This course is for all analysts and lenders who require advanced credit analysis tool and techniques in assessing risk, identifying useful covenants, and establishing loan structure.
Reinforce the analytical tools and techniques addressed in the prior advanced workshops by application of these tools and techniques to sets of projected financial statements provided by company management;
Determine the appropriate position on the Risk Grid for a borrower based on an comprehensive analysis of its projected financial statements, as well as assess the validity of the underlying Business Driver assumptions that explain the projected financial results;
Identify the competitive forces at work in a specific industry and assess the likely impact on specific Business Drivers and the ripple effect on a company’s future operating and cash flow performance;
Identify the management essentials in place and working effectively and the likely impact of their presence or omission on the company’s ability to achieve its financial projections;
Identify the proper loan facilities to match the borrowing causes and determine the appropriate loan structure and repayment terms to accommodate risk and match company cash flow; and
Identify appropriate loan covenants to address relevant risks to the sources of repayment and, using all available hard and soft data, including non-financial red flags, determine the conditions under which the loan requests would be recommended for approval.
Course
Materials
Note on Assessing Management and Projecting Cash Flow
Comment on Loan Structure and Risk Assessment
Credit Refresher on Loan Structure and Bad Deals
Financial Statements for
Benson Manufacturing,
Inc.
Loan
Officer Summary for Benson
Manufacturing, Inc.
Loan
Officer Memorandum for
Benson Manufacturing,
Inc.
Selected
Risk Measures for Benson
Manufacturing, Inc.
Financial Statements
for Sandover Contractors,
Inc.
Loan
Officer Summary for Sandover
Contractors, Inc.
Loan
Officer Memorandum for
Sandover Contractors,
Inc.
Selected
Risk Measures for Sandover
Contractors, Inc.
Written Exercise Set
Online Review Quizzes
Written and Audio Solution Set
Online Credit Skills Proficiency Exam
Upon
Completion
Participants who successfully complete the workshop, including completion of all review quizzes and the final proficiency exam, will be able to:
Analyze management prepared projections to determine the projected EBITDA%, net profit, and net profit margin (after necessary adjustments for distributions and withdrawals), projected Net Cash Income, projected Sales Neutralized Net Cash Income, and projected debt capacity;
Understand projected borrowing causes and projected sources of cash to meet financing requirements and assess shifts in risk profiles depending on a borrower’s prospects for achieving projections;
Understand the competitive forces, using Michael Porter’s framework for assessment, and examine their likely impact, and the severity of their likely impact, on critical Business Drivers for a borrower;
Understand the handful of essential management capabilities that must be in place and working effectively to assure business success by combating the competitive forces and countering the emergence of non-financial red flags;
Understand relevant loan covenants and examine and assess proposed loan structures for proposed credit facilities; and
Reach conclusions about relative risk profiles and prospects for business success based on a combination of financial and non-financial factors, forces, and assessment.
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