What a Credit Analyst does within a company?

1. Credit analyst assess credit worthiness of a particular customer who approach for finance.

2. The analyst assess the customer from different point of views such as..

a) obtain credit rating from a rating agencies

b) look at the history of repayment of any old credit from banks.

c) cash flow of the company specifically free cash flow.

d) any bounced cheque the customer has in the past. This can be obtained from contacts in banks.

e) Age of the company having bank accounts with any bank.

f) Line of credit / overdraft the company has with any bank and the available limit to repay any loan.

g) Order position and margins on the orders and customer profile of the customer. This is useful to assess free cash flow.

3. The above can be assess by the credit analyst by looking at the last 3 yrs of financial reports of the company, contacting banks, rating agencies, insurance agencies etc etc.

4. Analyst has to make financial models to depicts the financial strength of the customer. 

These are few daily activities of a credit analysts, there can be many more depending upon the situation.

Credit analysis is a job that comes with lots of responsibility. Generally, a credit analyst is responsible for assessing a loan applicant's credit worthiness. Depending on the area in which a credit analyst chooses to work, these applicants could be individuals or companies

 Credit Analyst does the following based on his job description and as requested for e.g :

 

Banks and Treasury:

1-Payable Note: Reviewing on a regular basis and as required all company agreements and

      Reporting the detailed amounts as per accounting Dep. Allocation.

 

2-Ensure all balances and liquidity are valid and available to meet all liabilities and commitments 3-Ensure all parties are complying with rules and policies settled by management.

 

AR/AP :

 

1-      Reviewing all suppliers and customers accounts and ensure all terms are ok and clear.

2-      Analyze The open accounts receivable reports and take an action with past due amounts with a coordination with his credit and collection committee.

 

3-      Ensure all customer statements of account have been sent every month along with the delinquencies notes.

The credit analyst within the entity analyzes the customer's ability to meet the payment of goods or facilities received

 

thanks

 Checking loan applicant's credit worthiness.

Customer risk management.

Collecting and analysing data of each client.

Based on analysis has to suggest possible course of actions. 

Apply particular interest rate based of the level of risk. 

 

 A Credit Analysis is focus on  determine the ability of business to repay its lones by analyzing the companies financial statments.

whatever his/her boss instructs 

Just to acquire best credit worthy clients as per company and regulator regulations.

Credit analysis is a job that comes with lots of responsibility. Generally, a credit analyst is responsible for assessing a loan applicant's creditworthiness. Depending on the area in which a credit analyst chooses to work, these applicants could be individuals or companies. Credit analysts are typically employed by commercial and investment banks, credit card issuing institutions, credit rating agencies and investment companies. Read on to find out if shouldering this kind of responsibility is for you.

What Does a Credit Analyst Do?

A credit analyst is responsible for gathering and analyzing financial data about clients, including paying habits or history, earnings and savings information, and purchase activities.

After the data has been gathered, a credit analyst evaluates the data and recommends a course of action for the customer. For example, a credit analyst who works with a bank or organization that issues credit cards collects data about clients who have defaulted in their payments. After analyzing the data, the analyst might recommend closing the card or reducing the credit line. Credit analysts are not limited to clients who have defaulted in their payments. A credit analyst can also be responsible for potential customers seeking new credit or customers who are being considered for credit line extensions. (To learn more, read What Is A Corporate Credit Rating.)

Educational Requirements

The minimum educational requirement for the position of credit analyst is a bachelor's degree in finance, accounting or another related field. A bachelor's degree in finance or accounting exposes you to subjects like basic accounting and finance, statistics, ratio analysis, calculus, economics, industry assessment and financial statement analysis. These subjects are necessary to function as a credit analyst because they aid in risk assessment. Educational subjects like industry and ratio analysis are necessary because part of assessing the risk for a company includes assessing its environment.

While having a bachelor's degree in a finance-related field comes in very handy, some companies do not require it. Some banks and companies provide on-the-job training to credit analyst employees who do not have finance-related degrees. On most occasions, these companies require some work experience in an accounting/finance-related field or a graduate degree in a business-related field. Depending on the level of the job, a company might require a credit analyst to have a Chartered Financial Analyst (CFA) designation. (For more, check out What Does CFA Mean?)

Other Required Skills

Some other skills that a credit analyst must possess include the following:

• Diligence: This is the ability to pay great attention to detail. As a credit analyst, any piece of information or data that is missed can lead to incorrect analysis of a customer and may cause potentially costly problems for the client involved.
• Quantitative Analysis Skills: A credit analyst has to be able to look at or create a set of numbers and be able to know what they mean for each particular client.
• Written and Oral Communication Skills: A credit analyst must be able to effectively disseminate decisions to a variety of people, either orally or in print. Coming up with a solution to a problem is of little use if you cannot effectively communicate it to others.
• Knowledge of Industries: Sometimes a credit analyst is assigned to work with companies and firms that operate in a particular industry. For this reason, a great understanding of the ins and outs of a particular industry can come in handy. If you don't know many industries, just be sure to do your research before you show up for an interview.
• Multitasking and Prioritization Skills: A credit analyst needs to be able to work on different projects at once and prioritize projects effectively. This is because a credit analyst might be assigned to work with different clients at the same time.
• Experience with Financial Software: A credit analyst has to be comfortable with some software like Microsoft Excel and other financial software used to analyze numerical data. (To keep reading on this subject, see Microsoft Excel Features For The Financially Literate.)

Benefits of Being a Credit Analyst

One major advantage to being a credit analyst is that you are not limited to a particular type of company. A credit analyst does not have to work only for a bank or credit rating agency. A credit analyst can work for any company that offers financing for its products and services. This means that a credit analyst can work with an automobile manufacturer, retail store, utility or even an energy company.

Another benefit of being a credit analyst is that it can lead to higher and exciting career paths like investment banker, portfolio manager and loan and trust manager. And, according to Salary.com, an average credit analyst with a bachelor's degree earns between $34,000 and $57,000, which is a pretty solid wage in this sector. (To find out who makes the big bucks, see Top 4 Most Competitive Financial Careers.)

The Bottom Line

While it sounds like a lucrative and easy job to do, being a credit analyst is also a stressful job. As a credit analyst, the decisions you make can determine the interest rate at which an individual or a company borrows, or whether the client gets a loan or a credit line and what amount he or she will receive. A credit analyst has huge responsibilities and the position should not be taken lightly. This can be a lucrative job, but it requires a lot of hard work.

 

assessment of creditworthiness of client companies, compliance of costumer, also financial analysis including cash flow records, and measure the risk. those points are aimed to mitigate the risk which probably occur within credit time period by designing the requirements.