Sample interview questions: How do you assess the creditworthiness of customers for credit facilities or trade finance?
Sample answer:
Assessing Creditworthiness of Customers
- Financial Statement Analysis:
- Review income statements, balance sheets, and cash flow statements to assess profitability, solvency, and liquidity.
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Calculate key financial ratios, such as current ratio, debt-to-equity, and interest coverage ratio.
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Industry and Company Analysis:
- Understand the industry outlook, competition, and regulatory environment.
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Analyze the company’s market position, growth potential, and financial health.
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Credit History:
- Obtain credit reports from credit bureaus to review past credit performance.
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Check for defaults, bankruptcies, or other adverse credit events.
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Trade References:
- Contact the customer’s suppliers or other businesses that have extended credit to them.
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Inquire about payment history, credit limits, and any concerns regarding the customer’s financial stability.
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Collateral Assessment:
- If collateral is offered as security for credit, evaluate its value, marketability, and enfor… Read full answer