Advanced Credit Risk Modeling - IT Sector

Overview

This course equips learners with the analytical tools and modeling techniques necessary to assess, interpret, and manage corporate credit risk. Using real-world financial data from two companies, participants will explore the complete credit risk lifecycle—from fundamental financial statement analysis to advanced structural and market-based models such as the Altman Z-Score and Merton’s Model. Learners will develop the ability to calculate unlevered free cash flow (UFCE), assess working capital movements, and compare financial profiles using key evaluation metrics. Through this structured approach, participants will be able to synthesize financial findings, assign internal ratings, formulate risk-adjusted exit strategies, and present well-supported credit recommendations. The course emphasizes critical thinking and decision-making using Bloom’s Taxonomy levels including analyze, evaluate, and formulate, fostering applied proficiency in credit risk assessment and recommendation development.

Syllabus

Financial Statement Analysis for Credit Risk

This module introduces foundational techniques in analyzing a company’s financial statements to assess credit risk, focusing on Company A's income statement, balance sheet, and cash flow.

Company B Financial Insights

This module builds comparative insight by evaluating Company B's financial structure and applying the Altman Z-Score model to assess bankruptcy risk.

Structural Credit Risk Models

This module explores market-based credit risk modeling, introducing the Merton Model and key risk indicators derived from market data.

UFCE and Working Capital Modeling

This module focuses on the calculation and interpretation of unlevered free cash flow to equity (UFCE) and working capital metrics for evaluating operational sustainability.

Financial Statement-Based Analysis

This module provides a deep dive into multi-year financial analysis for Companies A and B and introduces evaluation metrics for comparative credit risk profiling.

Risk Interpretation and Recommendation

This final module consolidates financial analysis into actionable credit recommendations by assessing internal ratings, setting exit strategies, and making final judgments.