Credit Analysis – Detailed Course Description

1. Course Content

1. INTRODUCTION

i. Leverage

• Why is leverage important?
• Fixed & Variable Costs
• Relevant range of production

ii. Fixed and variable costs and their impact on leverage

2. BREAKEVEN AND LEVERAGE

i. Breakeven Analysis

ii. Margin of Safety

• Key Takeaway

3. FIXED COSTS AND OPERATING LEVERAGE

i. Operating Leverage

ii. Degree of Operating Leverage

iii. The downside of operating leverage

4. FINANCIAL LEVERAGE

i. Introducing Financial Leverage

ii. Degree of Financial Leverage

iii. The downside of Financial Leverage

5. COMBINING FINANCIAL AND OPERATING LEVERAGE

EXCEL Examples

No

2. Introduction

This is the first course on credit analysis that focuses on the impact of leverage on a business. We look at two different instances of leverage – one financial, one operational and use that to calculate degrees of operational leverage. Degrees of operational leverage is an interesting concept that allows you to measure the impact on earnings for every dollar increase/decrease in sales on account of the combined leverage of a firm.

3. Buy this course

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