Credit Analyst Interview Questions and Answers

Credit Analyst Interview Questions and Answers

Credit analysis is the method by which one calculates the creditworthiness of a business or agency. In other words, it is the evaluation of the capability of a company to honor its economic obligations. The audited financial statements of a large company might be analyzed when it issues or has issued bonds. Or, a bank may analyze the financial statements of a small business before making or renewing a commercial loan. The term refers to either case, whether the business is large or small.

Credit analysis involves a wide variety of financial analysis techniques, including ratio and trend analysis as well as the creation of projections and a detailed analysis of cash flows. Credit analysis also includes an examination of collateral and other sources of repayment as well as credit history and management ability. Analysts attempt to predict the probability that a borrower will default on its debts, and also the severity of losses in the event of default. Credit spreads—the difference in interest rates between theoretically “risk-free” investments such as U.S. treasuries or LIBOR and investments that carry some risk of default—reflect credit analysis by financial market participants.

What is Credit Analysis?

What Does a Credit Analyst Do?

What is the objective of credit analysis?

Can you define term Usury?

Can you define cost of debt?

Can you explain 5C's in Credit Analysis?

Can you define credit rating?

What are the benefits of credit ratings?

Can you explain ILOC (Irrevocable Letter Of Credit)?

Can you define adjustment credit?

Can you define interest coverage ratio?

What do the credit rating agencies do?

Can you define Free Cash Flow?

Can you define Credit-Netting?

What type of person makes a good credit analyst?

How do you calculate the terminal value in a DCF valuation?

Explain the difference between bank guarantee and letter of credit?

Can you define Credit Default Swap?

Can you explain Good Debt-to-Equity Ratio?

What steps and processes to follow for considering credit to a customer?

Can you explain Line of credit?

Can you define Credit Check?

How about programming experience? Do you have technical expertise?

What is credit analyst role of interpersonal and communication skills in his career?

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