
 4. Commercial paper rating
 5. Sovereign rating