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OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAAnot
available
non return extremlypathological
pathological highdanger
weak sufficient adequate good very
strongextremely
strong
Company name OTELCO, INC.
Identification number Not available
Country United States of America
ZIP code and city 35121 - ONEONTA
Address 505, THIRD AVENUE EAST
+1 205 625 3591
www.otelcoinc.com
Legal form Not available
Account Consolidated
Incorporation date 1998
NACE 2 Sector 6190 - Other telecommunications activities
Listed
Status Active
MORE Credit limit 680,000 e
31/12/2011 31/12/2010 31/12/2009
Turnover (th e) 78,711 78,091 72,022
Rating CCC CCC CCC
Probability of default 16.00% 16.00% 16.00%
Confidence Level 100% 100% 100%
Solvency ratios
Leverage ratio -26.69 -62.62 95.86
Total asset/Total liabilities 0.96 0.98 1.01
Liquidity ratios
Current Ratio 2.94 3.04 2.81
Quick Ratio 2.75 2.87 2.64
Profitability and economic equili-
brium ratios
Return on investement ROI (%) 8.57 8.06 6.20
Return on equity ROE (%) -17.76 -13.18 -89.46
Asset turnover 0.32 0.32 0.31
Interest paid weight 0.91 0.95 1.21
Gross Profit/Operating revenue 0.57 0.60 0.60
Interest Coverage ratios
EBIT interest coverage ratio 0.99 1.07 0.86
Analysis and trend of financial
strength
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Sector Analysis
Company Healthy Balanced Vulnerable Risky
Solvency ratios
Leverage ratio -26.69 0.44 2.04 2.63 -2.24
Total asset/Total liabilities 0.96 3.17 1.49 1.13 0.68
Liquidity ratios
Current Ratio 2.94 2.28 1.20 1.00 0.52
Quick Ratio 2.75 2.09 1.10 0.92 0.50
Profitability and economic equilibrium ratios
Return on investement ROI (%) 8.57 18.39 7.41 0.30 -15.07
Return on equity ROE (%) -17.76 20.04 13.87 -13.84 -49.59
Asset turnover 0.32 1.38 1.29 1.34 1.28
Interest paid weight 0.91 0.01 0.09 0.00 -0.06
Gross Profit/Operating revenue 0.57 0.43 0.35 0.32 0.26
Interest Coverage ratios
EBIT interest coverage ratio 0.99 146.00 9.27 0.19 -6.69
Cash Conversion Cycle (days)
Days Sales Of Inventory (DIO) 6 8 10 12 9
Days Sales Outstanding (DSO) 23 47 50 53 43
Days Payable Outstanding (DPO) 5 23 34 40 40
Cash Conversion Cycle (DIO + DSO - DPO) 24 31 24 14 1
Numer of analyzed companies - 429 779 409 164
(Average) Rating CCC A BBB B CC
The sector has been chosen according to:
international companies in the sector NACE 2 6190 with financial data of year 2011.
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Sector Analysis - Graphs
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Balance Sheet
BALANCE SHEET (th e) 31/12/2011 31/12/2010 31/12/2009
Accounting practice Local GAAP Local GAAP Local GAAP
Exchange rate USD - EUR 0.7729 0.748 0.6942
Number of months 12 12 12
Total assets 245,556 241,736 234,297
Fixed assets 223,747 217,171 211,755
Intangible fixed assets 161,914 160,165 154,386
Tangible fixed assets 50,917 47,788 47,917
Other fixed assets 10,916 9,218 9,452
Current assets 21,808 24,566 22,542
Stocks 1,376 1,359 1,367
Debtors 5,054 4,913 4,926
Other current assets 15,378 18,294 16,249
Cash & cash equivalent 9,579 13,633 12,308
Shareholders funds -9,559 -3,923 2,419
Capital 102 99 92
Other shareholders funds -9,661 -4,021 2,327
Total liabilities 255,114 245,659 231,878
Non current liabilities 247,685 237,569 223,864
Long term debt 209,527 203,154 190,002
Other non-current liabilities 38,158 34,415 33,862
Current liabilities 7,429 8,090 8,014
Loans - 0 0
Creditors 1,152 575 2,184
Other current liabilities 6,277 7,516 5,830
Total shareh. funds & liab. 245,556 241,736 234,297
NET DEBT (th e) 31/12/2011 31/12/2010 31/12/2009
Short term debts - 0 0
Long term debt 209,527 203,154 190,002
Cash & cash equivalent 9,579 13,633 12,308
Net debt - 189,520 177,694
31/12/2011 31/12/2010 31/12/2009
Working capital 5,278 5,697 4,109
Net Current Assets 14,379 16,475 14,528
31/12/2011 31/12/2010 31/12/2009
Days Sales Of Inventory (DIO) 6 6 7
Days Sales Outstanding (DSO) 23 23 25
Days Payable Outstanding (DPO) 5 3 11
Cash Conversion Cycle (DIO + DSO - DPO) 24 26 21
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Income Statement
INCOME STATEMENT (th e) 31/12/2011 31/12/2010 31/12/2009
Accounting practice Local GAAP Local GAAP Local GAAP
Exchange rate USD - EUR 0.7729 0.748 0.6942
Number of months 12 12 12
Sales 78,711 78,091 72,022
Revenues growth (%) 1 8 -
Other revenues +/- variation in inventories and contract in progress + Fixed assets
own construction capitalized0 0 0
Operating revenue / turnover 78,711 78,091 72,022
Total operating costs 59,675 58,368 56,802
Costs growth (%) 2 3 -
Service costs - - -
Material costs - - -
Costs of employees - - -
EBITDA 34,667 37,424 33,576
Depreciation 15,632 17,701 18,356
EBIT 19,036 19,724 15,221
Financial P/L -17,144 -18,751 -18,334
Financial revenue - - -
Financial expenses 17,144 18,751 18,334
Interest paid 19,148 18,510 17,643
P/L before tax 1,891 973 -3,113
Extr. and other P/L - - -
Extr. and other revenue - - -
Extr. and other expenses - - -
P/L before tax + Extr. and other P/L - - -
Taxation 193 456 -949
P/L for period 1,698 517 -2,164
31/12/2011 31/12/2010 31/12/2009
Costs of Good Sold 34,008 30,887 28,614
Gross Profit 44,703 47,204 43,409
Other Operating Expenses 25,667 27,480 28,188
31/12/2011 31/12/2010 31/12/2009
Cash flow 17,330 18,217 16,191
Added value - - -
31/12/2011 31/12/2010 31/12/2009
Number of employees 330 315 299
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Evolutions and trends
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Qualitative information
Full overview The company is a full service communications provider that offers a wide range of wireline telephone services
to residents and businesses in North Central Alabama, Central Missouri and majority of Maine. The company
was founded in 1998 for the purpose of acquiring and operating rural local exchange carriers. Its corporate
headquarters is located in Oneonta, Alabama in the United States. The company provides wireline telephone
services such as telephone with caller identification, call waiting, call forwarding, and voicemail services, digital
cable television, high - speed Internet, and long distance service. It also provides network access to other wireline,
long distance and wireless carriers for calls originated or terminated on the company’s network. In addition, the
company publishes local telephone directories in rural local exchange carrier territories and offers other telephone
related services that include leasing, selling, installing, and maintaining customer premise telecommunications
equipment. The company offers ease and convenience of one bill system, local customer service, competitive
rates, convenient automatic bank draft, and credit card payment. It serves portions of a five county area in Alabama
including Blount, Etowah, Marshall, Cullman and Morgan counties, a five county area in Missouri including Cooper,
Moniteau, Morgan, Pettis, and Saline counties, and a significant portion of the state of Maine. The company has
local customer sales and service offices located in Alabama at Oneonta, Walnut Grove, Arab and Blountsville, in
Missouri at Pilot Grove and Sedalia, and for the state of Maine at Bangor and Portland.
History Not available.
Primary business line Full service communications provider that offers a wide range of wireline telephone services to residents and
businesses in North Central Alabama, Central Missouri and majority of Maine.
Secondary business line Not available.
Main activity Services.
Secondary activity Not available.
Main products and services Wide range of wireline telephone services.
Size estimate Not available.
Strategy, organization and policy Not available.
Strategic alliances Not available.
Membership of a network Not available.
Main brand names Not available.
Main domestic country United States of America.
Main foreign countries or regions Not available.
Main production sites Not available.
Main distribution sites Not available.
Main sales representation sites Not available.
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Main customers Not available.
Auditor/Advisor/Bank
name type address
BDO USA, LLP Auditor -
Wells Fargo Shareowner Services Transfer Agent -
Board
name date of birth nationality function
Mr. Michael D Weaver - United States CHAIRMAN OF THE BOARD, PRESIDENT, CHIEF EXECUTIVE Officer
Mr. William Bak - - Independent Director
Mr. Robert E Guth - - Independent Director
Mr. Howard J Haug - - Independent Director
Mr. Stephen P Mccall - - Independent Director
Mr. Andrew Meyers - - Independent Director
Mr. William F Reddersen - - Independent Director
Sharehoders (the first twenty shareholders ordered by Direct %)
CI FINANCIAL CORP via its funds Rating:
Country ISO code CA Operating Revenue (MIL $) 1472.05
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % - Number of Employees 1280
Total % 11.04 Information date 2012/09
Address : Not available
MAX % HELD BY NOT LISTED SHAREHOLDERS Rating:
Country ISO code - Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % 10.00 Number of Employees -
Total % - Information date 2012/03
Address : Not available
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
SOCHET IRA Rating:
Country ISO code - Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % - Number of Employees -
Total % 6.73 Information date 2012/06
Address : Not available
HUBER CAPITAL MANAGEMENT, LLC via its funds Rating:
Country ISO code US Operating Revenue (MIL $) 0.41
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % - Number of Employees 4
Total % 1.58 Information date 2012/07
Address : Not available
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY (THE) via its funds Rating:
Country ISO code US Operating Revenue (MIL $) 15457
NACE Rev. 2, Core code - Total Assets (MIL $) 189645
Direct % - Number of Employees 0
Total % 0.98 Information date 2012/06
Address : Not available
RAYMOND JAMES FINANCIAL INC via its funds Rating:
Country ISO code US Operating Revenue (MIL $) 4149.5
NACE Rev. 2, Core code - Total Assets (MIL $) 22275.97
Direct % - Number of Employees 9596
Total % 0.81 Information date 2012/06
Address : Not available
BRIDGEWAY CAPITAL MANAGEMENT INC via its funds Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % - Number of Employees 0
Total % 0.30 Information date 2012/06
Address : Not available
RENAISSANCE TECHNOLOGIES LLC via its funds Rating:
Country ISO code US Operating Revenue (MIL $) 1245.2
NACE Rev. 2, Core code - Total Assets (MIL $) 947.51
Direct % - Number of Employees 42
Total % 0.21 Information date 2012/06
Address : Not available
DEUTSCHE BANK AG via its funds Rating:
Country ISO code DE Operating Revenue (MIL $) 43152.86
NACE Rev. 2, Core code - Total Assets (MIL $) 2800132.9
Direct % - Number of Employees 100996
Total % 0.12 Information date 2012/06
Address : Not available
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
WELLS FARGO & COMPANY via its funds Rating:
Country ISO code US Operating Revenue (MIL $) 84601
NACE Rev. 2, Core code - Total Assets (MIL $) 1422968
Direct % - Number of Employees 269200
Total % 0.11 Information date 2012/06
Address : Not available
Subsidiaries (the first twenty subsidiaries ordered by Direct %)
BLOUNTSVILLE TELEPHONE LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
BRINDLEE MOUNTAIN TELEPHONE LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
COMMUNICATIONS DESIGN ACQUISITION LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
CRC COMMUNICATIONS LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
CRC COMMUNICATIONS LLC Rating:
Country ISO code US Operating Revenue (MIL $) 10.7
NACE Rev. 2, Core code - Total Assets (MIL $) 6.59
Direct % MO Number of Employees -
Total % - Information date 2012/12
GRANBY TELEPHONE LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
HOPPER TELECOMMUNICATIONS LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
I - LAND INTERNET SERVICES LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
MID - MAINE COMMUNICATIONS, INC. Rating:
Country ISO code US Operating Revenue (MIL $) 13.4
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees 100
Total % - Information date 2012/12
MID - MAINE TELECOM LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
MID - MAINE TELPLUS LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
OTELCO MID - MISSOURI LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
OTELCO TELECOMMUNICATIONS LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
OTELCO TELEPHONE LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
OTT COMMUNICATIONS Rating:
Country ISO code US Operating Revenue (MIL $) 0.56
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees 4
Total % - Information date 2013/01
OTT COMMUNICATIONS Rating:
Country ISO code US Operating Revenue (MIL $) 0.1
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees 2
Total % - Information date 2012/12
PINE TREE TELEPHONE AND TELEGRAPH COMPANY, THE Rating:
Country ISO code US Operating Revenue (MIL $) 4.86
NACE Rev. 2, Core code - Total Assets (MIL $) 6.03
Direct % MO Number of Employees -
Total % - Information date 2013/01
PINE TREE TELEPHONE LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
SACO RIVER TELEPHONE LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
SHOREHAM TELEPHONE LLC Rating:
Country ISO code US Operating Revenue (MIL $) -
NACE Rev. 2, Core code - Total Assets (MIL $) -
Direct % MO Number of Employees -
Total % - Information date 2011/12
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
ASKMORE rating guide
General vision A credit rating is an opinion of the general creditworthiness of an obligor (issuer rating), or the creditworthiness of
an obligor in respect of a specific debt security, or other financial obligation (issue rating), based on relevant risk
factors.
The Multi Objective Rating Evaluation (MORE) model is essentially used to assess the level of distress of industrial
companies by using data included in financial statements.
The basic idea of the model is to analyze a set of financial and economic ratios in a predictive corporate bankruptcy
model with the purpose of creating a fundamental credit rating model for each industrial sector. Results of the
model are obtained by applying newly developed numerical methodologies, drawing together financial theory,
data mining and engineering design methodologies. The heart of MORE is a multi dimensional and multi objective
algorithm that produces a classification of each company, by taking into account any attributes (such as sector and
country) characterizing a firm.
The model gives the opportunity to assign a rating to a company even without considering a complete data analysis
and allows to process quality information. It induces a better understanding of a company’s strength and weakness
thanks to sophisticated data mining tools and taking into account the analyst knowledge.
The MORE rating vision is to look at the fundamental economics of the company. The main idea is to evaluate the
rating observing every aspect of the economical and financial behavior of the company: better is the equilibrium
between the different aspects, better will be the final rating.
This is done studying, evaluating and aggregating the most important sections of the financial and economic
behavior of a company such as: profitability, liquidity, solvency, interest coverage and efficiency.
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Rating scale
Rating class Rating macro class Assessment
AAA
Healthy
The company’s capacity to meet its financial commitments is extremely strong. The company shows an excellent
economic and financial flow and fund equilibrium.
AAThe company has very strong creditworthiness. It also has a good capital structure and economic and financial
equilibrium. Difference from AAA is slight.
AThe company has a high solvency. The company is however more susceptible to the adverse effects of changes in
circumstances and economic conditions than companies in higher rated categories.
BBB
Balanced
Capital structure and economic equilibrium are considered adequate. The company’s capacity to meet its financial
commitments could be affected by serious unfavourable events.
BBA company rated BB is more vulnerable than companies rated BBB. Furthermore the company faces major ongoing
uncertainties or exposure to adverse business, financial, or economic conditions.
B
Vulnerable
The company presents vulnerable signals with regards to its fundamentals. Adverse business, financial, or economic
conditions will be likely to impair the company’s capacity or willingness to meet its financial commitments.
CCC
A company rated CCC has a dangerous disequilibrium on the capital structure and on its economic and financial
fundamentals. Adverse market events and an inadequate management could affect with high probability the
company’s solvency.
CC
Risky
The company shows signals of high vulnerability. In the event of adverse market and economic conditions, the
company’s strong disequilibrium could increase.
CThe company shows considerable pathological situations. The company’s capacity to meet its financial
commitments is very low.
D The company has not any longer the capacity to meet its financial commitments.
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Fundamental Credit Rating Ratios
Analysis area Ratio Assessment
Solvency ratios
Leverage ratioThis measures the level of total liabilities of the company in comparison
with equity.
Assets to debtThis indicates company’s solvency. The company shows a level of deficit
when the value of this ratio is under one unit.
Financial ratios Fixed Assets coverage ratioThis is calculated only for holdings. It measures the capital structure i.e.
whether a company covers the fixed assets with long term capital.
Liquidity ratios
Current ratioThis measures whether a company has sufficient short-term assets to cover
its short-term liabilities.
Quick ratioThis compares current liabilities only to those assets that can be readily
turned into cash.
Profitability and economic ratios
Return on Investement(ROI)This measures the profitability of company investments without regard to
the way the investment is financed.
Return on Equity(ROE) This measures the profitability of the equity.
Asset turnover
This indicates the investments turnover with regards to sales. The level
assumed from the ratio depends on the sector in which the company
operates.
Profit margin This indicates the profitability of sales.
Interest coverage ratio Interest Paid coverage
This indicate the ability of the company to cover interest expenses through
the economic margins (Gross profit and EBIT) and through the cash flow
from operating activities.
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
MORE Credit Limit, Probability of default and Confidence Level
MORE Credit Limit MORE Credit limit is the estimation of the amount of maximum credit that is possible to assign on a commercial
relationship with the analyzed company with an outlook of one year.
modeFinance used the following values associated with the company analyzed while computing the credit limit:
• Size;
• Years in Business;
• Average number of suppliers;
• Liquidity of the company and the comparison with its sector;
• The funds dedicated to be paid to suppliers;
• The likelihood that a company may pay its debts in the next 12 months (MORE Ratings).
The credit limit in this report is merely a suggested value of commercial credit limit calculated on the basis of annual
public data. This value should be reviewed by paying attention to the Confidence Level value and by using other
information such as other business information, news... etc; and private information such as the relationship with
client, history of payments, guarantees and the knowledge of the sector.
Probability of default e Confidence
Level
In addition to the MORE Rating, modeFinance also estimates the probability of default and provides a level of
confidence. The probability of default is the degree of certainty (in quantitative terms) that the company will go
into default.
As the probability of default is strongly affected by the economic climate that the company is operating in,
companies in the same MORE class will not necessarily have the same probability of default.
The MORE model can produce a MORE rating even if there is missing data by using an associated confidence level:
Confidence =
∑Available Information∑
Total Information
The level of confidence does not indicate financial confidence in the company. It is a reflection of the variations in
availability of financial data across Europe due to filing regulations and suggests the degree of financial detail the
MORE rating is able to take into account for each company.
For companies with fully populated records a confidence level of 100% would be applied: companies where no
financial data is provided, 0%. This puts the MORE rating in a context for the user and aids interpretation.
OTELCO, INC.Friday, 29 March 2013
MORE Credit Rating
key
D C CC CCC B BB BBB A AA AAA
modeFinance TM srlVAT number [email protected]
Area Science Park,Padriciano 99. 34149 Trieste, ItalyTel. +39 040 3755337Fax +39 040 3756741
Notes and disclaimer
NOTES modeFinance has based the present analysis on the company available financial statements, coming from one or
more of the following sources: local providers, Commercial Register (Companies House), websites, modeFinance’s
database etc.
DISCLAIMER All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any
form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of
the publisher modeFinance. The facts of this report are believed to be correct at the time of publication but cannot
be guaranteed. Please note that the findings, conclusions and recommendations that modeFinance delivers will
be based on information gathered in good faith from both primary and secondary sources, whose accuracy we
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