Financial risk analysis can be described as both an Art and a Science. Ratio calculations and various number crunching exercises represent the Science. The Art is the actual interpretation and decision-making process whereby all types of company information are reviewed and based on the analyst?s thorough review, past experiences and overall industry knowledge. Then a decision is made. The decision may include a ?gut feel? about the risk vs. reward of doing a particular deal. This book is intended to help the reader develop the Art and Science of financial risk analysis. It will address the needs of credit analysts looking for the basics as well as those seeking a more in-depth understanding of various financial analysis techniques. The book was formatted to first step through an understanding of the basic credit concepts and then build from there. As such, topics following the basic concepts will cover Cash Flow Analysis, Profitability Analysis using the Du Pont Model, a company Break Even Analysis, the concept of Economic Value Added (EVA), a suggested approach to Bank Analysis with scoring model, and Derivatives Risk Analysis. A thorough explanation will be provided with regards to the concepts of Sustainable Growth, Credit Point Scoring Models, and Distress or Bankruptcy Default Probability Modeling using the Z Score, Bond Score, and Lambda Models. In addition, it will cover Bank Letters of Credit, Guarantees, a chapter on ?Financial Shenanigans? and Financial Warning Signs and provide an overview of various business structures such as LLC?s and Subchapter S Corporations. Chapters on how to write a Financial Analysis report and how to read financial statements from an Investor?s Viewpoint round out the discussion topics.Then a decision is made. The decision may include a ?gut feel? about the risk vs. reward of doing a particular deal. This book is intended to help the reader develop the Art and Science of financial risk analysis.
|Title||:||The Art & Science of Financial Risk Analysis|
|Author||:||Jerry F. Dean|