Vocabulary Preview
Match each word or phrase with the correct definition.
1.
assign
a.
a business manager
2.
criterion
b.
a
number
3.
executive
c.
the opinion people have about something; the good name
4.
figure
d.
a
standard of judgment
5.
financial
e.
to designate
6.
reputation
f.
related to managing of money
Pre-Reading Questions
Think about the following questions.
1.
What company is rated #1 in your country? How do you know?
2.
Who do you think rates companies?
3.
How do you think companies are rated?
Rating Companies
B u s i n e s s & E c o n o m i c s 2
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Rating Companies
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P
ublications such as
Business Week
and
Fortune
are two of the
several
publishers that produce
ratings of different American and international
companies. These ratings not only concentrate on public or private
companies, but many other kinds as well. Companies
are assigned two
main types of ratings. One of these can be summarized as the company’s actual
performance. The other type of rating pertains to the results of publishers’ surveys.
There are several reasons why publishing companies rate companies. One is
for the companies that are ranked to know where they stand in their industry.
Investors and lenders of the rated company also use
the ratings to decide the
risk associated with doing business with the company. Consumers also use
ratings to learn about the company’s reputation and to rate companies when
making investment decisions.
Companies’ actual financial performance is
one of the most important
indications
in ranking companies. There are two types of measurements for
companies’ performance. All companies involved in the ratings must publish
financial data and must report part or all of these
figures to a government
agency. Ratings are based on yearly reported
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