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Credit Analysis Training

Credit analysis is the evaluation process used to assess the creditworthiness of borrowers, crucial for informed lending decisions and risk reduction. Key components include financial statement analysis, credit history, collateral evaluation, and management assessment. This process not only ensures compliance with regulations but also protects the financial health of lending institutions.

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Nuwan De Silva
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8 views5 pages

Credit Analysis Training

Credit analysis is the evaluation process used to assess the creditworthiness of borrowers, crucial for informed lending decisions and risk reduction. Key components include financial statement analysis, credit history, collateral evaluation, and management assessment. This process not only ensures compliance with regulations but also protects the financial health of lending institutions.

Uploaded by

Nuwan De Silva
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Credit Analysis Training

An Introduction to Credit Analysis


What is Credit Analysis?
• Credit analysis is the process of evaluating an
applicant's loan request or corporate debt
issue in order to determine the likelihood that
the borrower will live up to his/her
obligations. It involves assessing the
creditworthiness of an individual or
organization.
Importance of Credit Analysis
• 1. Helps in making informed lending decisions
• 2. Reduces the risk of default
• 3. Ensures compliance with regulatory
requirements
• 4. Protects the financial health of the lending
institution
• 5. Facilitates better customer relationship
management
Key Components of Credit Analysis
• 1. Financial Statements Analysis
• 2. Credit Score and Credit History
• 3. Collateral Evaluation
• 4. Industry and Economic Conditions
• 5. Management Assessment
Financial Statements Analysis
• 1. Balance Sheet: Provides a snapshot of a
company's financial condition at a specific
point in time.
• 2. Income Statement: Shows the company's
revenues and expenses over a period of time.
• 3. Cash Flow Statement: Highlights the cash
inflows and outflows from operating,
investing, and financing activities.

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