Week 42 (3.2.08)

Learn

From perspective of Lenders or creditors (banks, investors in corporate bonds, trade creditors)

Credit analysis also involves the use of fundamental analysis. The primary focus here is not about making investment profits, but about ensuring the security the capital and the ability of the borrowing company to service the debt.

• Evaluating whether to extend funds to corporations, and whether a credit period should be allowed by trade creditors;
• Monitoring changes in the creditworthiness of companies and the security of capital; and
• Assessing compliance with debt covenants

Unlearn

New informations and learning. Nothing unlearn.

Relearn

I imagine if i set up a company:

• When paying back the debt on loan, first is to pay the bank loan, subsequently pay the tax and finally only pay the dividend to my shareholders.
• This is in line with the primary focus of bankers which is to ensure the security of capital and ability of borrowing company to service the debt.