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Key Financial Ratios for Trade Credit Analysis

Here's an online trade credit course on financial ratio analysis to fast-track the key financial ratios for assessing customers' creditworthiness.

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About this Course

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description
lessonOverview

“If you can’t measure it, you can’t improve it.” - Peter Drucker

Today the market trends change daily and are very unpredictable. In this scenario, not having a clear idea of what ratios to track could lead to inaccurate credit decisions. Result? End up doing business with at-risk customers.

Despite the economic flux, how can you accurately assess your customer’s creditworthiness?

Regular tracking and monitoring of customers' performance metrics, could help credit analysts keep a close eye on their customer’s financial health.

Here are some key metrics to identify risks associated with potential customers

-Liquidity ratios - This ratio will help you determine debtor's ability to pay off their current debt obligations without raising external capital.

-Leverage ratios - This ratio will help you assess your customers’ ability to meet their economic obligations.

-Activity ratios - This ratio will help you understand how efficiently the debtor is leveraging the assets on its balance sheet, to generate revenues and cash.

-Net Income ratios - This ratio will help you measure your organization’s profitability and is primarily used for internal comparison.

Tracking these key metrics could simplify complex sets of data and even save a lot of time and effort. It even widens the scope of inter-firm comparisons to identify companies that are likely to go out of business.

Watch the complete course to explore the methods to use these key ratios in detail. Unlock the break-even point formula to determine whether or not your customers have the dollar amount to do business with you.

transcript

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instructor
name title image description
ROBERT SHULTZ Founder, Quote to Cash Solution Robert Shultz has had a thirty-year career as a global credit and financial executive for large multi-national companies. As a Founding Partner of Quote to Cash Solutions (Q2C) LLC, he provides consulting services in all aspects of the credit and collections process for companies of all sizes in a variety of industries.
recommendation
image tag title description link duration
Financial Statement Analysis Business Credit Report Analysis and Evaluation Tutorial Get an insight into Business Credit Reports to interpret Experian, Equifax, Ansonia trade reports for better credit scoring and risk analysis. https://academy.highako.com/trade-credit-report-analysis-course 80 min
Credit Policy Credit Risk Assessment Training for Trade Creditors Learn how to assess Credit Risk and create Credit Scoring Models, and also, how to evaluate your customer creditworthiness. https://academy.highako.com/trade-credit-risk-assessment-course 40 Min
tribe
widgetType Id components
topic customer-finance-health-ratios input

Curriculum20 Mins

  • Key Ratios and Trends to Monitor, Value of Benchmarking (~ 20 Mins)
  • The Importance of Ratios
  • Understanding Liquidity Ratio Analysis
  • Understanding Activity Ratio Analysis
  • Importance of Long-Term Liabilities & Net Income ratios
  • Break-Point Analysis & Value of Analyzing Trends
  • Quiz and Course Completion Certificate
  • Quick Quiz
  • Certificate and Feedback

About this Course

promoImage
description
lessonOverview

“If you can’t measure it, you can’t improve it.” - Peter Drucker

Today the market trends change daily and are very unpredictable. In this scenario, not having a clear idea of what ratios to track could lead to inaccurate credit decisions. Result? End up doing business with at-risk customers.

Despite the economic flux, how can you accurately assess your customer’s creditworthiness?

Regular tracking and monitoring of customers' performance metrics, could help credit analysts keep a close eye on their customer’s financial health.

Here are some key metrics to identify risks associated with potential customers

-Liquidity ratios - This ratio will help you determine debtor's ability to pay off their current debt obligations without raising external capital.

-Leverage ratios - This ratio will help you assess your customers’ ability to meet their economic obligations.

-Activity ratios - This ratio will help you understand how efficiently the debtor is leveraging the assets on its balance sheet, to generate revenues and cash.

-Net Income ratios - This ratio will help you measure your organization’s profitability and is primarily used for internal comparison.

Tracking these key metrics could simplify complex sets of data and even save a lot of time and effort. It even widens the scope of inter-firm comparisons to identify companies that are likely to go out of business.

Watch the complete course to explore the methods to use these key ratios in detail. Unlock the break-even point formula to determine whether or not your customers have the dollar amount to do business with you.

transcript

Coming Soon

resources Coming Soon
discuss Coming Soon
instructor
name title image description
ROBERT SHULTZ Founder, Quote to Cash Solution Robert Shultz has had a thirty-year career as a global credit and financial executive for large multi-national companies. As a Founding Partner of Quote to Cash Solutions (Q2C) LLC, he provides consulting services in all aspects of the credit and collections process for companies of all sizes in a variety of industries.
recommendation
image tag title description link duration
Financial Statement Analysis Business Credit Report Analysis and Evaluation Tutorial Get an insight into Business Credit Reports to interpret Experian, Equifax, Ansonia trade reports for better credit scoring and risk analysis. https://academy.highako.com/trade-credit-report-analysis-course 80 min
Credit Policy Credit Risk Assessment Training for Trade Creditors Learn how to assess Credit Risk and create Credit Scoring Models, and also, how to evaluate your customer creditworthiness. https://academy.highako.com/trade-credit-risk-assessment-course 40 Min
tribe
widgetType Id components
topic customer-finance-health-ratios input

Curriculum20 Mins

  • Key Ratios and Trends to Monitor, Value of Benchmarking (~ 20 Mins)
  • The Importance of Ratios
  • Understanding Liquidity Ratio Analysis
  • Understanding Activity Ratio Analysis
  • Importance of Long-Term Liabilities & Net Income ratios
  • Break-Point Analysis & Value of Analyzing Trends
  • Quiz and Course Completion Certificate
  • Quick Quiz
  • Certificate and Feedback