Scientific Journal of KubSAU

The article discusses the necessity to consider industry characteristics in assessing the financial status and solvency of economic entities. The functioning of the agricultural sector organizations is characterized by a number of features including the high risks, seasonal production, uneven cash flows from operating activities, low profitability of the business and low capital turnover ratio. Under these conditions, the credit rating of the agricultural producers, based on an analysis of their financial situation, is essential to determine the risks associated with the impossibility to return the principal sum and interest. Each bank develops its own methodology for an evaluation of the credit risks of the borrowers, taking into account the credit policy and customer features. The study has shown that the analysis of the borrower's financial situation through a variety of factors underlies the assessment of the creditworthiness. The article also discusses the credit rating methodologies of the federal and regional commercial banks. Their similarities and differences are highlighted both by a set of the applied indicators and by the recommended threshold limits. The conclusion is that the current methodologies insufficiently take the industry characteristics of borrowers into account that increases the risks of loan default. Applying an individual approach to the evaluation of their financial status and taking the industry characteristics activities and the development effectiveness into account are recommended at crediting of the agricultural producers