SPECIALISTS IN FINANCIAL MODELLING

Corporate Credit Risk Analysis

Develop critical analytical decision making skills to better evaluate and manage your company’s exposure.

Learn how to employ a combination of qualitative and quantitative techniques, models and methods of firm and industry analysis during this interactive two-day class.  The course will help you develop a framework and methodology for determining corporate credit and risk by using a combination of soft and hard information.   Understand how to develop a comprehensive view of a company’s market position, finances and o

Develop critical analytical decision making skills to better evaluate and manage your company’s exposure.

Learn how to employ a combination of qualitative and quantitative techniques, models and methods of firm and industry analysis during this interactive two-day class.  The course will help you develop a framework and methodology for determining corporate credit and risk by using a combination of soft and hard information.   Understand how to develop a comprehensive view of a company’s market position, finances and operational leverage, and learn to recognise signs of potential failure and take appropriate risk management strategies. You will also practice applying financial information to credit analysis and performance monitoring.

This course is part of the Finance Training Series:

  • Analysing and Interpreting Financial Statements
  • Implementing Cost Reduction Strategies for Managers
  • Corporate Credit Risk Analysis

Learning Objectives:

By the end of the course participants will:

  • Determine the macro factors which impact a company’s survival
  • Learn how to apply industry analysis to companies and identify warning signs for businesses in distress
  • Identify company specific business risks
  • Understand the consequences of management risks
  • Link financial risks with performance
  • Review financial reporting, accrual accounting, and cash flow statements
  • Analyse working capital, liquidity and operating ratios
  • Understand the importance of operating leverage on corporate sustainability
  • Know how to identify operating value drivers
  • Determining investment decisions and capital structures
  • Recognise the signs of a company’s failure

Who should attend this course?

This course is aimed at analysts working with credit Job titles such as credit managers, lenders, investors, financial advisors, asset managers, banking originators, relationship managers and professionals working in credit risk management and credit product areas.

Prerequisites

It is assumed that participants have had some exposure to financial and accounting concepts in the past.  Participants should have some basic mathematical ability and will require a calculator for the course.  Excel is not used during this course, and laptops are not required.

Content covered:

Day One

Macro context of Corporate Credit & Risk Analysis

  • Analysing competitiveness using Porter’s 5 Forces model
  • Evaluate factors contributing to a company’s survival or failure
  • Identify company specific risks

Stakeholders & Legal Responsibilities

  • Stakeholder assessment protocols
  • The legal foundations of business
  • BSC in strategic performance management and measurement
  • Analyse and identify legal liabilities

Demystify the Balance Sheet

  • Difference between book and market values
  • Valuing and classifying assets and liabilities
  • Describing elements of owners equity:
  1. Shareholder contributions
  2. Retained Earnings
  3. Asset Revaluation reserves

Analysing the Origins of Profit in Financial Reporting

  • Identify margin and profit levels
  • Shortfalls of cash accounting
  • Tell tale signs of creative accounting
  • The depreciation of fixed assets, and assets vs expenses
  • Analyse debtors cycle and construct cash flow statements

Analysing financial information

  • Evaluate relative performance using benchmarks
  • Boost performance using leverage
  • Clarify the difference between market prices

Day Two

Profitability Ratios

  • Insights into using liquidity ratios
  • Understanding operating ratios
  • How to discern the three levels of profitability and look out for window dressing

Case Study of a Local Publicly Listed Company

  • Corporate overview
  • Analyse ASX announcements
  • Apply financial analysis
  • Compare and contrast  2010, 2011, 2012
  • Analyse balance sheet changes over the 3 accounting periods
  • Obtain income statement comparisons and revelations
  • Understand cash flow indicators
  • Analyse notes to financial statements

Beyond Financial Statements

  • Understand how operating leverage impacts corporate risk
  • Identify the signs of poor strategic decisions made by management
  • Discover how management decisions impact corporate credit and risk
  • Analyse industry risk and the impact this has on corporate risk
  • Determine business and market risks

Operating Value Drivers

  • Know how costs and revenues behave
  • Calculate break- even points
  • Cost volume- profit analysis
  • Calculate maximum profit and contribution margin
  • Costing systems, variances and sensitivity analysis

Analysing Investment Decisions

  • Identify strong and weak investment and divestment decisions
  • Use discounted cash flow (DCF) techniques to appraise investment decisions
  • Uncover the motivation of divestment decisions
  • Analyse scenarios of Net Present Value (NPV) and Internal Rate of Return (IRR)

Testimonials:

What past attendees have to say about this course:

“Really enjoyed this course! It had some great information and learnt a new things as well. The instructor was very confident and contemporary” Director Corporate Strategy CQ University

“This was a good starter course in Corporate Credit & Risk Management. I found it very useful” Group Manager Audit & Risk Prescare