What does credit analysis typically assess?

Credit analysis primarily focuses on evaluating the creditworthiness of individuals or businesses. This process involves examining various factors such as credit history, payment patterns, income levels, existing debts, and overall financial stability. By assessing these elements, analysts can determine the likelihood that a borrower will be able to meet their financial obligations, including the repayment of loans or credit lines.

The other options do not accurately reflect the primary focus of credit analysis. While the historical performance of stock markets may provide some context about economic conditions, it is not directly related to analyzing credit risk. Compliance with regulations pertains to legal adherence rather than financial assessment, and liquidity refers to how quickly an asset can be converted into cash, which is a different aspect of financial analysis. Therefore, the assessment of creditworthiness is the central theme of credit analysis.