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Recognizing the Trade-Offs

In: Understanding Corporate Credit

Author

Listed:
  • T. H. Donaldson

    (Morgan Guaranty Trust Company of New York)

Abstract

Credit analysis involves the intelligent dissection of the balance sheet, of relationships within and between it and profit and loss, of management and of the various features discussed in the previous chapters. The aim is to reach a balanced view of the company’s strengths and weaknesses, to identify the risks, to assess their probability and the company’s ability to survive them. To do this banks almost always need more information on the finances and on the nature of the business than companies publish or are willing to disclose. The banker must therefore constantly seek to expand his information in contacts with the company, with others in the same industry, customers and other outside analysts. Much of this information also helps the banker to market his bank’s services to best advantage; indeed, credit and marketing are in this as in other areas closely interlinked rather than conflicting as some bankers, and many customers, seem to see them.

Suggested Citation

  • T. H. Donaldson, 1983. "Recognizing the Trade-Offs," Palgrave Macmillan Books, in: Understanding Corporate Credit, chapter 11, pages 185-213, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-17325-9_11
    DOI: 10.1007/978-1-349-17325-9_11
    as

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