Public Finance Quarterly Archive Articles

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

15:21, június 10, 2018.

Zoltán Zéman
University Professor, Head of Institute,
Szent István University, Institute of Business Studies, Gödöllő

Szilárd Hegedűs
Assistant Professor,
Budapest Business School, College of Finance and Accountancy, Budapest
Researcher, National University of Public Service, Public Finance and General
Government Institute

Petronella Molnár
PhD student,
PhD Doctoral School of Management and Business Administration of Szent István
University, Gödöllő,
Researcher, National University of Public Service, Public Finance and General
Government Institute

Published in: Public Finance Quarterly 2018/2. (p. 176-195.)



Summary: 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

JEL-codes: H11, H40, H70, M41



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