Okay, so let's have a look at how we assess the business risk of Smithy. First of all, the size of the company. Smithy is not particularly big, and for such a small company, it's very, very rare to have an investment grade rating. So the size is certainly not an advantage here. The company's got a pretty narrow product focus and there's not much innovation going on in the product area. The labor is expensive, which is a problem. The company has a strong global presence, but the future growth is driven by Asia, and in Asia, Smithy is small. The business and the company is capital intensive, which is a problem. The company is a market leader and it has some well recognized brands, however, being a market leader, yes, that's positive, but it's not a super positive unless the industry is also in a good place. There's fierce competition in the industry and there is increasing risk of substitutions, et cetera. Finally, the management is playing it safe, though. They're focused on margins instead of growth. So let's see how Smithy fits into the company lifecycle graph, a graph that we've seen before.

Well, Smithy is probably somewhere between the maturity and the decline stage here, and the decline stage, of course, indicates reducing sales, constant costs and possibly reducing profits. We might see reduced debt capacity. Cash flows might be shrinking and the returns are slowing down. So let's make a final assessment then of the total business risk for Smithy.

On a company level, we would probably say that the risk is significant. They are a market leader, but it's got expensive labor. There's not much innovation going on. The company's pretty small. It's mature to declining in terms of where it stands in its business cycle. The industry, intermediate risk. It's a mature industry, it's capital intensive, and the industry is not growing by a lot. Country risk we view as low. Obviously the main country here is the United States, and we don't consider that a high-risk country at all. And finally, management. Management is solid. They're looking at improving margins, cutting costs, and they have a strong track record. So overall, we would probably say that the business risk for Smithy here is on the intermediate level.