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Principle of Credit Evaluation

Principle of Credit Evaluation - C RED I T EVALUAT ION AND...

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CREDIT EVALUATION AND SCORING 0. REQUIRED INFORMATION 1. Financial statements 2. Credit reports on payment history of the firm with other firms. 3. Banks 4. The payment history of customers with the firm. A. 5 Cs of CREDIT EVALUATION: 1. Character: The willing of the customer (borrower) to meet credit obligation. 2. Capacity: The ability of the customer (borrower) to meet credit obligations out of operating cash flows. 3. Capital: The financial reserves of the customer (borrower). 4. Collateral: Assets of the customer (borrower)
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pledged in the case of default. 5. Conditions: General economic conditions in the business line of the customer (borrower). B. 5 Ps of CREDIT EVALUATION:
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