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.
Explore the factors that drive and determine the amount of short and long-term interest-bearing debt that a company can support from operating profit and cash flow;
Estimate the dollar amount of short-term interest-bearing debt a company can support from operating profit and cash flow in the absence of long-term interest-bearing debt;
Estimate the dollar amount of short-term interest-bearing debt a company can support from operating profit and cash flow for a fixed amount of long-term interest-bearing debt;
Estimate the relative and absolute dollar amount of deterioration in operating profit that a company can suffer before its debt capacity falls below interest-bearing debt outstanding;
Examine and identify the differences between estimated debt capacity and the use and application of a borrowing base in setting limits to short-term debt outstanding; and
Examine possible loan covenants that, if honored, would assure a borrower has sufficient operating profit and cash flow to properly service all short and long-term interest-bearing debt.
Course
Materials
Note on Estimating
Debt Capacity in Assessing
Risk
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:
Understand the factors that determine the debt capacity of a company and the manner in which changes in each factor impact resulting debt capacity;
Quantify the debt capacity of a borrower under various conditions in which the relationship between short and long term debt vary dramatically;
Calculate the degree of stress or deterioration in operating profit that a borrower could suffer before it can no longer support its interest-bearing debt;
Calculate the degree of stress or deterioration in balance sheet management that a borrower could suffer before it exhausts existing debt availability;
Understand the relationship between current or projected cash flow from business operations and underlying debt capacity; and
Understand the necessary elements in a debt service covenant that would provide maximum assurance a borrower will generate sufficient cash flow from business operations to fully service all interest-bearing debt.
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to Order
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