Analysis of the Creditworthiness of Local Government-owned Companies with a Credit Scoring Method

Zoltán Zéman, Szilárd Hegedűs and Petronella Molnár

Public Finance Quarterly, 2018, vol. 63, issue 2, 176-195

Abstract: In this study, we analyse the creditworthiness of local government-owned companies by means of a modelled scoring system, a scorecard-based credit scoring method adapted to local government-owned companies. The analysis that uses an objective factor-based scoring system covers all the areas of operation of the companies, encompassing their management. The scoring system is used to classify the examined companies into appropriate categories based on their key financial indicators. The analysis covers the period between 2013 and 2016. The study gives us an overview of the credit rating of local government-owned companies, which will be examined on a territorial dimension, as well, for the purpose of levelling. Based on the results of the research, the creditworthiness of local government-owned companies changed in a hectic manner in the examined period, but the majority of the public companies examined belong to the creditworthy category.

Keywords: local government controlling; liquidity; profitability; creditworthiness (search for similar items in EconPapers)
JEL-codes: H11 H40 H70 M41 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:pfq:journl:v:63:y:2018:i:2:p:176-195

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