Credit Risk Assessment of Whirlpool Corporation using Financial Statement Analysis

Corporate Finance and Financial
Statement Analysis

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
USING FINANCIAL STATEMENTS FOR CREDIT RISK ANALYSIS...............................3
CONCLUSION..........................................................................................................................5
REFERENCES...........................................................................................................................6
APPENDIX................................................................................................................................7

INTRODUCTION
Credit risk assessment accounts for estimating the chances of loss which is generated
due to the borrower’s inability to repay back the loan amount. This is the risk which the
lender might not be able to receive its principle and interest amount. This helps in
determining the ability of the borrower to repay the debt amount which involves assessing the
credit history, capital, loans terms, related collateral, capacity to repay etc. In this report, a
credit risk assessment is being conducted on the Whirlpool Corporation which is a
manufacturer of home appliance having headquarter in US. This report provides insight into
the crucial financial ratios which can be utilized for the purpose of determining and
evaluating the creditworthiness of the company. This provides analysis of the ratios based
upon which current position of the company is being identified along with the causes
pertaining to it and at last conclusion is drawn.
USING FINANCIAL STATEMENTS FOR CREDIT RISK ANALYSIS
The credit risk analysis refers to the technique which is being used for the purpose of
determining the credit risk the firm is exposed to. There are certain financial rations which
can be used for the credit analysis process (Belás and et.al., 2017). These are very helpful as
it assists the investors and the analyst in determining whether the individuals are capable of
fulfilling the financial responsibility within time or not. It takes into consideration both
financial and non-financial aspects as well.
Following are the financial ratios which are essential to be analysed in order to know
the creditworthiness of the business of Whirlpool Corporation.
Ratio Analysis 2017 2018 2019
PROFITABILITY RATIO
NET PROFIT
MARGIN
NET PROFIT
-1,83,000 11,84,00
0
10,81,000
REVENUES
2,12,53,0
00
-
0.86
%
2103700
0
5.80
% 2,04,19,0
00
5.29
%
Operating profit
margin
OPERATING
PROFIT (LOSS) 14,11,000
12,73,00
0 19,11,000
REVENUES
2,12,53,0
00
6.64
% 2103700
0
6.05
% 2,04,19,0
00
9.36
%
LIQUIDITY RATIO
CURRENT
RATIO CURRENT
ASSETS 79,30,000
78,98,00
0 73,98,000
CURRENT
LIABILITIES 85,05,000
0.93
96,78,00
0.82
83,69,000
0.88