Without a credit event, such as a new loan or debt transaction, there is no need to complete credit analysis of a company. Therefore, the primary reason to complete credit analysis must be to analyze or monitor a loan or debt transaction. As an aspiring or new analyst or associate, there is temptation to focus primarily on company analysis. Make no mistake, understanding the company is critical – which hopefully was made clear in lessons 1 and 2. However, it is quite common for new analysts and associates to focus primarily on the company’s financial analysis, and not review the details regarding the structure of the loan.
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