| Effective Term: | 2024/20 |
| Institute / School : | Institute of Innovation, Science & Sustainability |
| Unit Title: | Digital Finance: Credit Analysis |
| Unit ID: | HENAG1102 |
| Credit Points: | 15.00 |
| Prerequisite(s): | Nil |
| Co-requisite(s): | Nil |
| Exclusion(s): | Nil |
| ASCED: | 081101 |
| Other Change: | |
| Brief description of the Unit |
This project aims to prepare learners to excel in ‘Credit Analyst’ roles in banks, Non-Banking Financial Companies (NBFCs) and new digital finance companies. Team projects will be based on assessing the debt/loan funding requirements of a company for new capital expenditure. Working in teams of 4-5, learners will do an in-depth analysis of the sector and the individual company’s financial performance (solvency, profitability and liquidity), assess project cash flows, and arrive at a loan decision and pricing, based on the appropriate credit policy and guidelines. |
| Grade Scheme: | Ungraded (S, UN) |
| Work Experience Indicator: |
| No work experience |
| Placement Component: | |
| Supplementary Assessment:No |
| Supplementary assessment is not available to students who gain a fail in this Unit. |
| Course Level: |
| Level of Unit in Course | AQF Level(s) of Course | | 5 | 6 | 7 | 8 | 9 | 10 | | Introductory | | |  | | | | | Intermediate | | | | | | | | Advanced | | | | | | |
|
| Learning Outcomes: |
| Knowledge: |
| K1. | Understand how to calculate and analyse sector benchmark KPIs for liquidity, profitability and solvency from financial statements and reports. |
|
| K2. | Understand how a company's KPIs for liquidity, profitability and solvency are determined. |
|
| K3. | Understand how a comparison summary is done for company's performance versus sector performance. |
|
| Skills: |
| S1. | Interpret a company's financial statements. |
|
| S2. | Interpret financial statements of a company's major peers and other published sectoral reports. |
|
| S3. | Interact effectively with the respective client account manager for any additional information or documents. |
|
| S4. | Work effectively in a team. |
|
| Application of knowledge and skills: |
| A1. | Undertake in-depth analysis of a company's financial performance on liquidity, profitability and solvency. |
|
| A2. | Evaluate the forecasted cash flows of a project that needs funding. |
|
| A3. | Apply capital budgeting decision criteria on cashflows to determine whether a project is financially viable. |
|
| A4. | Make recommendations about borrowers’ credit ratings, quality of loan collaterals, the credit limit and credit covenants for a company project. |
|
| A5. | Create and complete the credit file with interest recommendations for internal approvals as per company policy. |
|
| Other outcomes: |
| Unit Content: |
•Sprint 1 (2 Weeks) In-depth study and analysis of the given sector; analysis of sector peers; calculation of sector benchmark financial KPIs; make a group presentation.
•Sprint 2 (2 Weeks) Detailed analysis and research of a given Company's financial performance for liquidity, profitability, and solvency; undertake a comparison with sector KPI benchmarks; make a group presentation.
•Sprint 3 (2 Weeks) Project financial feasibility study; cash flow evaluation; build Excel spreadsheet models; make a group presentation.
•Sprint 4 (2 Weeks) Application of capital budgeting decision criteria on project cash flows; build Excel models for NPV, and IRR; prepare feasibility report with conclusion on project viability; present in groups.
•Sprint 5 (2 Weeks) Study and assess solvency ratings by various external credit rating agencies, assess internal credit ratings of the Company and the peers’ ratings; make a brief group presentation.
•Sprint 6 (2 Weeks) Assess loan classification - secured or unsecured, property mortgage/collateral values; comment on credit pricing/cost of borrowing with justifications; present the same in groups. |
| Graduate Attributes: |
| | Learning Outcomes Assessed | Assessment Tasks | Assessment Type | Weighting | Professional Standards |
| 1. |
K1 S1-4 A1 |
Company and Industry analysis |
Team report and presentation |
N/A |
|
| 2. |
K1 S1-4 A1 |
Company performance analysis against industry benchmarks |
Team report and presentation |
N/A |
|
| 3. |
K2 S1-3 A2 A3 |
Prepare project feasibility study and cash flow evaluation study |
Team report and presentation |
N/A |
|
| 4. |
K2 S1-4 A2 A3 |
Apply capital budgeting decisions on project cash flows and projections (using Excel modelling) |
Team report and presentation |
N/A |
|
| 5. |
K3 S1-4 A4 A5 |
Assess solvency ratings, internal credit ratings and peers’ ratings |
Team report and presentation |
N/A |
|
| 6. |
K3 S1-4 A4 A5 |
Credit decision-making and rationale presentation based on organization policies |
Team report and presentation |
N/A |
|
|