Specialized Industries
What industry works with U.S. subs of foreign owned entities?
What is MNC (multi-national corporations)
What is the fundamental equation in accounting (related to the BS)?
What is Assets = Liabilities + Equity
Who facilitates/manages the risk of the market’s portfolio?
What is the Credit Officer OR the deal team
List 2 of the 4 risk categories when the Bank assesses a Company.
What is Financial, Business, Industry, & Structure risk
What is the Bank's primary source of repayment?
What is Cash Flow
What does FBI and QOFs stand for, and which one is quantitative and qualitative?
What is Financial Based Indicator (quantitative) and Qualitative and Other Factors (qualitative)
What industry works with museums, zoos, religious institutions, and social service organizations?
What is HHN (Healthcare, Higher Ed, Non-for-Profit)
How is working capital measured?
What is (Current Assets – Current Liabilities)
What is connecting with and researching prospects to determine potential partnership opportunities called?
What is Prospecting
Name two types of financial risk found on the balance sheet.
What is Liquidity (cash) and Leverage (debt)
List two types of assets the Bank would consider as collateral.
What is A/R, Inventory, Machinery/Equipment, Real Estate
What type of financials are required to complete the FBI grading process?
What is an audited/reviewed financial statement OR a TTM analysis accompanied by the most recent audit
What industry grows and sustains relationships with nearly 22,000 clients across 115 U.S cities with annual revenue of $20-2 billion?
What is Core
What does EBITDA stand for?
What is Earnings Before Interest, Tax, Deprecation, & Amortization
What step in the credit process is the OM (opportunity memo) and term sheet prepared?
What is Deal Analysis OR Pitch
Name two types of financial risk found on the income statement.
What is Revenue and EBITDA
What are intangible assets?
Intangible assets include intellectual property, goodwill, contracts, and securities
What are the steps in determining LGD (hint: there are 4)?
What is selecting the appropriate LGD Decision Tree, determining the appropriate path for Preliminary LGD, applying the appropriate modifiers (quantitative, qualitative, or jurisdictional), and documenting your results
What industry focuses on companies with the ability to scale quickly and has a revenue source tied to goods and/or services provided primarily via ecommerce?
What is TDC (Tech and Disruptive Commerce)
What is the formula for leverage?
What is Total Debt/EBITDA
What step of the credit process are terms negotiated and legal documentation is completed?
What is credit analysis (historically underwriting) / closing
Name the top two types of business risk.
What is management and reputational risk
Why does the Bank need collateral/security?
If a lender is unsecured, in a bankruptcy, the lender is at the same place in line as all other unsecured creditors (Partial credit: to ensure the Bank gets paid)
Name two of the four items that impact the initial LGD.
What is type of obligor, quality of collateral, degree of monitoring, and seniority in capital structure
What group establishes a group of lenders familiar with the client and credit profile to provide different credit facilities?
What is SFG (Syndicated Finance Group)
What is the formula for Fixed Charge Coverage Ratio?
(JPM Adj. EBITDA – Maintenance Capex) / (Principal Payments + Cash Interest + Cash Taxes + Cash Distributions)
What system shows all facilities, financial statements, and grading for each client?
What is iCRD
Name the top two types of industry risk.
What is cyclicality and seasonality
When would the Bank consider providing unsecured lending?
Larger company AND/OR Investment grade
There are two common scenarios where a client may be non-graded when JPM is relying on repayment from another source. What is one of the cases where this is possible?
What is NC (Not Rated – Collateral) if there is full security by cash or marketable securities OR NG (Not Rated – Guarantee) if there is reliance on a guarantee covering exposure of the client