This course is suitable for:
- Credit analysts
- Those who require an introduction of the role and mechanics of credit analysis.
- Those who wish to learn about and understand the framework of credit analysis within the framework of credit risk management.
- Those who need a structural road map of the analytical process and tie it in to the formation of an effective credit risk management policy within their organisations.
- Analysts undertaking financial analyses of entities and taking them through the credit chain for approval and subsequent monitoring and management.
What you will learn
- How to set the groundwork in the credit analysis, approval, and management process, with a focus on non-financial criteria.
- The information gathering and sifting process necessary to enable the formulation of pertinent and intelligent credit proposals enabling informed credit decisions to be made.
- Non-financial risks (vs. financial risks) and the importance of the ‘new investment criteria’ of the ‘dot com’ economy, as well as traditional elements of non-financial risks such as the nature of the obligor (limited vs. unlimited liability), management, industry, market, and products.
- Models such as SWOT, PEST, and Porter’s Five Forces which are used to assess competitor positions, business strategy and plans, as well as legal and documentation risks.
- The role of auditors.
- Financial statement analysis (financial statements, annual reports and accounts, balance sheets, profit and loss statements).
- A more quantitative approach in focusing on the financial analysis of a borrower.
- The composition, meaning, and analysis of financial statements and company accounts.
- The obtaining, processing, and analysis of company annual reports and accounts with some allusion to financial ratio analysis.
- An orientation on PC based spreadsheet methods and processing of a company’s financial ratios in the light of peer group and industry sector averages.
- Ratio analysis as a tool that is useful in taking a photo at a given moment in time and assessing a borrower’s relative positioning in their industry sector and economic environment.
- Loan documentation, financial ratio covenants, and security arrangements as necessary tools in managing credit risk.
- How to enhance security from a legal perspective as well as a financial aspect (e.g. by incorporating appropriate financial covenants into the loan agreement based on ratios and cash flow forecasting).
- Developing a coherent set of guidelines to proactively manage portfolio exposure via any meaningful credit policy.
- How to set in place effective policy guidelines as a constant tool to ensure portfolio quality.