Division 3.5.3 ThresholdsF1

According to the results obtained for each of the abovementioned ratios, the following quotes are given:

The following rules are applied for the special cases where the ratio is negative, or contains a zero denominator or numerator:

• Liquidity:

  • If (Current assets-Stock-Debtors after one year) ≤ 0, the result shall be 0 with weak qualifications. The value for (Current assets-Stock-Debtors after one year) cannot be negative.

  • If the short term debt (bank and non-bank) = 0, and the above (Current assets-Stock-Debtors after one year) is not zero, the result shall be 2 with good qualifications.

• Profitability (1):

  • If GOP ≤ 0, the result shall be 0 with weak qualifications.

  • If the Turnover = 0, the Operating income shall be used for the calculation.

  • If the Operating Income = 0 or negative, the result shall be 0 with weak qualifications.

  • Turnover cannot be negative.

• Solvency:

  • If Equity = 0, the result shall be –1 with weak qualifications in all cases.

  • If Total debt = 0 and the Equity is positive, the result shall be 0 with good qualifications.

  • If Total debt = 0 and the Equity is negative, the result shall be -1 with weak qualifications.

  • The calculation of the Equity flag is based on the same principles, but it will be considered ‘positive’ if the indicator ‘Total debt/Equity’ is superior or equal to 0 and inferior or equal to 10.