Credit Risk Modeling For Beginners

Learn the methodologies of credit risk modelling for the IT sector and how it is important for IT firms

What you'll learn

This course covers important concepts including financial statement derivations, AltzMan Z Score Model

Learn Mertons Model, Working Capital analysis, and UFCE modeling

Users will also get to learn Way Out Analysis for IT firms, Evaluation Metric and how to give a final recommendation based on the overall analysis

Learn UFCE Modelling, Working Capital Analysis and Financial Statement Analysis

Requirements

Basic knowledge of finance & accounting

Description

Credit risk infers the possibility of a loss emerging from a borrower’s downfall to pay back a loan or meet contractual commitments. Conventionally, it pertains to the risk arising from lenders’ inability to return the owed interest and principal, impacting the cash flows and increasing assemblage costs.When any lender extends loans such as mortgages, credit cards, or other similar loans, there is an avoidable risk that the borrower will not repay the loan amounts. Furthermore, if a company offers such credit to the customer, there’s the same risk that the customer will not pay back. It also incorporates other related risks, such as that the bond issuer may not make payment at the time of maturity and the risk occurring out of the incapacity of the insurance company to compensate for the claim. A higher level of credit risk in a profitable market will correlate with the elevated borrowing cost. Because of this, it is evaluated technically to mitigate such risk to a certain level.This online course explains the methodologies of credit risk modelling for the IT sector and how it is important for IT firms. This course covers important concepts including financial statement derivations, AltzMan Z Score Model, Mertons Model, Working Capital analysis, and UFCE modeling. Users will also get to learn Way Out Analysis for IT firms, Evaluation Metric and how to give a final recommendation based on the overall analysis.We will start with a brief introduction to measures of credit risk modeling. Understanding the credit risk and how it is being measured is important before we into the meat of the module. Then, we will talk about traditional credit models in length. And in the next section, we will give you practical examples of traditional credit models. In the same section, we will also talk about the structural model of credit risk. Since understanding the theory isn’t enough, we will also take an example of the structural model of credit risk. Next, we will teach you Altman Z-score. In this section, you will learn about Altman Z-score and how you can calculate the Z-score. Then, we will talk about the Z-score of the airline industry. And then, we will also take a practical example of the US airline industry and discuss the airline industry Z-score. Then, under the same section, we will talk about the credit rating description of the airlines. Now, we will directly go into credit analysis. Under credit analysis, you will learn credit modeling, the evaluation metric in credit modeling, and also the early warning checklist in credit modeling. Then, we will teach you UFCE and WC Credit Modeling. Next, we will look at the financial statement analysis (the income statement, the balance sheet, the cash flow statement) in detail. Finally, we will talk about ways out analysis and internal ratings. In the end, we will show you the reference files to end the module. You need to keep in mind that this training will work if you do the work.

Overview

Section 1: Introduction

Lecture 1 Introduction to Course

Section 2: Financial Statement Derivation of Company A

Lecture 2 Company A Statement Part 1

Lecture 3 Company A Statement Part 2

Lecture 4 Company A Statement Part 3

Lecture 5 Company A Balance Sheet

Lecture 6 Company A Balance Sheet Continue

Lecture 7 Cash Flow Statement of Company A

Section 3: Financial Statement Derivation of Company B

Lecture 8 Company B Statement

Lecture 9 Company B Balance Sheet

Lecture 10 Cash Flow Statement of Company B

Section 4: Altman Z score model

Lecture 11 Altman Z Score Model Part 1

Lecture 12 Altman Z Score Model Part 2

Lecture 13 Altman Z Score Model Part 3

Lecture 14 Altman Z Score Model Part 4

Section 5: Structured or Merton's Model

Lecture 15 Merton's Model Explanation

Lecture 16 Company A Merton's Model

Lecture 17 Company B Merton's Model

Lecture 18 Prices of Company A and B

Lecture 19 Cumulative Credit Analysis

Section 6: UFCE Modelling

Lecture 20 UFCE Modelling Part 1

Lecture 21 UFCE Modelling Part 2

Lecture 22 UFCE Modelling Part 3

Lecture 23 UFCE Modelling Part 4

Section 7: Working Capital Analysis

Lecture 24 Company A Working Capital Analysis

Lecture 25 Company A Working Capital Analysis Continue

Lecture 26 Company B Working Capital Analysis

Section 8: Financial Statement Analysis

Lecture 27 Company A Financial Statement Analysis Part 1

Lecture 28 Company A Financial Statement Analysis Part 2

Lecture 29 Company A Financial Statement Analysis Part 3

Lecture 30 Company B Financial Statement Analysis

Lecture 31 Company B Financial Statement Analysis Continue

Section 9: Evaluation Metric

Lecture 32 Evaluation Metric Part 1

Lecture 33 Evaluation Metric Part 2

Lecture 34 Evaluation Metric Part 3

Section 10: Way out Analysis

Lecture 35 Way Out Analysis

Lecture 36 Way Out Analysis Continue

Lecture 37 Internal Rating Analysis

Section 11: Final Recommendation

Lecture 38 Final Recommendation

Lecture 39 Final Recommendation Continue

Finance & Accounting Students: If you’re finance/accounting students, you can do this credit risk modeling course to learn a great skill well-in-advance. This course will help you learn the nitty-gritty of credit risk and it may help a great deal in finding out a job or do a consultation shortly.,Finance professionals: If you’re a financial analyst or an investment banker, this course would be invaluable to you. This course will teach you how to create a complex credit risk model and how to assess it. Go ahead and do this credit risk modeling course and you would realize that these 3 hours are the best investment in your career.