Lesson 1Interpreting credit ratings and bank risk assessments for mid-cap industrial borrowersThis part explains how rating agencies and banks check medium factories, making clear the rating scales, score sheets, quality changes, and how these checks affect prices, rules, and getting funds.
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 part shows how to compare funding structure with public similar companies, setting usual debt to equity levels, understanding spread in leverage, and using 2–3 comparators to set target ratios and what lenders feel comfortable with.
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 part looks at cash availability and day-to-day funds for makers, focusing on days sales outstanding, days payables outstanding, days inventory outstanding, and cash cycle, and explains how rules, busy seasons, and supply terms affect cash needs and bank support.
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 part introduces main places to get public financial and market data, like EDGAR, company papers, Bloomberg or Refinitiv basics, and country records, and shows how to pull out, match up, and rightly quote numbers and notes.
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 part builds key profit measures for factory businesses, including EBITDA margin, net margin, ROCE, and ROE, and shows how to adjust for one-off items, compare to others, and connect returns to funding 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 part checks cash flow reports for factory firms, focusing on operating cash flow, free cash flow, and conversion rates, and shows how to spot earnings quality problems, funding shortfalls, and ability to pay debts.
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 part checks company-specific risks for car parts and green energy suppliers, covering market, operations, currency, country, and sector risks, and connects these to ratings, needed returns, and funding 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 part focuses on reading profit-loss and balance sheets for medium makers, highlighting revenue quality, cost setup, asset heaviness, and key signs that show business strength, efficiency, and money 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 part details leverage and solvency measures used in credit checks, including net debt to EBITDA, debt to EBIT, interest cover, and current/quick ratios, and explains limits, changes, and meaning across business 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 part covers how to pick similar European factory companies, setting screening rules, segment filters, and data places, making sure chosen peers match similar risk, growth, and capital needs.
Industry, size, and geographic screening criteriaBusiness model and product mix alignmentUsing databases and exchanges for peer listsCleaning and validating peer financial data
