Credit Analysis

Credit Analysis is the process of determining the ability of a company or a person to repay their debt obligations. Having a crucial function in the debt capital markets, efficiently allocating capital by properly assessing credit risk, pricing, and repricing it as risks change. Incorporating both quantitative and qualitative factors such as amounts owed, character, and capacity to make payments, Credit Analysis has been used by companies who issue bonds and stocks, as well as for individuals who take out loans. It seeks to identify the appropriate level of risk associated with investing, and its outcome will determine what risk rating to assign the debt issue or borrower.