The role of debt in fundamental analysis

  • Fundamental Analysis

Overview

In this course you'll learn that credit analysis and equity analysis are not exclusive of each other. An understanding of credit ratings can help assess the equity performance potential of a company. In addition you’ll learn the potential effect of default on a company and how debts issued in currencies other than the U.S. dollar pose unique issues.

Objectives

When you complete this course, you will:

  • Understand how credit analysis can help assess the equity performance potential of a company.
  • Recognize the different types of default and their implications.
  • Be aware of how exposure to global currency may affect your portfolio.
Course Outline
Title Type Highlight
1. Investing in debt: An introduction Video
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Debt financing is when a company sells bonds to raise capital. In very simple terms you are lending the company money - in return they will pay you interest on that loan and agree to return your principal at a later date.

Debt financing is when a company sells bonds to raise capital. In very simple terms you are lending... More
2. Basics of credit analysis Article
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The fundamental factors evaluated in credit analysis tend to be the same factors considered in equity analysis: financial efficiency ratios, capital utilization, cash flow, gross margin, cost, and revenues.

The fundamental factors evaluated in credit analysis tend to be the same factors considered in... More
3. The significance of default Article
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In the wake of a default and liquidation, different categories of debt will have different priorities for repayment and thus different potential recovery values.

In the wake of a default and liquidation, different categories of debt will have different... More
4. Currency and debt Article
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A globally diverse company typically conducts business in dozens of currencies throughout the year. Investments in bonds denominated in foreign currencies pose complex accounting and performance issues for their holders.

A globally diverse company typically conducts business in dozens of currencies throughout the year.... More

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The basics of debt

  • DST Systems, Inc.

Preferred stock

  • Wealth Management Systems Inc. Financial Communications