What it is:
Moody's(NYSE:MCO) is a publicly traded financial services company.
How it works (Example):
Moody'soperates two segments: Moody's Investor Service and Moody's Analytics.
Moody's Investor Service provides ratings and research on , other debt instruments and other securities. Moody's Analytics creates and sells analytical financial software and provides advisory services and research intended to predict and measure financial risk.
The company is most known for the ratings it gives for debt obligations and structured-finance deals of corporations, states, institutions and governments. Its ratings are similar to ratings also offered by competitor Standard & Poor's (S&P).
Why it Matters:
The idea behind Moody's and other companies like it is to provide not just information to investors, but also insight that can help them make better decisions (as with ratings, for example). The value comes not only from the information and insight itself, but also from the notion that Moody's is an independent entity that is not beholden to any particular and thus has no incentive to anything other than an objective assessment of a particular 's risk.