Credit Research

21. September 2023.

HOW TO CALCULATE PAYABLES DAYS / DPO? The flaws of the standard formula and some potential solutions

The standard textbook formula: Payables days = 365 * Trade payables / COGS (You might also see average trade payables, but for the sake of simplicity […]
16. August 2023.

EBITDA definition in theory and practice – when to pay special attention

What we normally think when we see the term EBITDA: 1) Revenue – Operating expenses + Depreciation and Amortization or 2) Net Income + (Net) Interest […]
14. August 2023.

DSCR threshold at 1,0x and its key issues

Recently I came across a loan agreement which included a Debt Service Cover Ratio (DSCR) as a maintenance financial covenant. While it is a common covenant […]
11. August 2023.

EBITDA Interest cover vs EBIT Interest cover – which one is better?

Let’s look at the example of the recently bankrupted US-based trucking company Yellow Corp. Its EBITDA Interest cover ratio was as follows: 2019: 1,4x 2020: 1,1x […]
2. August 2023.

EBITDA vs EBIT – when should they be used and how

How and when should we use EBITDA and EBIT? How to decide which one is better suited in a given situation? Here are the four main […]
6. July 2023.


Limitation on dividend distributions is one of the clauses that often creates a friction between a bank and a company. The ideal position for the bank […]
3. July 2023.


ICR is often used as a financial covenant in loan documentation. Sometimes as a part of a wider fin. covenant package, but sometimes also as the […]
25. May 2023.


Here are real-life examples I have been working on recently (some are still ongoing), and how financial statements analysis is helping my clients: A niche manufacturer […]
13. April 2023.

Common mistakes with financing through EU grants and 3 steps how to avoid them

Several examples have already shown that the opportunistic usage of EU funds has not brought the desired results. Moreover, some companies have increased their leverage beyond […]
13. April 2023.

Can EBITDA be a better metric than operating cash flow? Yes, it can!

Does this mean that EBITDA is a better metric than cash flow metrics? No. But when these are paired, we get a more complete picture. Here […]
5. April 2023.

How to spot a company in difficulties when the reported figures tell the opposite

Oftentimes companies’ reported figures point to a low credit risk, while the truth is completely the opposite. One is at risk of making a wrong decision, […]
2. April 2023.

Končar Group – the risks of high growth

Preliminary FY2022 accounts of the Končar Group (hereinafter: “Končar” or „the Group”) show a significant sales growth of 51,6% (+17% in 2021), driven by: (i) organic […]
5. March 2023.

Too much reliance on working capital lines can be costly

Access to revolving credit lines (RCF) is vital to many companies, so it is for Just Eat Takeaway(.)com (JET), a food delivery platform. Luckily, JET has […]
5. March 2023.

Peek & Cloppenburg’s insolvency indicates difficult operating conditions for fashion retailers in the post-Covid environment

After the recent announcement that the Düsseldorf-based Peek & Cloppenburg’s initiated pre-bankruptcy proceedings, Wirtschaftswoche summarized a list of all German fashion retailers which have recently undergone […]
28. February 2023.

EBITDA adjustments: Inventories and receivables write-offs should stay in EBITDA – here is why

One of the most common EBITDA adjustments is an adjustment for non-cash transactions. This means that EBITDA is reduced for inventories and trade receivables write-offs. Theoretically, […]
11. January 2023.

Bed Bath and Beyond – here is why you should pay attention to a company’s financial policy

Last Thursday Bed Bath and Beyond (BBBY) warned it’s running out of cash and is considering bankruptcy. (For those not familiar with the company, BBBY is […]
25. October 2022.

Credit Insights 11/22: Sunday trading ban in Croatia – effects on retailers’ credit ratings

The Croatian government has announced its plans to introduce a Sunday trading ban. The measure has been discussed in public several times already, and although nothing […]
17. September 2022.

CreditScore: INFOBIP CreditScore available

Doing business with Infobip? Interested in working there and worried whether they perform well? Or are you just curious how are they performing? Well, then Infobip […]
14. September 2022.

NEW SERVICE – CreditScore

– You want assurance that your business partners will fulfil their obligations towards you in full and on time, whether it is a payment or delivery […]
3. June 2022.

Medika, Medical intertrade, Oktal pharma, Phoenix Farmacija – Weak liquidity and high refinancing risks limit pharma distributors’ credit ratings (“CAeu”) assigned first-time credit ratings to the four leading Croatian pharma distributors – Medika, Medical intertrade, Oktal pharma, and Phoenix Farmacija. Rating rationale The assigned […]
26. May 2022.

Credit Insights 06/22: Can smaller football clubs be good credits? How to analyse football clubs’ financial statements

 Key takeaways: Football industry generally exhibits high risks due to the unpredictability of sports results leading to highly volatile revenue and cash flow generation. Smaller […]
14. May 2022.

Portfolio of companies in our coverage as of May 14th, 2022

Below is the current list of companies in our coverage, with corresponding prices in Croatian kuna (kn) for each type of a report. (for a price […]
13. May 2022.

NEW SERVICE – Credit rating methodologies and/or financial statement analysis templates – Review / Development / Implementation

Does your team need a financial statements analysis template which includes best practices from leading global banks and rating agencies, and which is simple to use? […]
21. April 2022.

Credit Guide 07/22 – Financial statements analysis – How many years have to be analysed?

Once we have fully grasped a company’s operating environment and competitive position, only then we start with a financial risks analysis. This part of the analysis […]
12. April 2022.

Credit Guide 06/22: Inventory days calculation – three things to watch out for

In finance books you will most often find the following formula for the calculation of the inventory days: Inventory days = Average Inventory / COGS * […]
6. April 2022.

Credit Insights 04/22: Croatia Airlines – how long can it go?

Devastating effect of the pandemic on the CA’s operations… Airlines industry is one of the riskiest industries, even in the absence of major negative events. It […]
5. April 2022.

Credit Insights 03/22: Food retailers – the risks are on the rise

The rating universe Our portfolio of rated Croatian food retailers includes the 15 largest companies in the sector – Lidl, Spar, Kaufland, Plodine, NTL, Studenac, Tommy, […]
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