- Overview of the Credit Analysis Process
- Risk and return dimensions
- Country and corporate risk issues
- Credit default rates and risk grading
- Fundamental principles of credit risk
analysis
- What Goes Into a Risk Rating Opinion?
- A structured analysis framework for credit
- Balancing the quantitative and qualitative
aspects of risk
- Likelihood of default, nature of obligation
and degree of protection
- Credit migration matrices
- Credit risk and pricing
- Advanced Financial Risk Evaluation
- Accounting framework and credibility
- Financial policy and control framework
- Key indicators of performance
- The effects of growth, organic and acquisition-led
- Assessing profitability relative to cost
of capital
- Understanding the asset structure, fixed
and working assets
- Evaluating the gearing position and the
financial risk involved
- Understanding the repayment profile and
term
- Identifying the source of profit and its
stability
- Assessing the effects of inflation and
the real profit position
- Calculating the sustainable profit level
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- Cash Flow Risk Evaluation
- The dynamic cash flow cycle in a company
- Untangling the cash flow statement
- Linking cashflow and historical ratios
- Evaluating repayment ability on a cash
flow basis
- Calculating cashflows when there is no
cash flow statement
- Understanding the cash flow statements
of other countries
- Analysing Business Risks
- Macro-environmental risk analysis; cyclical/mature/growing
- Strategic evaluation
- Assessing competitive position
- Company/product portfolio evaluation and
diversification
- Market environment analysis
- Market/product life cycle and market share
- Value chain and peer group assessment
- Internal operational and management assessment
- Track record, attitude to risk, relationship
with shareholders
- Corporate Capital Structure
- Understanding optimal capital structure
and risk
- Structuring the junior/senior debt
- Hybrid debt and equity issues in capital
structure
- Cash flow cover ratios and repayment risk
- Understanding the term structure of risk
- Company cost of capital and risk components
of beta
- Company value, market value of debt and
WACC
- Understanding PER multiples and implied
risk or growth assumptions
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