APLKCH10

APLKCH10 - CH.10 CH.10 CREDITANALYSISAND DISTRESSPREDICTION...

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CH.10 CH.10 CREDIT ANALYSIS AND  CREDIT ANALYSIS AND  DISTRESS PREDICTION DISTRESS PREDICTION
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Credit Analysis Is the evaluation of a firm from the perspective of  a holder or potential holders of its debt. Key element: the prediction of the likelihood a  firm will face financial distress
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The Market for Credit Suppliers for credit: Commercial banks Other financial institutions Public debt markets Sellers who provide financing
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The Credit Analysis Process Step 1: Consider the nature and the purpose of the  loan Step 2: Consider the type of loan and available  security Open line credit Revolving line of credit Working capital loan Term loan Mortgage loan Lease financing
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The Credit Analysis Process Step 2 (Cont’d): Security Receivables Inventory Machinery and equipment Real estate
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The Credit Analysis Process Step 3: Analyze the potential borrower’s financial 
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APLKCH10 - CH.10 CH.10 CREDITANALYSISAND DISTRESSPREDICTION...

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