Credit Rating Project # 8 – Shopper Stop

This online live project is to understand how shall one determine the credibility/credit worth of the company which in this project would be retail sector company Shoppers Stop. The credit model along with the forecasted data would be provided to you and after studying the financial and non-financial criterias you would have to decide on a credit rating. After which you would be asked to write a recommendation report stating the credit rating and the supporting reasons for the rating.

About Credit Rating Project Training

Before you decide whether or not to invest in a company or in a foreign country, you have to determine whether your investment would be able to meet its goals. A ratings company or organisation can help you in this regard. Providing objective and independent assessments of credit worthiness, such organisations help investors to decide how risky or worthwhile it’s to invest in a particular company or country.

The information used to arrive at a credit rating is collected from the companies or organisations with which the business has financial relationships. These include lenders, suppliers, creditors etc. Additional data can be sought from company financial reports, lawsuits, business filings, as well as judgements and litigations filed against the company.

The promptness, with which a company squares off its payment obligations, is one of the most important factors that influence its credit rating. Repayment of loans, paying off suppliers, and payment of monthly bills and lease are all considered while determining the credit rating. Does the company make timely payments to its creditors? What’s the structure of its debts? Are the loans unsecured or secured? What’s the total due of the company? Besides the payment history, importance is given to cash flow, working capital, financial resources, promoter holding, and finally the net worth of the company.

But fiscal information of a company is not considered in a vacuum. Its business profile is also taken, including the size, reputation, history, along with the number of employees, share price movement, and the structure of the business. The credit rating also reflects the scope and size of the business.

Credit rating in the world of investments

Investment opportunities have become more diverse and global. It’s difficult to determine not only the companies, but also countries that could be good investment destinations. While there are advantages to invest in overseas markets, the risks involved in sending money abroad are much higher than investing in the domestic market. It’s important to have an insight into the various investment environments and also understand their advantages and risks. Gauging the willingness and ability of an entity—company, person, security or country—to keep its debt or financial commitments, a credit rating is an important tool to help you take investment decisions.

The rating agencies

Standard & Poor’s (S&P), Fitch, and Moody’s, are the three top credit rating agencies in the world. The main aim of all these agencies is to provide a rating system for helping investors determine the risks involved in investing in some company, instrument or market.

Ratings are usually assigned on long-term and short-term debt obligations, as well as loans, securities, stocks, insurance companies, and even nonbanking financial institutions. A long-term credit rating largely tends to indicate a country’s investment scenario or a company’s ability to honour its debt obligations.

For any company or government, it’s usually easier to square off local currency obligations than the foreign ones. Credit ratings assess an organisation’s ability for paying off debts in both domestic and foreign currencies. A shortage in foreign reserves, for instance, could lead to a lower rating regarding the obligations a country has made in foreign currencies.

Ratings are not equivalent to, or same as hold, buy, or sell recommendations. Credit ratings measure the entity’s willingness and ability to repay its debt. A big company with large-scale operations but with lots of creditors and unpaid loan, won’t be a worthwhile investment, compared to a small firm with small operations and less creditors to pay off.

The ratings per se

Credit ratings lie on a spectrum which ranges from the highest credit worthiness to “junk” or default at the lowest. Agencies use letters of the alphabet to denote the credit worthiness of a business.

A long-term credit rating is denoted with a triple “A” (AAA). It’s the symbol of highest credit quality of a business. A “C” or “D” rating (depending on the agency which issued the rating) is considered as junk or of the lowest quality. Within this range, there are several degrees of ratings that may be denoted by a plus or minus sign, or a number, depending upon the agency.

For Fitch ratings, a “AAA” will mean the best investment grade with minimum credit risk. “AA” means a very high credit rating, while “A” means a high credit quality. “BBB” means good credit worthiness. All these ratings are considered as investment grade. It means that the company or security being rated conforms to a high quality that many retail and institutional investors require while contemplating overseas investments. Some rating agencies may use a combination of letters and numbers.

Companies or countries that are rated “BBB” are considered as junk or speculative. For Moody’s, “Ba2” will mean speculative rating, while a “D” by S&P would mean a default status.

Credit Rating Shopper Stop Course description

The credit rating project training course is as follows.

• Basic Excel:

You are introduced to basic Excel concepts in this part. You start with the ribbons quick access toolbar and surfing the Excel HELP function. This is followed by case studies, data entry, populating the case study, calculations like addition, multiplication, subtraction and division, formulas like MAX, MIN, SUM, and AVERAGE, number and table formatting, updating calculations, percentage and absolute reference, conditional formatting, functions like IF, COUNTIF, and SUMIF, creating graphs, charts, and pie charts, filter, sort, pivot table, presentation table format, freeze and split, presentation table formats, presentation formatting charts and indents, printing titles and headers, printing a worksheet, shortcuts to formatting, navigation, selection data and formula, and common Excel errors.

• Advanced Excel:

This section is divided into 60 parts. You learn about office button and paste function, sparklines custom ribbons and screenshot, equation editor and conditional formatting, paste special, logical functions like IF, AND, OR, arithmetic functions like MIN, MAX, ABS and others, COUNT, COUNTA, COUNTIF, COUNTBLANK, cell information like ISBLANK, ISERROR and others, CHOOSE, HLOOKUP, and VLOOKUP functions, MATCH INDEX, database functions like DAVERAGE, DCOUNT, and DSUM, the OFFSET and FORECAST function, one dimensional and two dimensional data tables, goal seek, solver, introduction to array function and row and columns, TRANSPOSE, and FREQUENCY, PROPER, LOWER, UPPER, RIGHT, MID, LEFT, FIND, CLEAN, CONCATENATE, REPT, pivot tables and table filter slicer and charts, naming a cell and range, naming dynamic ranges, auditing toolbar, watch window, options button and group boxes, check boxes, list boxes, and combo boxes, spinners and scroll bars, grouping tabs, text to column, hyperlink, SUBTOTAL function, random numbers, data validation, custom view, protecting the workbook and worksheet, Excel 2010 sparklines, range charts type 1 and 2, two axis graphs, funding graph, scenario graphs, bar to pie chart, average line, combo charts, creating histograms and inverting negatives, scrolling charts (in two parts).

• Report writing techniques:

This is the final section of the course. Here you’ll be introduced to report writing and get to know what’s an equity research report and it’s anatomy, comparing such reports, case studies on report writing, useful financial websites, report on the Indian media sector (in three parts), peer analysis (in seven parts), and a research report on Reliance Petroleum.

Credit Rating Shopper Stop Course Requirements

Following are some of the additional skills that a credit rating analyst should have.

• Diligence: As a credit analyst you have to pay minute attention to details. Any piece of data or information that’s left out may result in an incorrect analysis of the company. This could lead to misinformed investment decisions and financial losses.

• Quantitative analysis skills: Credit rating analysts should be able to create or look at sets of numbers and able to know what they tell about a company. Their study means a lot to prospective investors.

• Verbal and written communication skills: Credit analysts must be able to properly disseminate their decisions to many people, in both writing and orally. Resolving a problem will be hardly of any use if the outcome can’t be communicated properly to the interested quarters.

• Knowledge of industries: Credit analysts are often delegated to work with companies or organisations that operate in a particular industry. They must have a thorough knowledge of the ins and outs of the industry that’ll come in handy at times. If you are unaware of the many industries and its trends, you may not be able to take a proper investment call.

• Multi Tasking and prioritisation: A credit analyst is required to work on several projects at the same time. But he/she must be able to prioritise them according to importance. While each project will be important, some of them may call for immediate attention.

• Financial software experience: Credit analysis calls for working with various financial software and spreadsheets. Microsoft Excel is one of them. A working knowledge of such software is a necessity.

Credit Rating Shopper Stop Course Target audience

A bachelor’s degree in accounting, finance, or another relevant field is the minimum requirement to pursue the programme. Such a degree will give you the basic exposure to topics like ratio analysis, economics, statistics, financial statement analysis, and industry assessment, besides finance and accounting. A background in these subjects is imperative to carry on as a credit analyst professional. Ratio analysis and industry study is required for assessing risks of a company with regards to its environment.

The course has been specifically designed for candidates who want to work in a credit rating agency, those who want to be independent professionals in the credit research domain, students having MBA, BBA, MMS or BMS degrees, and any individual who is interested in an internship with a credit rating organisation. Portfolio managers, financial analysts, commercial bankers, credit offices, and credit risk managers can take this course.

FAQs: Some general questions

1. Who are your instructors?

All our instructors are industry experts and practitioners. They follow an interactive training style and the sessions are case study-based. They coach, inform, and challenge participants to extract a practical and immediate real-life application from the course.

2. Is there any pre-course reading?

For optimal use of class time, we may ask the participants to collect some background information on the case, ahead of attending classes. This would ensure that each attendee is able to participate in class discussions. Additional background material, in some cases, may be provided.

3. Can I skip one or more video tutorials?

You can view any session according to your choice. But we suggest that you follow the order of the tutorial. You can, of course, review a clip and go back and forth as many times you like. Expert professionals may skip a video if they are already familiar with its content.

Testimonials

Navneet Naik

“I first thought that the programme won’t be of any use because I already specialised in credit analysis in my MBA. Trust me, whatever we generally learn in colleges as theory, is not even one percent useful in practical life. EduCba’s credit rating course was exactly what I needed for my job.

S John

“The topics covered were immensely relevant. Many of them were market-oriented to help you in job interviews.”

Ashish Sawant

“The entire programme was well constructed and credit rating concepts were explained in details. The flow of teaching and the simple explanation of each concept helped me to get a firm grip on the subject.”

Sukanya Dasgupta

“The credit rating training course was a quick refresher to my knowledge of financial analysis. Clients today are ever-demanding and a credit advisor must have an exhaustive knowledge of all the products. I’ll highly recommend the programme for anyone willing to work in the credit analysis domain.”

 Career benefits

A big advantage of being a credit analyst is that you don’t have to be limited to some particular company or organisation. Credit analysts don’t have to work only for a credit rating agency, or a bank, or other financial institution. They can work for any organisation that offers market consultancy, financial advisory services or financing for its products and services. This means, credit analysts can work in the retail, automobile, manufacturing, energy, and even in the utility services sector.  

Credit rating analysts can also pursue exciting and higher career paths like portfolio manager, investment banker, and loan or trust managers. They command high salary and perks.

Where do our learners come from?

Professionals from around the world have benefited from eduCBA’s Credit Rating Project # 8 – Shopper Stop Courses. Some of the top places that our learners come from include New York, Dubai, San Francisco, Bay Area, New Jersey, Houston, Seattle, Toronto, London, Berlin, UAE, Chicago, UK, Hong Kong, Singapore, Australia, New Zealand, India, Bangalore, New Delhi, Mumbai, Pune, Kolkata, Hyderabad and Gurgaon among many.

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