Sample interview questions: Can you explain your approach to evaluating a borrower’s growth potential and expansion plans?
Sample answer:
Evaluating Borrower’s Growth Potential and Expansion Plans
As a Credit Analyst, I follow a comprehensive approach to assess a borrower’s growth potential and expansion plans:
1. Historical Performance Analysis:
- Review financial statements and industry data to identify trends in revenue, profitability, and market share.
- Assess the company’s ability to generate organic growth and sustain profitability over time.
2. Industry Outlook and Market Analysis:
- Research industry dynamics, including market size, growth projections, and competitive landscape.
- Determine the borrower’s competitive advantages and potential risks within the industry.
3. Expansion Plans Assessment:
- Critically evaluate the borrower’s expansion plans, including market entry strategies, product/service diversification, and geographic expansion.
- Assess the potential impact of expansion on revenue, profitability, and cash flow.
4. Management Team Assessment:
- Evaluate the experience, track record, and capabilities of the management team to execute growth plans successfully.
- Determine if the team has the necessary expertise, vision, and commitment to drive growth.
5. Financial Projections Modeling:
- Review and analyze financial projections provided by the borrower, including revenue, expe… Read full answer