Balance Sheet

Assets represent what the company owns and include current assets (such as cash, accounts receivable, and inventory) and non-current assets (such as property, plant, and equipment). A thorough review of assets helps determine the company's liquidity, operational efficiency, and ability to generate future cash flows.

Liabilities represent what the company owes to creditors and other stakeholders and include current liabilities (such as accounts payable and short-term debt) and non-current liabilities (such as long-term debt and deferred tax liabilities). Reviewing liabilities helps assess the company's debt levels, debt maturity profiles, and its ability to meet its financial obligations.

Equity represents the residual interest in the company's assets after deducting liabilities. It includes common stock, retained earnings, and additional paid-in capital. Analyzing equity helps evaluate the company's capital structure, financial leverage, and the extent to which shareholders' interests are protected.

Evaluate the company's debt levels and debt repayment capacity by analyzing its debt-to-equity ratio, debt-to-assets ratio, and interest coverage ratio. Consider the company's debt maturity profile and refinancing risk.

Review the composition and quality of the company's assets. Evaluate the aging of accounts receivable and inventory turnover ratios to assess the efficiency of asset management.

Analyze the company's capital structure to understand its financing mix and the proportion of debt versus equity. Assess the cost of capital and the company's ability to generate returns for shareholders.

Liquidity Analysis: Assess the company's liquidity position by examining its current assets and liabilities. Calculate liquidity ratios such as the current ratio and quick ratio to evaluate the company's ability to meet short-term obligations.

Review the company's historical financial performance, including revenue growth, profitability, and cash flow generation. Consider trends and fluctuations in key financial metrics over time.

Identify potential risks and uncertainties that may impact the company's creditworthiness, such as industry trends, competitive pressures, regulatory changes, and macroeconomic conditions.