Credit Risk Analysis

Course details

During this course, participants will learn to analyze financial statements, evaluate borrower creditworthiness, explain the asset conversion cycle, discuss the various types of risk encountered in lending, and evaluate the structure of the loan.

Course Objectives:

• List the various types of financial statements.
• Explain the asset conversion cycle.
• Describe the various types of risk encountered in lending
• Evaluate the loan structure.

Course Outline:

Module 1: Financial Statements

• Types of financial statements
• The various balance sheet and income statement items
• Spreading financial statements
• Financial analysis as a tool of credit decision-making
• Practical exercises and case studies

Module 2: The Asset Conversion Cycle

• Assessing borrower capacity to complete the asset conversion cycle
• Risks associated with the asset conversation cycle
• Practical exercises and case studies

Module 3: Various Types of Risk

• Determining and measuring the acceptable level of risk
• Types of risk:
• Inventory risk
• Collection risk
• Legal structure risk
• Exchange rate risk
• Business risk
• Political risk
• Asset-based financing risk
• Practical exercises and case studies

Module 4: Evaluating the Loan Structure

• Medium-term financing
• Investment costs
• Financing structure (financing mix)
• Preparing projected financial statements
• Evaluating the company’s capacity to service debt
• Practical exercises and case studies

Assessment Strategy:

Participants will be assessed formally through an end of training course test