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| Overview |
| This two-day seminar is for all analysts and lenders who require advanced credit analysis tools and techniques to properly compute business profit, properly compute business cash flow absent the cash impact of sales growth or decline, assess the likely impact of competitive forces on borrower Business Drivers, assess management’s ability to neutralize key competitive forces and the possible emergence of non-financial red flags, determine the appropriate loan structures based on projected borrowing causes, identify relevant mitigants to cash repayment sources, and provide sufficient analytical evidence to support a request for loan approval. |
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| 15
CEUs |
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| Seminar
Objectives |
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Review the computation methodology, compute, and examine historical and projected financial performance ratios in reaching a tentative conclusion about a borrower’s ability to meet the first and second necessary conditions for business success; |
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Review the computation methodology, compute, and examine historical and projected Uniform Credit Analysis (UCA) cash flow statements to verify whether a borrower will meet the first and second necessary conditions for business success, if actual performance matches projected performance; |
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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; |
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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; |
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Review the computational methodology, compute, and examine a guarantor’s personal cash flow statement, as well as identify the guarantor’s dependency on business cash sources to support the guarantor’s lifestyle and personal debt obligations; |
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Examine information in the personal cash flow statement as well as information in the guarantor’s personal financial statements to determine the financial value of the guarantee and likely ready cash available from the guarantor in a business cash flow crisis; |
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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 |
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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. |
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| Seminar
Materials |
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Shockproof! 6 Essentials for Business Success in Good and Bad Times
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Comment on Loan Covenants and Risk Assessment
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Comment on Loan Structure and Risk Assessment
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Credit Refresher on A Cash Flow Snapshot |
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Credit Refresher on Accounting Profit and Business Profit |
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Credit Refresher on Distributions and Income Taxes |
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Credit Refresher on Guarantors and Personal Cash Flow |
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Credit Refresher on Non-Financial Red Flags |
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Credit Refresher on Sales Growth and Borrowing Causes |
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Credit Refresher on Shareholder Loans and Cash Flow |
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Actual and Projected Financial Statements for Benson Manufacturing, Inc. |
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Loan Officer Summary for Benson Manufacturing, Inc. |
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Loan Officer Memorandum for Sandover Contractors, Inc. |
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Selected Risk Measures for Sandover Contractors, Inc. |
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Exercises |
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Solutions |
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Optional Online Proficiency Exam |
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Completion |
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Participants who closely follow the instructor’s presentation and carefully review the written solutions will be able to:
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Understand how to compute and analyze key financial performance ratios, after necessary adjustments for distributions and loans to owners, to assess the prospects the borrower will meet both the fist and second necessary condition for business success in the projection period; |
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Understand how to compute and analyze the projected UCA cash flow statement, after necessary adjustments for distributions and loans to owners, to verify whether the borrower will meet both the first and second necessary condition for business success, if actual performance matches projected performance; |
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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; |
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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 and, therefore, on projected performance; |
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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; |
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Understand the dependency of a guarantor on business cash sources to support the guarantor’s lifestyle and personal debt obligations and the resulting financial value of the guarantee and likely ready cash available from the guarantor in a business cash flow crisis; |
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Understand relevant loan covenants and examine and assess proposed loan structures for proposed credit facilities; and |
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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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| Contact Us for information about scheduling an on-site Seminar. |
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