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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
Reinforce the analytical tools and techniques addressed in the prior four workshops by application of each to sets of projected financial statements provided by company management;
Determine the appropriate position on the Risk Grid for a company 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.
15 CEUs
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
1999 Actual and 2000 Projected 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 Actual and 2000 Projected 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:
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;
Identify 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;
Identify 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;
Identify, review, and examine a 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;
Identify 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.
Pricing and How to Order