Credit Analyst Interview Question:

Tell me how would you decide if you can lend $100 million to a company?

Submitted by: Muhammad

Review all three financial statements for the past five years and perform a financial analysis. Determine what assets can be used as collateral, how much cash flow there is, and what the trends of the business are. Then look at metrics like debt to capital, debt to EBITDA, and interest coverage. If all of these metrics are within the bank's parameters it may be possible to lend the money, but will still depend on qualitative factors as well.
Submitted by: Muhammad