Introduction to Personal Investing
What tools may investors use to evaluate risks of default?
If a company is having serious financial difficulties, this usually is reported to a third-party company, that in turn measures the health of many companies, especially their ability to repay obligations. Many companies, such as Standard & Poor’s, Moody’s, Dun & Bradstreet, and Fitch Ratings track how well companies are meeting their obligations. Companies with little debt and lots of cash, and that always pay off debts and obligations, are relatively safer investments than those that cannot.