FIN368: Chapter 3 - Credit Analysis

Which the following below refers the main components of loan structure is TRUE?

• purpose, terms, repayment, monitoring & controlling

• purpose, amount, tenor, repayment, & collateral

• purpose, services, loan covenant, terms, & collateral

• purpose, amount, controlling, creditworthiness, & repayment

Financial statement providing the data related to profit and loss statement, cash flow statement, financial position statement and other related financial documents usually used in credit analysis. Which of the component below is suitable to explained about the instruments above?

• Qualitative analysis

• Fact analysis

• Quantitative analysis

• Management analysis

____________ is the amount of time given to repay a loan.

• Amount

• Tenure

• Collateral

• Availability

Credit analysis is a process of determining the loan applicant’s capability towards on repayment of credit granted by the bank officer and forecasting _____________ to ensure the survival of the banking and financial institutions in the market.

• current development

• business development

• future development

• market development

As ABC Company is waiting for the approval of their loan request, the lender went to visit their company to inspect their businesses. Which of the following stages of credit analysis is suitable in the circumstances?

• Collecting and analyzing the information about the loan applicant.

• Assessing the credit risk.

• Checking the reliability of the information provided by the loan applicant

• Taking a decision and setting the credit terms

The loan structure of credit analysis includes a guarantor.

• True

• False

The qualitative analysis includes checking the nature of products.

• True

• False

The last stage in credit analysis required the applicant to provide the annual financial report on the current and past accounting periods and other accounting documents which it finds necessary.

• True

• False

Credit analysis is a main part of credit management process for decision making and loan structure.

• True

• False

Qualitative analysis is the description of business, ownership and management, and industry analysis.

• True

• False