Introduction to Credit Analysis
Credit analysis is the process of determining whether a counterparty will honour its obligations in a transaction. It involves balancing what is gained if they meet their obligation against how much is lost if they do not. To make these assessments, there are a plethora of factors to be taken into account. In this first video of the series, Nick specifically covers three accounts - The Balance Sheet, the Profit and Loss and Cashflow - as factors of a credit analysis.
Overview
In order to successfully judge whether or not a counterparty will honour its obligations in a transaction, we must obtain a picture of them utilising various information sources that we have available. This includes an analysis of company accounts, balance sheets, profit & loss and cash flows.
Key learning objectives:
Define credit analysis
Pinpoint the basics of credit analysis
Identify the 3 measures of credit analysis and how each of them work
Summary
Expert
Nick Beeson
Nick has nearly 35 years of experience in banking. He joined his current employer, Lloyds, in 2005 as Credit Director for Loan Trading. Nick has since undertaken a number of Credit Roles for the Bank. Nick has also worked in education and has lectured for numerous institutions.
