Definition of AAA Rating
Rating is the grading of the entity or the country by an Independent agency to give a true understanding on the credit worthiness and capacity to meet the financial commitments. There are various grades or levels of rating in the combination of A,B, C with various combinations and highest amongst them is AAA.
The rating is calculated for that particular point of time and can change in the successive period based on various internal and external parameters affecting the entity.
It is mandatory for the companies going for borrowing or raising of capital from public. There are various professional agencies who provides rating on the companies such as Standard and Poor (S & P), CARE, ICRA etc. Rating of the entity only gives and assurance on the position of the entity that how it is now and does not certify on the paying capacity in future. It is not responsible or liable for the failure of the entity in future to meet its financial commitments.
However having said this in some cases even the rating goes meaningless in some cases such as China and Japan as they are low rated but very big economies – Payday Loans Near Me.