Credit Analysis Methods

What You Will Learn

• 1 Learn the fundamental concepts of credit risk and the role of credit analysis in lending decisions.
• 2 Understand how to analyze financial statements including balance sheet, income statement, and cash flow statement for creditworthiness.
• 3 Apply cash flow analysis techniques to evaluate a borrower's ability to generate sufficient cash to service debt.
• 4 Develop proficiency in ratio analysis and use industry benchmarks to assess financial health.
• 5 Analyze industry dynamics and business risks that affect a borrower's repayment capacity.
• 6 Evaluate management quality, corporate governance, and strategic positioning as part of credit assessment.
• 7 Understand loan structuring options, covenant design, and their role in risk mitigation.
• 8 Learn quantitative credit scoring models including logistic regression, decision trees, and machine learning approaches.
• 9 Apply portfolio credit risk measurement techniques including expected loss, value-at-risk, and stress testing.
• 10 Recognize credit risk mitigation instruments such as collateral, guarantees, credit derivatives, and understand regulatory frameworks like Basel III.