We analyse diversified companies by looking at the drivers for each represented industry and the competitive position of each business to reflect the whole corporate structure, not just the biggest division. US companies tend to be less diversified than European ones.

We treat pensions differently from financial debt, diminishing the dependence of credit metrics on volatile discount rates and making rating changes less sensitive to mechanical inputs.

We regard cash liquidity as a distinct ratings driver, in that sustainable excess liquidity can have a positive impact on ratings.

We recognise that corporate owners’ business philosophies differ from country to country, with the high proportion of family-owned companies in France, Germany and Italy, for example, contributing to longer-term investment horizons.