Facts, views and indicators
Our methodology presentation pack overviews each of the Category Scorecards and explains the factors and the weightings that we use for each.
It is important to consider the ‘angle’ and the ‘status’ of the categories and factors, understanding that some are forward-looking ‘views’, some are backward-looking ‘facts’, while some may be seen as indicative (i.e. reflecting the market) – for example:
- ANGLE: angle references ‘direction’, for example: credit ratings are ‘forward-looking’ views; balance sheet fundamentals are historical ‘facts’ (as at the date of the last set of published report and accounts); and past volatility of CDS or share price are backward-looking indicators.
- STATUS: some of the categories and factor are factual, for example: balance sheet fundamentals are ‘facts’ taken from the financial reports and accounts; credit ratings are simply ‘views’ of credit rating agencies; whilst we would describe the CDS market as an ‘indicator’, being neither factual or view-based.
Our ‘Introduction and overview’ and ‘Methodology: scoring and weighting’ presentation packs draw attention to whether factors are forward or backward-looking facts, views or indicators, also highlighting some of the considerations that we bear in mind.