At the time the bank offers loans to corporate customers, banks must consider the firm’s ability to repay the loan. Traditional approaches focus on the analysis of the company’s financial performance. This is called credit analysis. The technique used in credit analysis from techniques for analyzing stocks that is generally done by the investment management industry. The use of financial ratio analysis (analysis of financial ratios) sebaagi basis to develop a model for making lending decisions, it is very commonly used.

Corporate credit analysis usually focuses on financial data 3 last year. Results of the analysis will be further examined to see the trend of future performance (better or worse) are useful in making lending decisions.

Elements that are important in conducting financial analysis is the company’s financial statements, namely:

  • Balance (balance sheet)
  • Statement of income (profit and loss account / income statement)
  • Consolidated cash flow (cash flow statement)
  • Consolidated taxes (tax statement)

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