Podcast
Questions and Answers
Which of the following is NOT one of the key factors that a credit analyst needs to evaluate when assessing a borrower's capacity?
Which of the following is NOT one of the key factors that a credit analyst needs to evaluate when assessing a borrower's capacity?
The statement of cash flows is used to identify the company's:
The statement of cash flows is used to identify the company's:
Which of the following is NOT a key component of the cash flow statement?
Which of the following is NOT a key component of the cash flow statement?
Which of the following is a key factor that a credit analyst should consider when evaluating a company's capacity to service and repay debt?
Which of the following is a key factor that a credit analyst should consider when evaluating a company's capacity to service and repay debt?
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Which of the following is NOT a key component of the Corporate Finance Institute's capacity assessment framework?
Which of the following is NOT a key component of the Corporate Finance Institute's capacity assessment framework?
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Which of the following is the LEAST important factor for a credit analyst to consider when assessing a borrower's capacity?
Which of the following is the LEAST important factor for a credit analyst to consider when assessing a borrower's capacity?
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Which of the following is the MOST important factor for a credit analyst to consider when assessing a borrower's capacity?
Which of the following is the MOST important factor for a credit analyst to consider when assessing a borrower's capacity?
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Which of the following is NOT a key component of the Corporate Finance Institute's capacity assessment framework?
Which of the following is NOT a key component of the Corporate Finance Institute's capacity assessment framework?
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Which of the following is the LEAST relevant factor for a credit analyst to consider when assessing a borrower's capacity?
Which of the following is the LEAST relevant factor for a credit analyst to consider when assessing a borrower's capacity?
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Which of the following is the MOST important component of the Corporate Finance Institute's capacity assessment framework?
Which of the following is the MOST important component of the Corporate Finance Institute's capacity assessment framework?
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Study Notes
Porter's 6 Forces
- Evaluate industry dynamics and attractiveness by analyzing:
- Threat of potential entrants
- Power of complementary good/service providers
- Bargaining power of buyers
- Intensity of industry rivalry
- Threat of substitute goods/services
- Bargaining power of suppliers
PEST Analysis
- Assess the general business environment by examining:
- Political factors
- Environmental factors
- Legal factors
- Economic factors
- Technological factors
- Social factors
Corporate Finance Institute (CFI)
- Assessing industry dynamics and attractiveness using Porter's 6 Forces
- Conducting PEST analysis to assess the general business environment
- Analyzing company's competitive position and risk management
SWOT Analysis
- Evaluate internal factors:
- Strengths
- Weaknesses
- Evaluate external factors:
- Opportunities
- Threats
Loan Contract and Requirements
- Key components of a loan contract:
- Conditions – guidelines and obligations
- Purpose
- Amount
- Specific loan conditions
- Term
- Pricing
- Covenants
- Importance of understanding loan conditions to assess risk
Character Overview
- Evaluate a company's character by:
- Assessing its history and operations
- Assessing the management team
Assessing the Company
- Evaluate company history:
- Length of existence
- Track record
- Customer base
- Growth (organic and through acquisitions)
- Evaluate current operations:
- Understanding of business operations
- People, process, and information systems
- Evaluate future operations:
- Growth plans (organic, mergers, acquisitions, new markets, new products)
- Extension of existing or new products and services
Assessing the Management Team
- Evaluate management team's:
- Past performance
- Reputation
- Planning experience
- Business and financial acumen
- Attitude towards risk
- Skills in:
- Planning
- Organizing
- Leading
- Controlling
- Communication
- Financial reporting
- Measurement
- Financial compliance
- Competency
- Performance reporting
Capacity Overview
- Evaluate a company's capacity to service and repay debt by:
- Analyzing current and forecasted operating cash flow generation
- Evaluating cash tied up in working capital
- Assessing sustainable forecasted cash flow to service debt obligations
Analyzing the Cash Flow Statement
- Use the cash flow statement to identify sources and uses of funds
- Evaluate operating, investing, and financing activities
- Analyze drivers of sustainable profitability and growth
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Description
Test your knowledge on assessing industry dynamics, attractiveness, and conducting a PEST analysis. Explore topics like Porter's 6 Forces, threat of potential entrants, bargaining power of buyers, industry rivalry, and more.
