Description

A case study reviewing Smithy's (a fictitious glass manufacturing company) overall credit risk with a focus on its business risk, financial risk, corporate structure, and debt capacity.

Learning Objectives

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1. Analyze financial risk using current financials and the company's current financial position.
2. Evaluate the quality of earnings, cash flow, and liquidity.
3. Identify the corporate structure and subordination issues.
4. Assess debt capacity and cash flow forecasts.
5. Calculate the debt service coverage ratio (DSCR).
6. Build scenarios to evaluate overall credit risk.