How is the total rating of the company calculated?
The company rating is calculated taking six major indices characterizing financial activity as a basis, which are chosen by Lursoft by means of consulting with financial experts.
These indices are:
- Solvency- characterizes the specific weight of the company equity capital in the total assets. The specific weight of this index in determination of rating is 30%.
- Profit before taxes - shows profit or loss of the company for the period before withholding of taxes. The specific weight in rating determination is 20%
- Liquidity - characterizes ability of the company to settle its short-term liabilities. The specific weight of this index in rating determination is 20%.
- Turnover increase - average increase for the last three years. If the company is younger, the last available years are considered. The specific weight in rating determination is 10%.
- Return on equity - net profit divided by the equity capital. The specific weight in rating determination is 10%.
- Liabilities - creditor turnover for the last accounting year. The specific weight in rating determination is 10%.
According to each index (solvency, liquidity, etc.), the companies are ranked from the largest to the smallest. They are each assigned a rating point from 0 to 100. The company ranked first gets 100 rating points, the middle rank gets 50 rating points, while the last gets 0 points. Other companies get the points proportionally in accordance with their rank.
The rating of the company is prepared both in the industry and among all companies registered in Latvia that have submitted an annual report to the Register of Enterprises of the Republic of Latvia.
Assessment of the Company