Research Talent Training Programme: Module 1
Essentials of Credit Risk Analysis
Course Date: 21 June Friday (7pm to 10pm) and 22 June Saturday (10am to 5pm)
SkillsFuture credit can be used for this course. Please click here for more information.
With effect from 19 May 2017, SkillsFuture Singapore will revise the SkillsFuture Credit claims processes. All SkillsFuture Credit payments by SkillsFuture Singapore will be made to training providers instead of individuals.
Please submit your claim via the SkillsFuture website first if you wish to use your SkillsFuture credit.
The Research Talent Training Programme is designed to equip participants with the necessary knowledge and skill sets to evaluate companies and develop investment theses and analyses. Please click here for the programme brochure.
Credit risk refers to the probability a borrower fails to make payment on any type of debt. Credit risk analysis considers factors such as sources of cashflows, business risk and capital structure to provide an understanding of the company’s ability to repay its obligations. This module covers practical examples to illustrate key concepts of credit risk analysis and provides the foundation required for Module 2 (Equities Analysis Workshop: A Practical Approach to Modelling and Valuation).
At the end of this module, participants will:
- Acquire skills required to evaluate credit risk of a company
- Identify early warning signals of deteriorating credit quality
- Understand key common accounting techniques used by companies to inflate assets and reported revenues
Business model analysis*
- Asset conversion cycle
- How cash is generated by the firm
- Critical success factors and risk mitigation
- Inherent industry, business and financial risks
- Reasons for business failure
Industry risk analysis*
- Structure of the industry, demand and supply
- Profitability and cost structure
- Competition and regulatory environment
- SWOT analysis (Strengths, Weaknesses, Opportunities and Threats)
Business performance of the company
- Key revenue, profitability and costs drivers
- Understanding the different performance and financial ratios
Financial statement analysis
- Balance Sheet, Income and Cashflow Statements analysis
- Review of key common negative accounting techniques
- Common contingent liabilities
Cashflow and liquidity risk analysis
- Generation and utilisation of cashflow
- Quality and strength of operating cashflow
- Early warning signs of cashflow crunch
- Debt maturity profile and refinancing risk
- Sources of liquidity for the company
Capital structure and debt servicing capability
- Sources of funding, funding risk and sustainability
- Interest and debt repayment evaluation
- Debt servicing ratios
Financial risk analysis
- Credit risk, interest rate risk, FX risk, commodity risk
Overview of interest rate and FX risk management tools
- Interest rate swap, interest rate cap, FX forward, FX option, cross-currency interest rate swap
- Discounted cashflow valuation method
- Other valuation methods: Price / Book Value ratio, Price / Earnings ratio, Dividend Yield, Earning Yield
*For these sessions in this module, participants are expected to do pre-reading of study materials and perform online research prior to commencement of class. Key learning points will be discussed and reviewed during the class.
Yew Jyu Lan, CFA holds 3 Master degrees: Master of Social Science (Real Estate) and a Master of Social Science (Applied Economics) from the National University of Singapore (NUS), and an MBA (Finance) with distinction from New York University. She also holds a Bachelor of Science (Mathematics) from NUS.
With more than 24 years of banking experience at major foreign and local banks covering interest rate risk management for corporates, asset securitization, corporate and real estate lending, infrastructure project financing, asset and liability management, distressed debt management and restructuring, Jyu Lan has extensive experience to share. In her last held position, Jyu Lan was a Senior Director with United Overseas Bank, leading a team of Interest Rate Derivative Product Specialists to assist a wide range of corporates in interest rate risk management in the Global Markets Corporate Sales and Advisory department.
With effect from January 2016, Singaporeans aged 25 years and above who received their SkillsFuture Credit account activation letter will be eligible for an initial credit of $500 which can be used to pay for course fees for a range of eligible courses. SkillsFuture credits can be used for this course.
For more information, please refer to SkillsFuture website.
IBF Financial Training Scheme
The Financial Training Scheme (“FTS”) provides funding for financial sector-specific training programmes which are recognized under FTS. This scheme is only eligible for company-sponsored participants who are Singapore Citizens or Singapore Permanent Residents, physically based in Singapore, and who have successfully completed a FTS programme. Financial Institutions (MAS licensed or exempt entities), involved in or supporting financial sector activities, are eligible to submit claims for company-sponsored participants.
For all FTS programmes commencing on or after 1 July 2016, Singapore Citizens aged 40 years old and above will be eligible for 90% co-funding of direct training costs, subject to existing grant caps of S$2,000 per programme. Singapore Permanent Residents and Singapore Citizens below 40 years old will continue to be eligible for 50% co-funding of direct training costs for FTS programmes.
For more information, please refer to IBF website.
For further enquiries, please email firstname.lastname@example.org or call 6327-5438
(Operating Hours: 9.00am to 5.00pm)
Terms and Conditions:
Singapore Exchange reserves the right to make changes to the time, date, syllabus, speakers, venue or cancel the course if warranted by circumstances beyond its control.