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Section 6: Credit Risk Analysis and Investment Analysis

Identify 3-5 credit risks this Ford Motor Company is facing from the past three years. This could be why are sales increasing so fast, is it sustainable? If sales margins erode by a few percentage points, profitability and cash flow, become at risk. The next step would be to mitigate the risk.

Section 7:5 C's of Credit Analysis (Complete with information using Ford) How Assessed The C What it Measures Personal qualities Credit trustworthiness Probability of meeting obligations Character - Credit Score Work history and business/personal references . FICO credit score Existing investment in business Potential to invest more Capital - The "skin" (s) you have put into your business Ability and willingness to Invest further Profitability of the business/ability to generate cash flow Other sources of cash flow, e.g., salary from a job Forecasted data showing ability to service debt Capacity Cash flow available to service debt Funder's margin of safely Assets available as security for a loan - Funder's margin of safetyii The current operating environment - Competitive landscape Risk of the investment - Value and liquidity of assets owned by the business Valuc and liquidity of owner's personal assets Collateral - Specific use of the funds; likelihood of success Industry/economic data Conditions Section 7:5 C's of Credit Analysis (Complete with information using Ford) How Assessed The C What it Measures Personal qualities Credit trustworthiness Probability of meeting obligations Character - Credit Score Work history and business/personal references . FICO credit score Existing investment in business Potential to invest more Capital - The "skin" (s) you have put into your business Ability and willingness to Invest further Profitability of the business/ability to generate cash flow Other sources of cash flow, e.g., salary from a job Forecasted data showing ability to service debt Capacity Cash flow available to service debt Funder's margin of safely Assets available as security for a loan - Funder's margin of safetyii The current operating environment - Competitive landscape Risk of the investment - Value and liquidity of assets owned by the business Valuc and liquidity of owner's personal assets Collateral - Specific use of the funds; likelihood of success Industry/economic data Conditions

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