Credit Risk Analysis Professional Certificate
Gain CPE:35 Credits



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5 Days

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Virtual Classroom
5 Days

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Virtual Classroom
5 Days

Price as configured: $3,899.00

Credit Risk Analysis Professional Certificate

Gain a solid grounding in credit risk fundamentals with the tools and techniques required to perform a credit analysis - utilizing analytical tools to project future performance.

Prerequisite knowledge:

  • Basic accounting
What You'll Learn
Who Should Take This
eventDay 1

Module 1: Overview of Credit

  • Interaction of the market, the client and credit
  • Understanding market, credit and operational risks
  • The 5Ps and 5Cs of Credit
  • Shareholder Value Added
  • Risk/Reward and capital allocation
  • Purpose and Payback
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Module 2: Credit Analysis Fundamentals

  • Corporates versus Financial Intermediaries
  • Specialized Industries
  • Specialized Products
  • Sources of information
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Module 3: Business and Industry Analysis

  • Industry Analysis including SWOT, critical success factors and Porter framework
  • Operation/Business analysis
  • Business risk versus financial risk
  • The asset conversion cycle
  • Environmental and Regulatory risk analysis
  • Management Analysis
  • Early Warning Signs
  • Credit red flags
  • Exercise: Balance Sheet Recognition Homework: Participants will complete the business and industry analysis for the selected company
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Module 4: Rating Agencies

  • Role
  • Concepts/Process
  • Methodology/Issues
  • Oversight
  • Ratings
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eventDay 2

Module 1: Ratios and Credit Statistics

  • Advantages and Limitations of ratios
  • Types of Ratios including: profitability, asset quality and efficiency, leverage and coverage
  • Peer comparisons/Industry benchmarks
  • Specialized industry ratios
  • Seasonality
  • Overall performance ratios: DuPont formula
  • Exercise: Ratio Analysis Homework: Participants will complete the ratios for the selected company
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eventDay 3

Module 1: Cash Flow Analysis

  • Structure of the cash flow statement
  • Sources and Uses
  • Reconciliations including PP &E, Intangibles, Investments, Deferred Taxes, Long term debt, Minority interest and Equity
  • Exercise: Participants will complete the cash flow for the selected company
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Module 2: Historical Financial Analysis

  • The Audit
  • Review of historical patterns and industry performance
  • Income Statement analysis
  • Balance Sheet analysis
  • Cash Flow analysis
  • Exercise: Participants will work in small groups to complete the FYE analysis
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eventDay 4

Module 1: Off Balance Sheet Items

  • Contingent liabilities
  • Operating leases
  • Debt of joint ventures and unconsolidated subsidiaries
  • Guarantees
  • Take-or-pay contracts and obligations under throughput and deficiency agreements
  • Receivables that have been factored, transferred or securitized
  • Contingent liabilities e.g. potential legal judgments or lawsuit settlements
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Module 2: Additional Risks to Consider

  • Financial guarantees
  • Performance guarantees
  • Ratings triggers
  • Covenants
  • Revenue recognition
  • Unusual gains and losses
  • Asset write-offs
  • Swap exposures
  • FX exposure
  • Pension deficits
  • Securitization
  • Structural subordination
  • Partnerships/SPVs
  • Leases
  • Environmental
  • Product liability
  • Exercise: Annual Reports: identifying and recognizing industry and company specific off-balance sheet risks
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Module 3: Forecasting

  • Building a forecast-framework and methodology
  • Qualitative and quantitative factors
  • Base, management, and downside cases
  • Critical value drivers
  • Analyzing results- assessing debt capacity, recommending financing alternatives, public versus private, quantifying results and drawing conclusions
  • Exercise: Forecasting the critical value drivers for selected companies
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eventDay 5

Module 1: Structuring and Documentation

  • Investment grade versus non-investment grade
  • Holding company analysis
  • Guarantees, Keepwells, LOMIs
  • Collateral secured versus unsecured
  • Liquidation analysis
  • Borrowing base
  • Covenants
  • Subordination
  • Exercise: Due diligence for selected case studies
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Module 2: Derivatives

  • Introduction
  • What is credit risk
  • Purpose of credit derivatives
  • Market participants
  • Role of regulators
  • The Credit Default Family
  • ISDA
  • Description of vanilla vs. structured derivatives
  • Total Return Swaps
  • Characteristics
  • Exercise
  • Credit Default Swaps
  • Characteristics
  • Risks and Risk Management of Credit Derivatives
  • Credit
  • Operations
  • Market
  • Liquidity
  • Legal
  • Risk Management
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Module 3: Presentations

  • Participants will present the complete credit analysis for the selected company
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Module 4: Desk Ready Skills Knowledge Check

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      Real world company examples mimic on the job experiences in analyzing factors that affect a firm's future performance

    • Complete a business and industry risk analysis
    • Understand the relationship between the qualitative and quantitative aspects of a credit analysis and calculate the ratios foe the selected company
    • Understand rating agency methodology and public ratings
    • Analyze the ratios in context with the business and industry analysis and draw conclusions on the historical data
    • Compare peer performance and complete a trend analysis for the selected company
    • Recognize the off-balance sheet risks and quantify these risks
    • Perform a cash flow analysis and associated reconciliations
    • Forecast the key value drivers and their impact on the company's future performance
    • Analyze the existing capital structure and determine the appropriate financing alternatives for the target company
    • Propose structuring solutions consistent with a risk/reward strategy
    • Apply operational risk techniques to determine key documentation requirements
    • Conclude, via a written and oral presentation on the creditworthiness of the selected company including recommendations

    Recommended for:

    Investment professionals
    research analysts
    corporate bankers
    fixed income analysts
    and credit analysts
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