This book, which explains a new, advanced technique for corporate credit analysis that focuses on analyzing a company's short-term and long-term solvency and future cash generation and repayment capacity (FLC), consists of 13 chapters in 3 parts and an appendix.
Part 1 covers the basics of credit analysis, including cash flow analysis, balance sheet analysis, and income statement analysis.
In Part 2, for a full-scale corporate credit status analysis, various risk factors of a company, such as industrial risk, operating risk, and financial risk, are analyzed using the FLC method, and methods for evaluating sales and profitability analysis, short-term/long-term solvency analysis, and asset value are analyzed, along with an analysis of the process of corporate insolvency and its causes, explained in detail and in an easy-to-understand manner through case studies.
In Part 3, in order to develop a thorough understanding of corporate credit analysis and the ability to apply it to actual work, 45 recently bankrupt or insolvent companies were analyzed as the subjects of analysis. Through an analysis of the cash flow status for four years from three years before bankruptcy to the current year, the ability to identify the signs and characteristics of each of the six stages of corporate insolvency was developed and the KSI model, a technique for analyzing insolvent companies, was introduced.
This book was written by an author who has been in charge of corporate credit analysis at a foreign financial institution for a long time. It focuses on the actual application techniques of advanced financial institutions, which are different from the conventional credit analysis methods seen so far. I am confident that this book will provide an opportunity for both beginners in credit analysis work and experienced readers in this field to learn new, cutting-edge corporate credit analysis techniques.