The Credit Analyst
With credit playing a key role in recent levered acquisitions, now is the time to get clued up on debt.
In this credit analyst course, ex-J.P. Morgan investment banker, Chris Cordone, will teach you everything you need to know to succeed at credit analysis.
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3000+ students enrolled
37
Hours
26
Topics
212
Practical exercises
4
Exams
The Credit Analyst includes
- How banks make money
- The credit perspective
- How bad loans affect banks
- Intro to the credit process
- The 5 Cs of credit
- Quantifying credit risk
- Default risk
- Loss given default risk
- The components of the credit memo
- Determining the risk in lending for various purposes
- Using pricing and fees to mitigate risk and drive the bank’s return
- The role of covenants in monitoring the loan
- How banks minimize risk by selling off pieces of the loan
- Using seniority, security, collateral and guarantees to protect the loan
- How banks minimize risk by selling off pieces of the loan
- Understanding business risk (macro, industry, and company)
- A closer look at company risk
- Management risk
- Estimating business risk
- Determining on and off-balance sheet obligations
- Assessing the quality and efficiency of a company’s assets
- How to calculate EBIT and EBITDA for credit analysis
- How OWC can impact a company’s cash flow
- Assessing cash flow adequacy
- Measuring a companies ability to withstand fluctuations
- Liquidity definition and calculations
- Determining how much room a company has to borrow additional funds
- Analyzing a company’s cash flow to determine borrowing capacity
- Using base case, upside, and downside scenarios to determine debt capacity
- Using cash flow analysis to determine the timings of a loan repayment
- Extending debt capacity using cash flows from later years in the forecast
- Modeling credit scenarios
- -Business Risk – Using descriptive materials provided, simulated 10-k snippets, press releases, etc
- Financial Risk (current financial position, quality of earnings, cash flow, liquidity)
- Discussion of Smithy’s corporate structure and structural subordination issues
- Debt Capacity (cash flow forecasts, debt service coverage ratio DSCR, building scenarios)
- Use examples from real world cases to demonstrate the purpose of a 13-week cash flow (True Apparel Inc. and/or Shiloh Industries)
- Analysis of current trends in case company (identifying areas of weakness, sources of immediate liquidity/cost savings and more)
- Ramifications of distress (covenants, restructuring, bankruptcy and more)
- Breaking down operating and non-operating expenses
- Deep dive on OWC, including the cash flows within AR, AP and Inventory
- Forecasting non-operating revenues expenses (assets sales, etc.)
- Adding interest and debt service
- Determining borrowing need/repayment ability
- Reconciling cash flows to EBITDA and more!
- Industry and company analysis
- Using cash flows to determine debt capacity
- Approaches to a fire sale valuation
- Liquidating assets
- Senior versus junior debt
- First lien vs second lien debt
- The purpose and different types of accounting (financial versus management accounting)
- Users of financial statements
- Introduction to the three main financial statements and explanation of key elements
- Overview of the contents of financial reports
- Introduction to accounting standards
- The accounting equation
- Explanation of accrual accounting, the matching principle, and capitalization
- Making entries and ensuring the balance sheet balances
- Preparing a balance sheet
- Preparing an income statement from the entries to retained earnings
- Preparing a cash flow statement from the entries to the cash account
- A review of the different categorizations on the income statement, balance sheet, and the cash flow statement
- Revenue recognition issues
- Cost recognition issues
- Identifying non-recurring items from the income statement, the MD&A, the notes to the accounts and the financial statement press release
- Calculating EBIT and EBITDA for the historical year, and on an LTM basis
- Basic EPS calculations including weighted average shares
- Dilutive securities: options (treasury method) and convertibles (as if converted)
- Calculating recurring EPS
- Inventory accounting including the impact on EBIT of LIFO and FIFO accounting choices (where relevant)
- Accounts receivable and bad debts (identifying when companies are manipulating sales)
- Accounts payable and accruals and the difference between them from a due diligence perspective
- Other items including taxes payable, deferred revenue, and pre-paid items
- Working capital and operating working capital and the cash impact of changes in operating working capital
- Credit implications of working capital movements
- Day ratios
- Gross PP&E, accumulated depreciation, depreciation expense and net PP&E
- Building a simple forecast of fixed assets
- Establishing the age of a company’s fixed asset base
- Finite, and infinite intangibles including goodwill
- A review of key methods of accounting for financial investments
- At fair value through the income statement
- Available for sale
- Associate (equity method) accounting
- Debt issues and repurchases
- Simple yield to maturity and all in cost calculations and understanding Original Issuer Discounts
- Calculating net debt
- Equity issuance and repurchases
- The difference between authorized, issued and outstanding shares and multiple share classes
- Other capital items: preference shares and convertible bonds
- Leverage ratios
- Debt liability maturity analysis
- Profitability ratios, including margins
- Liquidity ratios, including operating working capital
- EBIT and EBITDA for the historical year, and on an LTM basis
- Leverage ratios, including net debt and interest coverage
Asset ratios - Understanding how to categorize cash flows between operating, investing, and financing
- Deriving a cash flow statement from two balance sheets and an income statement
- Deriving a balance sheet from a cash flow statement and an income statement
- Different cash flow statement presentations
- What are equity method investments?
- Equity affiliates/associates
- Joint ventures
- Equity method accounting
- Income statement
- Balance sheet
- Cash flow statement
- Financial statement integration
- M&A accounting overview
- Balance sheet consolidation
- Sources and uses of funds
- Goodwill calculation
- Income statement consolidation
- Non controlling interests – NCI
- Key settings
- Formatting and layout standards
- Building a simple income statement and balance sheet model, on one sheet, then across sheets
- Balancing the balance sheet using the cash flow statement
- Preparing the model for handover
- Key formatting and putting the output into a pitch book
- Income statement construction and highlighting key numbers
- Calculation schedules (PP&E, retained earnings, operating working capital, and debt)
- Balancing the balance sheet with a cash sweep
- Calculating interest using average balances
- Circular references and iterations
- Working with a circular reference switch
- Preparing the model for handover
- Key formatting and putting the output into a pitch book
- Steps before editing
- Inserting a new item
- Removing an old item
- After editing
- Relevant keyboard shortcut keys
- Cleaning up the income statement and balance sheet and simplifying the line items
- Getting estimates for revenues and EBIT
- Building multiple scenarios into a model’s assumption
- Modeling a forecast debt repayment schedule from the notes
- Key ratios
- Checking the model for reasonableness
- Formatting and putting the output into a pitch book
- Why banks want to be repaid early
- Cash sweep mechanisms
- How to model cash sweeps
- Building a three statement model with a cash sweep
- Top ten errors
- Auditing and error checking toolkit
- Checking your own model
- Checking someone else’s model
The Credit Analyst
| Micro-Degree
Credit Analysis for Lenders
4
Hours
5
Topics
18
Practical exercises
1
Exam
Build a comprehensive understanding of the credit process undertaken by the lenders of a loan. Examine the different risks involved against the loan, the tools used to mitigate these risks, and how to analyze a borrower’s ability to meet future obligations. The knowledge and skills developed can be applied directly to any credit analyst role.
Credit Risk Overview
17 video minutes
0 excel exercises
Video minutes 17
Excel Exercises 0
Controlling Credit Risk
39 video minutes
3 excel exercises
Video minutes 39
Excel Exercises 3
Business Risk
10 video minutes
0 excel exercises
Video minutes 10
Excel Exercises 0
Financial Risk
48 video minutes
4 excel exercises
Video minutes 48
Excel Exercises 4
Debt Capacity
36 video minutes
6 excel exercises
Video minutes 36
Excel Exercises 6
Credit Analysis Case in Point
37 video minutes
5 excel exercises
Video minutes 37
Excel Exercises 5
13 Week Cash Flow Modeling and Analysis
3
Hour
17
Practical exercises
1
Exam
Learn how to identify scenarios where companies can get into cash flow trouble and build a 13-week cash flow model for a real company that filed for bankruptcy.
13 Week Cash Flow Modeling Scenarios
62 video minutes
3 excel exercises
Video minutes 62
Excel Exercises 3
Building a 13 Week Cash Flow Model
127 video minutes
14 excel exercises
Video minutes 127
Excel Exercises 14
Distressed Debt Restructuring
1
Hour
6
Practical exercises
Master the process of restructuring debt and valuing a company on the brink of bankruptcy using industry and company analysis. Learn how to use cash flows to determine debt capacity, discover the approaches to a fire sale valuation, and more.
Distressed Debt Restructuring
57 video minutes
6 excel exercises
Video minutes 57
Excel Exercises 6
The Accountant
13
Hours
11
Topics
100
Practical exercises
1
Exam
Quickly and confidently interpret financial data and statements, evaluate them and use the calculated information to build high-quality reports. Real company data and the latest rules are covered to ensure the methods used and skills developed are immediately applicable in the workplace.
Accounting Foundations
72 video minutes
0 excel exercises
Video minutes 72
Excel Exercises 0
Financial Accounting Review
34 video minutes
3 excel exercises
Video minutes 34
Excel Exercises 3
Income Statements
61 video minutes
15 excel exercises
Video minutes 61
Excel Exercises 15
Earnings Per Share
27 video minutes
11 excel exercises
Video minutes 27
Excel Exercises 11
Working Capital
56 video minutes
12 excel exercises
Video minutes 56
Excel Exercises 12
Non-Current Assets
39 video minutes
11 excel exercises
Video minutes 39
Excel Exercises 11
Capital Structure
50 video minutes
14 excel exercises
Video minutes 50
Excel Exercises 14
Accounting Ratios
41 video minutes
5 excel exercises
Video minutes 41
Excel Exercises 5
Cash Flow Statements
25 video minutes
3 excel exercises
Video minutes 25
Excel Exercises 3
Equity Method Investments
9 video minutes
5 excel exercises
Video minutes 9
Excel Exercises 5
Intro to Full Consolidation
68 video minutes
21 excel exercises
Video minutes 68
Excel Exercises 21
The Modeler
12
Hours
6
Topics
71
Practical exercises
1
Exam
Financial modeling is one of the most useful skills in the world of finance. Knowing how to build models quickly and error-free is critical for the decisions and recommendations that they underpin. Our online financial modeling course provides the perfect introduction to building models, developing multiple techniques for a comprehensive and practical understanding of the topic.
Introduction to Modeling
55 video minutes
13 excel exercises
Video minutes 55
Excel Exercises 13
Three Statement Modeling with Iterations
77 video minutes
10 excel exercises
Video minutes 77
Excel Exercises 10
Three Statement Model Editing
44 video minutes
6 excel exercises
Video minutes 44
Excel Exercises 6
Three Statement Model With Estimates
70 video minutes
12 excel exercises
Video minutes 70
Excel Exercises 12
Building a Model with Cash Sweep
71 video minutes
19 excel exercises
Video minutes 71
Excel Exercises 19
Checking a Model for Integrity and Errors
36 video minutes
11 excel exercises
Video minutes 36
Excel Exercises 11
Skills & Learning Objectives in The Credit Analyst Micro-Degree
Learn from our expert instructors
Learn more about our full facultyReviewed by Industry Experts
Colin Evans
Managing Director at J.P. Morgan
Colin Evans is a Managing Director at J.P Morgan and leads the financial institutions coverage team globally for the Corporate Banking.
Dr. Bridget Lyons
Professor of Finance
Professor of Finance at the Jack Welch College of Business at Sacred Heart University and Associate Instructor.
Chris Bishko
CFO
CFO with over 25 years experience as an operator, investor and investment banker in technology and financial services.
Wall Street Recognized Certification
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Complete a Micro‑degree to join our exclusive alumni
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