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The company was facing charges it had lent money to two subsidiaries without doing proper credit analyses.
A credit analyst believes the company is 30 times more likely to default on its debts than it was seven months ago.
Credit analysts, besides being skilled at financial statement analysis, use a number of ratios when reviewing the financial history of a potential borrower. They focus on determining whether the borrower will have sufficient cash flows by comparing ratios to industry standards, other borrowers and historical trends. For example, a credit analyst at a bank may analyze a company's financial statements before providing a loan for a new factory.