rating

noun
rat·ing | \ ˈrā-tiŋ \

Definition of rating 

1 : a classification according to grade specifically : a military or naval specialist classification

2 chiefly British : a naval enlisted man

3a : relative estimate or evaluation : standing the school has a good academic rating

b : an estimate of an individual's or business's credit and responsibility

c : an estimate of the percentage of the public listening to or viewing a particular radio or television program

4 : a stated operating limit of a machine expressible in power units (such as kilowatts of a direct-current generator) or in characteristics (such as voltage)

Examples of rating in a Sentence

The school has an above-average academic rating. The article compares the fuel-economy ratings of various cars.

Recent Examples on the Web

Even with more reliable data, Medicare’s five-star rating system still has shortcomings. Jordan Rau, Washington Post, "‘Like A Ghost Town’: Erratic Nursing Home Staffing Revealed Through New Records," 13 July 2018 Even with more reliable data, Medicare’s five-star rating system still has shortcomings. Jordan Rau, sandiegouniontribune.com, "‘It’s almost like a ghost town.’ Most nursing homes overstated staffing for years," 11 July 2018 Plus, Brown says, the ratings system works as a judge of moral character. Aarian Marshall, WIRED, "The Good and Bad of Ride-Sharing When It Comes to Race," 11 July 2018 As for the University of Cincinnati, the Bearcats program earned 110 points in the CBS Sports rating system, good enough for No. Patrick Brennan, Cincinnati.com, "Ohio State tops CBS Sports 'Best in College Sports' rankings," 11 July 2018 Last year, finally having learned the power of the thumbs, Netflix ditched its five-star rating system for the simple thumb up/thumb down. John Warner, chicagotribune.com, "Thumbs down to murky star ratings: Tell us whether a book is worth reading," 10 July 2018 Even with more reliable data, Medicare’s five-star rating system still has shortcomings. Jordan Rau, New York Times, "‘It’s Almost Like a Ghost Town.’ Most Nursing Homes Overstated Staffing for Years," 7 July 2018 The payroll records provide the strongest evidence that over the last decade, the government’s 5-star rating system for nursing homes often exaggerated staffing levels and rarely identified the periods of thin staffing that were common. Jordan Rau, BostonGlobe.com, "Nursing homes routinely mask low staff levels," 7 July 2018 No ratings system is perfect, and Leapfrog isn't the only program U of L Hospital uses as a benchmark. Morgan Watkins, The Courier-Journal, "University of Louisville Hospital says it's on mend minus KentuckyOne," 5 July 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'rating.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of rating

1702, in the meaning defined at sense 1

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Phrases Related to rating

approval rating

credit rating

the ratings

Statistics for rating

Last Updated

17 Sep 2018

Look-up Popularity

Time Traveler for rating

The first known use of rating was in 1702

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More Definitions for rating

rating

noun

Financial Definition of rating

What It Is

In personal finance, the term rating commonly refers to a credit rating score issued by the Fair Isaac Corporation (a "FICO score"). A person's credit rating indicates how creditworthy he or she is.

In corporate finance, rating usually refers to a "grade" assigned to a bond, bond issuer, insurance company or other entity or security to indicate its riskiness. Securities analysts often issue ratings on stocks; these ratings are usually "Buy," "Sell" or "Hold."

How It Works

Bond rating agencies like Moody's and Standard & Poor's (S&P) provide a service to investors by grading fixed income securities based on current research. The rating system indicates the likelihood that the issuer will default either on interest or capital payments.

For S&P,  the ratings vary from AAA (the most secure) to C.
For Moody's, the ratings go from Aaa to D, which means the issuer is already in default.

Only bonds with a rating of BBB or better are considered "investment grade." BBB bonds are considered to be suitable for investment by institutions. Anything below the triple-B rating is considered to be junk, or below investment grade. Bond ratings are periodically revised based on recent data.

Treasury bonds are not rated because they are backed by the "full faith and credit" of the United States government. They are considered to be the safest of investments because the government has the power to levy taxes in order to pay its debts.

Why It Matters

Ratings have huge influence on the price and demand for certain securities, particularly bonds: The lower the rating, the riskier the investment and the less the investment is worth. Low ratings often lead to less trading activity and thus liquidity problems. This is why downgrades (or rumors of downgrades) in an issuer's credit rating can have a significant impact on its securities and on the market or industry.

Bonds are not the only securities affected by credit ratings, however. Preferred stock prices can move sharply when the issuer's credit rating changes (as this is an indicator of the issuer's ability to meet preferred dividend obligations). Securities that are convertible into a company's debt are also affected by credit ratings, especially if the convertible security is trading near or above the point at which the holder may convert the security to debt.

Low ratings are not always bad. They simply mean there is more risk associated with an investment and thus more potential for higher returns. In fact, many income investors actively enhance their returns by dividing securities into sectors based on certain characteristics such as credit rating, yield, coupon, maturity, etc., and then finding those sectors that will perform most favorably for the investor under certain market conditions.

Grouping securities by rating is common because investors are trying to rank investments, buy those positioned to improve and sell those expected to decline. An issuer doesn't need to actually default or lose money for an investor to lose money, however -- remember that the simple threat of default or decline can lower the price of the security. This threat could be sensitivity to adverse business conditions, rumors of a ratings downgrade or inaccuracy of ratings agency opinions.

Source: Investing Answers

rating

noun

English Language Learners Definition of rating

: a measurement of how good, difficult, efficient, etc., something or someone is

the ratings : numbers that show how many people watch or listen to a particular television or radio program

: a symbol that is officially given to a movie, video game, etc., to tell people what audience it is appropriate for

rating

noun
rat·ing | \ ˈrā-tiŋ \

Kids Definition of rating

: a position within a grading system credit rating

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