Fundamentals of Credit Analysis

Overview

Participants will use a systematic approach to evaluate the credit standing of a company and assess the relative attractiveness of the risk-return profile of the investing / lending proposition.

• Define corporate credit analysis and contrast with equity analysis
• List the benefits of corporate credit analysis
• Types of risk: business vs. financial
• Define the stages of the industry/product life cycle
• Recognize industry metrics used to analyze performance and - trends
• Define and calculate the different types of ratios used for credit analysis
• Explain what the different ratios tell us from a credit analysis perspective
• Recognize the factors that go into determining a company’s optimal capital structure
• Recognize the limitations of financial information in credit analysis
• Define the five forces in the Porter model
• Identify the different corporate structure issues and their - implications for credit analysis
• Describe SWOT analysis
• Describe the role of rating agencies in credit analysis
• Identify the process that rating agencies use to rate companies