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Pidilite Industries: Assessing Credit Quality
內容大綱
In mid-2015, a credit analyst with a leading investment company was tasked with assessing the overall credit quality of a chemical company that equity analysts had recommended as a long-term investment for his firm’s insurance equity fund. The analyst set out to use various financial parameters—liquidity, working capital, profitability, efficiency, capital structure, and debt servicing. He believed that a fair assessment of credit quality could help capture a firm’s financial health in its entirety, and had a lot to consider as he began his analysis. The case illustrates best practices for credit analysts in assessing a target company’s overall financial risk profile using the company’s publicly available audited financial statements.
學習目標
This case is designed for use in MBA-level courses on credit analysis or advanced accounting, or in banking courses. It promotes discussion of the framework and key components for sound credit analysis in assessing a company’s overall financial risk profile. After completing the case, students should be able to<br><ul><li>understand the relevance and framework for undertaking credit quality analysis;</li><li>discuss the financial parameters for evaluating a company’s credit quality and overall financial risk profile;</li><li>understand and estimate various financial credit ratios;</li><li>develop insight into a company’s financial health based on a trend analysis of financial credit ratios; and</li><li>estimate the overall credit quality of a target company.</li><li>