Group Project: Credit Risk Analysis The purpose of this project is to assess the credit risk of PUBLIC STORAGE (the company). Credit risk analysis looks at four Cs of credit: character (management...

Table of Contents
Executive Summary    2
Introduction    3
Capital Structure    4
Financial Analysis    6
Analysis of Covenants    8
Overall Rating    9
Conclusion    10
Executive Summary
We will look at the overall study of a public storage organisation in this research. We will go through every aspect of the company and how it operates. This study examined and analysed the company's overall financials and capital structure. According to the rating analysis, the organisation has performed admirably, which is a very positive indicator. Finally, we believe that the company's capital structure appears to be strong, but it needs to focus more on its business liquidity ratio in the future to get better results.
Introduction
Public Storage is a worldwide self-storage corporation based in Glendale, California, and managed as a real estate investment corporation. It is the foremost self-storage company in the United States. It was the biggest of the four publically listed storage REITs in 2008.
Vision
The company has one shared goal: to create a diverse and inclusive atmosphere in which all employees feel respected, included, and enthusiastic to be a part of a world-class team. With over 5,000 employees of all colours, cultures, and life experiences, Public Storage values inclusivity and the diversity that each person offers to the firm. The organisation believes that a commitment to diversity and inclusion strengthens the company and instils pride in the people and customers it serves.
Sustainability
Public Storage has thousands of facilities across the United States, making it the largest self-storage company in the country. From the corporate headquarters to every site, the company is committed to lowering its environmental footprint by taking a proactive, integrated approach to sustainability. To assist in making an informative storage decision, facilities with a leaf-circle have one or more of the aforementioned sustainable activities in place.
For almost five generations, Public Storage has been the recognized leader in delivering quality, efficiency, and hygiene to self-storage clients across the country. The firm's corporate approach has remained consistent over time: build value by managing the facilities and business for the foreseeable future. Following the tactic has contributed in the following: a locationally diverse real estate investments with low ecological influence; a high-integrity corporate culture, fortress balance sheet, and unprecedented logo and functioning framework that generate strong free cash stream and stable expansion; and very well threat with substantial value formation for stockholders.    
B. Wayne Hughes and Kenneth Volk Jr. created Public Storage Inc. in 1972. By 1989, it had expanded to 1,000 outlets, thanks to finance from real estate limited partnerships (RELPs). When Storage Equities amalgamated with Public Storage and took its name in 1995, the private firm was reorganized as a publicly traded REIT. Fraught Storage Facilities was purchased for $5.5 billion in 2006. Shurgard has subsequently been split out as a distinct publicly traded business, with Public Storage holding a 36.6 percent stake.
Micro risk is a sort of political hazard that alludes to activities in a host region that have the potential to negatively impact a firm's worldwide activities. Micro hazard can arise as a result of circumstances outside the authority of the ruling administration. Businesses may find it difficult to earn income in certain regions outside their own boundaries as a result of these micro hazards. Businesses may undertake a vulnerability assessment before deciding to do commerce in a foreign marketplace to identify what political dangers they may face after their company is established in that country.
Corporate Governance
Disclosure, integrity, and protection are the three pillars of organizational governance that the Public Storage adheres to. All three are necessary for a firm's performance and the development of strong corporate linkages among its partners, which comprise board directors, managers, workers, and, most significantly, investors (Public Storage, 2021)
Competitive Landscape
Market share of the company is 0.71 percent, Competitor’s market share 99.29 percent (CSI, 2021) Despite fierce rivalry, the self-storage sector in the United States remained dispersed. Company estimate that they possess around 6% of total self-storage square footage in the United States, and that the five biggest self-storage companies in the country own about 12%, with the remaining self-storage space held by a variety of private regional and local businesses. Company feel that market diversity strengthens the value of the brand reputation, as well as the economies of scaling company enjoy, with about 71 percent of the same-store sales generated in the 20 largest metropolitan statistical regions.
Sales Growth
The above chart depicts the firm's existing sales growth. Based on the above chart, we can conclude that the firm has done a good job of expanding revenues year over year. This illustrates the management's efficacy and productivity as well as the company's growth plan and growth factor.
Capital Structure
The exact mix of debt and equity employed to fund a corporation 's assets and activities is referred to as capital structure. The capital structure of a firm is the consequence of these investment decision, which may be influenced by capital structure goals or targets established by administration and the board of directors.
The optimum mix of debt and equity financing that maximises a corporation 's market worth while lowering its cost of capital is called an optimal capital architecture. One strategy to optimise for the least expensive mix of financing is to reduce the weighted average cost of capital (WACC).
Companies’ capital structure
Fig 1: Overview of the...