Intelligent Living Inc. (fka ILIV)

[JeRK]

RISK RATINGS

GMI’s Risk Rating was developed by Audit Integrity, one of our predecessor firms, as the Accounting and Governance Risk (AGR) rating. The Risk Rating uses an entirely quantitative, statistical process to identify accounting items associated with fraudulent financial statements, as well as governance characteristics associated with firms prosecuted by the US SEC for accounting fraud. Key governance metrics are fully incorporated into the GMI Risk Rating, and GMI will continue to test our ESG and accounting metrics to enhance its effectiveness.


A company’s Risk Rating, on a 1-100 scale, indicates our assessment of the relative aggressiveness of its accounting practices, based on its financial statements and governance profile. We consider the accounting practices of companies in the lowest 5% of our rankings to be “Very Aggressive”; those in the 6-25% range to be “Aggressive"; those in the middle 26-75% range to be “Average”; those in the 76-95% range to be “Conservative”; and those in the top 5% to be "Very Conservative".


While not built to predict investment returns, GMI, academics and our clients have found a clear correlation between the Risk Rating and investment risks and returns. Low rated companies are more likely to have different types of negative events – not only regulatory actions, but shareholder litigation, material restatements and other related events – which have a clear impact on investment risks and returns. Poorly rated companies have lower returns and greater price volatility. The GMI Risk Rating is also a critical component of other GMI risk models, such as the Litigation Risk Model and the Financial Distress Risk Model.


http://www2.gmiratings.com/info.php?id=286

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