Bond rating agencies include the analysis of financial ratios in arriving at corporate bond ratings.

Question

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Bond rating agencies typically use financial ratios as one of the factors in their evaluation of a company's creditworthiness, alongside other factors such as industry trends, management quality, and overall financial stability. Some common financial ratios used include liquidity ratios, profitability ratios, and leverage ratios.

Bond Rating Agencies Include the Analysis of Financial Ratios in Arriving