Fixed Income
Credit Analysis
Definition
What is Credit Analysis?
The evaluation of a borrower's ability and willingness to repay debt.
Example in practice
How This Looks in Practice
An analyst studies leverageThe use of borrowed money or derivatives to increase exposure relative to invested capital., cash flow, collateralAn asset pledged to secure repayment of an obligation., and industryA more specific group of companies with closely related products or services. conditions.
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Related Terms
Fixed Income
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.