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Target Audience
This course is for all analysts and lenders who require advanced credit analysis tool and techniques in assessing risk and establishing loan structure.
 
 

Level III

311 Financial and Non-Financial Red Flags
321 Profitability and Cash Flow
331 Sales Growth and Borrowing Causes
341 Operating Profit and Debt Capacity
351 Management Assessment and the Credit Decision
 
 
   
Course Objectives
Quantify the cash impact of sales growth or decline in arriving at an estimate for business cash flow absent the positive or negative impact of sales growth or decline;
Understand how to interpret and use the UCA cash flow statement adjusted for the cash impact of sales growth or decline in the process of assessing risk;
Quantify the cash impact of changes in EBITDA%, accounts receivable days, inventory days, and accounts payable days;
Use the cash impact of sales growth or decline and the cash impact from movements in EBITDA% and movements in the critical turnover ratios to precisely identify the reasons for an operating cash flow deficit and the need for associated financing;
Examine the beneficial cash impact from freezing the financing gap for growing companies and, therefore, appreciate the critical importance of effective balance sheet management; and
Examine possible loan covenants that, if honored, would assure a borrower's cash revenue, absent the cash impact of sales growth or decline, would be sufficient to pay interest expense and repay long-term debt as scheduled.
6 CEUs
Course Materials

Note on Cash Impact and Risk Assessment
1999 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.

1999 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.
Exercise Set (downloaded from Shockproof! Training website)
Online Review Quizzes
Solution Set (downloaded from Shockproof! Training website)
Access to the Shockproof! Training Resource Center
Inclusion in the Shockproof! Training Discussion Forum
Online Credit Skills Proficiency Exam
Upon Completion

Participants who successfully complete the workshop will be able to:
Quantify the expected cash impact of sales growth or decline; and adjust Net Cash Income for the expected cash impact of sales growth or decline in establishing a better measure of cash flow from business operations;
Quantify the actual cash impact from movements in EBITDA% and from movements in accounts receivable, inventory, and accounts payable days;
Identify whether operating cash flow deficits result from sales growth, poor income statement management, poor balance sheet management, or from some combination of these three considerations;
Use a refined measure of business cash flow to more accurately establish a company's risk profile and position it on the Risk Grid;
Examine the financing gap and assess the importance of stabilizing the financing gap in generating sufficient cash flow from business operations to pay interest and repay debt as scheduled; and
Identify covenants that would provide maximum assurance that a borrower generates positive cash flow from business operations, absent the cash impact of sales growth or decline, if honored.
Pricing and How to Order