Lesson 1Interpreting credit ratings and bank risk assessments for mid-cap industrial borrowersThis section explains how rating agencies and banks evaluate mid-cap industrial borrowers, clarifying rating scales, scorecards, qualitative adjustments, and how these assessments influence pricing, covenants, and access to funding.
Rating scales, outlooks, and default probabilitiesBank internal rating models and scorecardsQualitative factors in industrial credit reviewsLink between ratings, pricing, and covenantsLesson 2Benchmarking capital structure: typical debt/equity ranges and ratio interpretation using 2–3 public comparatorsThis section explains how to benchmark capital structure using public peers, defining typical debt to equity ranges, interpreting leverage dispersion, and using 2–3 comparators to frame target ratios and lender comfort levels.
Defining peer-based target leverage rangesDebt to equity and net debt to EBITDA bandsUsing 2–3 peers to frame rating expectationsAdjusting benchmarks for size and business riskLesson 3Liquidity and working capital analysis: DSO, DPO, DIO, and cash conversion cycleThis section analyzes liquidity and working capital for manufacturers, focusing on DSO, DPO, DIO, and the cash conversion cycle, and explains how policies, seasonality, and supply chain terms affect cash needs and bank facilities.
Calculating DSO, DPO, and DIO accuratelyInterpreting the cash conversion cycleInventory, receivables, and payables policiesLink to liquidity lines and factoring usageLesson 4Sourcing and citing public financial data and analyst reports (EDGAR, Company filings, Bloomberg/Refinitiv basics, national registries)This section introduces key sources for public financial and market data, including EDGAR, company filings, Bloomberg or Refinitiv, and national registries, and explains how to extract, reconcile, and properly cite figures and commentary.
Reading annual reports and interim filingsBasics of Bloomberg and Refinitiv functionsUsing national company registries in EuropeReferencing analyst reports and consensus dataLesson 5Calculating and interpreting profitability metrics: EBITDA margin, net margin, ROCE, ROEThis section develops core profitability metrics for industrials, including EBITDA margin, net margin, ROCE, and ROE, and shows how to adjust for nonrecurring items, compare to peers, and link returns to capital structure choices.
EBITDA and net margin drivers in manufacturingROCE: capital employed and operating returnsROE: leverage effects and sustainabilityPeer benchmarking of profitability levelsLesson 6Cash flow analysis: operating cash flow, free cash flow, and conversion ratiosThis section examines cash flow statements for industrial firms, focusing on operating cash flow, free cash flow, and conversion ratios, and shows how to detect earnings quality issues, funding gaps, and capacity for debt service.
Structure of industrial cash flow statementsOperating cash flow versus EBITDA conversionFree cash flow after capex and dividendsCash flow coverage of interest and amortizationLesson 7Assessing company-specific risk profile: market, operational, currency, country, and sectoral risks relevant to automotive and renewable suppliersThis section assesses company-specific risk for automotive and renewable suppliers, covering market, operational, currency, country, and sector risks, and links these factors to ratings, required returns, and financing terms.
Market and demand risks in cyclical end-marketsOperational and supply chain disruption risksCurrency and country risk in sourcing and salesSector-specific risks in auto and renewablesLesson 8Interpreting income statement and balance sheet indicators for mid-sized manufacturing firmsThis section focuses on reading income statements and balance sheets for mid-sized manufacturers, highlighting revenue quality, cost structure, asset intensity, and key indicators that reveal business resilience, efficiency, and financial flexibility.
Revenue mix, cyclicality, and customer dependenceCost structure, operating leverage, and marginsAsset base, fixed assets, and capital intensityBalance sheet strength and capital employedLesson 9Leverage and solvency metrics: net debt/EBITDA, debt/EBIT, interest coverage, current and quick ratiosThis section details leverage and solvency ratios used in credit analysis, including net debt to EBITDA, debt to EBIT, interest coverage, and liquidity ratios, and explains thresholds, adjustments, and interpretation across cycles.
Net debt to EBITDA: definition and adjustmentsDebt to EBIT and sensitivity to downturnsInterest coverage and covenant headroomCurrent and quick ratios in industrial contextsLesson 10Comparable company selection: criteria and sourcing financials for European industrial firmsThis section covers how to select comparable European industrial companies, defining screening criteria, segment filters, and data sources, and ensuring that chosen peers reflect similar risk, growth, and capital intensity profiles.
Industry, size, and geographic screening criteriaBusiness model and product mix alignmentUsing databases and exchanges for peer listsCleaning and validating peer financial data
