Page 38 - FINAL CFA SLIDES DECEMBER 2018 DAY 15
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Session Unit 16:
                                                                          55. Fundamentals of Credit Analysis

        Example: Credit analysis with financial ratios (Part 2):
        2. Coyote Media is also a multimedia company and is a rival of Saxor. Given the following ratios for Coyote over the
        same period, calculate the 3-year averages for both Saxor and Coyote and comment on which multimedia company is
        expected to have a better credit rating.










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          All ratios support a higher credit rating for Saxor. Saxor has a better operating margin and better

          coverage for interest (EBITDA/interest) and for debt (FCF/debt). Lower leverage as measured by
          debt-to-capital and debt-to-EBITDA also favor Saxor.
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