Financial Products & Associated Risk Management

Credit Analysis - Part 2


This eCourse consists of two modules. Module 1 describes balance sheet structures in detail and provides an introduction to the key measures – such as the debt/equity ratio and various liquidity ratios – that can be derived from balance sheet values. Further commentary on other aspects of balance sheet accounting, such as consolidated accounts and off-balance sheet items, is also provided.

Module 2 describes in detail the structure and elements of an income statement and introduces various income/profit measures, such as gross and net income/profit, and profitability ratios, such as gross and net margins, that can be derived from income statement values. The module also covers measures such as earnings per share, dividend payout ratios, and dividend cover. A good understanding of all these measures, and related accounting policies and practices, will help credit analysts and others to understand a company’s profitability/earnings, as well as the key drivers and sustainability of this profitability/earnings.


On completion of this course, you will be able to:
- List the main types of assets and liabilities that appear on a balance sheet Calculate the key measures and ratios that can be derived from balance sheet values
- Recognize the typical adjustments made when accounts are consolidated or merged for groups or acquisitions, and the differences between contingent liabilities and off-balance sheet items
- Identify the main types of revenue and expense items that appear on an income statement
- Calculate the key earnings/profitability measures and ratios that can be derived from income statement values


Module 1: Credit Analysis – Balance Sheet Analysis
Topic 1: Balance Sheet Structure
Topic 2: Balance Sheet Analysis
Topic 3: Other Balance Sheet Considerations

Module 2: Credit Analysis – Income Statement Analysis
Topic 1: Income Statement Structure
Topic 2: Earnings/Profitability Analysis


Relevant Subject
Type 10 - Providing credit rating services
SFC:2.00, PWMA:2.00
Staff of Corporate Member: HK$610
Non-Member: HK$890
All Member: HK$610