Grifols, S. A., is a Spanish pharmaceutical company focusing on the development, manufacturing, and sale of therapeutic products. At the end of 2013, Grifols was rated "BB" by Standard & Poor's and considered to have a stable business risk profile.

Required a. What is a credit rating and why would a potential investor in bonds be interested in a company's credit rating? b. What type of factors does a credit rating agency consider in rating a company? c. Compute funds from operations over debt and debt to EBITDA for 2012 and 2013 using the selected financial statement information above. d. Research the financial risk rating by Standard and Poor's and use it as benchmark to asses the financial risk profile of the company for both years

Grifols, S.A. ( in thousands) Operating income from continuing operations after tax Operating profits before interest income, interest expense, and income taxes Depreciation and amortization Deterred income tax expense Asset impairment losses (gains) Major non-cash charges (gains) Short-term debt Long-term debt Equity December 31 2013 2012 E 342,054 255,377 735,120 660,084 128,469 129,126 14,992 97018 271 11.442) 14,873 (1.7741 248,708 189,335 2,437,978 2.585,988 2,107204 1.880,741 Grifols, S.A. ( in thousands) Operating income from continuing operations after tax Operating profits before interest income, interest expense, and income taxes Depreciation and amortization Deterred income tax expense Asset impairment losses (gains) Major non-cash charges (gains) Short-term debt Long-term debt Equity December 31 2013 2012 E 342,054 255,377 735,120 660,084 128,469 129,126 14,992 97018 271 11.442) 14,873 (1.7741 248,708 189,335 2,437,978 2.585,988 2,107204 1.880,741