Merritt Research Services populates values in the Financial Data screen, which are then used to generate formulas and ratios designed to paint an accurate picture of a Credit's current financial condition. These calculations reflect liquidity, fiscal condition, working capital, leverage, coverage, and profitability. These formulas, ratios, and values that comprise them play an important role in credit analysis, but leave room for misinterpretation when considered out of context. The Notes contained within Audited Financial Statements often provide an abundance of information that may not be apparent through the figures shown on the Balance Sheet, Income Statement, and Statements of Cash Flows.
On the Credit Detail screen, essential information that might help better explain a Credit's financials, formulas, or ratios can be found under the Memos tab. In CreditScope, Memos serve as the counterpart to the Notes in the Audited Financial Statements, the source for this information. Common types of Memos include: Discontinued Operations, New Affiliations and Acquisitions, Defaults and Noncompliance, Natural Disasters, Lawsuits and Settlements, Change in Presentation, Going Concerns, Fiscal Distress, and Extraordinary and Special Items.
In addition to the Notes in the Audited Financial Statements, Merritt also draws from other sources such as Official Statements or Continuing Disclosure Documents to obtain "Memo-worthy" information in an effort to provide the most complete and accurate picture of a Credit's financial condition.
While Merritt-inserted Memos are designed to draw attention to certain factors or issues that users might find helpful, they should not be expected to be comprehensive of all matters that the user may find material.