Corporate Credit Analysis

Start Dates: TBC

Duration: 2 - 3 Days

Full Fee: €600

Network Members Fee: €350*

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Programme overview

This course will enable delegates to understand the principles and practice of corporate credit analysis together with a comprehensive framework to assess the critical risk factors affecting corporate borrowers. The course provides a general description of the credit risk analysis, showing how it adds value to an organisation and explains the key components of credit risk analysis. Case studies and exercises are used widely to ensure the training is interactive and practical

Learning outcomes

This course will provide participants with an understanding of:

  • Financial Statements
  • Ratios (e.g. ROCE, ROE),
  • WACC,
  • Cash Flow Forecasting,
  • Market Valuation
  • Covenants and Debt Capacity
  • Implications of a Covenant breach
  • Validation of Client forecasting,
  • Assessing management and corporate structure (e.g. Corporate Governance)

Who is the course for?

This course is suitable for all staff working in the banking and financial services industry.

Modules

Session 1: Introduction to Analysis

  • The objectives of credit analysis
  • The role of the credit analyst
  • Structured approach to credit analysis
  • Credit Cycles
  • Probability of default, loss given default and expected loss

Case study/discussion point

Session 2:  Understanding Financial Statements

  • Importance of financial Statements
  • Balance Sheets
  • Profit and Loss Accounts
  • Management accounts
  • Cash flow Forecasts-Assumptions and Sensitivities
  • Off balance Sheet Assets
  • Risk and Mitigants
  • NPV, Payback

Case Study/Exercise

Session 3:  Ratio Analysis

  • Minimum requirements
  • Ratios
  • Trend Analysis
  • Key Performance Indicators
  • Financial Strength
  • Liquidity
  • Serviceability
  • Working Capital Management & Asset Performance

Case Study/Exercise

Session 4:  Other Financial & Cash Flow Analysis

  • Defining cash flow
  • Free cash flow
  • EBITDA & Debt capacity
  • Cash flow adequacy, liquidity and ratios
  • ROCE, ROE
  • WACC
  • Market valuation
  • Breakeven analysis
    • Introduction to breakeven and operational ratios
    • Other financial ratios, definitions

Case study/discussion point

Module 5: Managing Loan Covenants

  • Loan agreement
  • Covenants
  • Affirmative Covenants
  • Negative Covenants
  • Events of Default
  • The implications of a breach
  • Dealing with breaches
  • Conflicts
  • Waivers

Case Study/Exercise

Module 6: Introduction to Mitigating and Managing Credit Risk

  • Loan agreement
  • The credit time line
  • Migration risk – doubtful debt, default and bad debt
  • Corporate credit scoring
  • Diversification and portfolio management
  • Securitisation
  • Collateral
  • Credit derivatives
  • Netting

Case Study/Exercise

Module 7: Introduction to Measuring Credit Risk

  • Loan agreement
  • Loss distributions and loss tails
  • Quantifying expected and unexpected losses
  • Credit v market risks
  • Credit risk concepts
  • Probability of default

Case Study/Exercise

Session 8:  Non- Financial Analysis

  • The need for both Financial and non-financial analysis
  • Real Business issues
  • Corporate structures
  • Corporate Governance
  • Value Stream
  • Identification of critical success Factors
  • Identification of Key Performance Indicators
  • Credibility of Business Plans
  • Credibility of Management

Case Study/Exercise

Session 9:  Forecasting and Modelling

  • Cash drivers
  • Principles & pitfalls of forecasting
  • Stress tests and benefits of forecasts

Case study/discussion point

Session 10: Financial Distress

  • Key operational indicators
  • Financial early warning signals
  • Recovery analysis
  • IFRS 9

Trainer Profile

Please contact info@ifsskillnet.ie for more information on training providers.