Thursday, June 22, 2017
12:00 pm – 1:30 pm PT
1:00 pm – 2:30 pm MT
2:00 pm – 3:30 pm CT
3:00 pm – 4:30 pm ET
Financial statement analysis assesses a borrower’s financial risk and compliance with the bank's underwriting standards. This analysis goes beyond EBITDA and evaluates operating performance and cash flow, debt repayment ability, liquidity, leverage, and profitability. It also focuses on the borrower’s risk/ability to meet cash demands within the operating cash-flow process or by using other cash resources, (i.e., investing revenue, financing resources, equity contributions, and global cash flow). The credit analyst must understand “external financing activities” – what outside sources were used and how much cash was obtained from each. This analysis determines whether a company can support additional debt.
Part 2 of this two-part series will address determining an operating entity’s ability to generate cash needed for:
- On-going operation of the business entity
- Interest payments, current year CPLTD, and shareholder dividends
- Capital spending on plant, equipment, and other fixed assets
Continuing Education: Attendance verification for CE credits upon request
- Analyzing cash flow statements, including operating performance, investments, capital spending, and external financing
- Analyzing repayment ability
- Operating entity federal tax returns, Schedule M-1: Reconciliation of Income, shareholder loans, rent, capital expenditures, etc.
- Who and how much debt to include in global debt service coverage
- Personal cash flow, including federal tax return schedules A, C, and E and pass-through income
- Stress testing
- Liquidity, leverage, and profitability analysis
- Determining whether a company can support additional debt
- TAKE-AWAY TOOLKIT
- Employee training log
- Quiz you can administer to measure staff learning and a separate answer key
WHO SHOULD ATTEND?
This presentation is for beginning, intermediate, and advanced credit staff, including credit analysts, commercial loan underwriters, commercial loan officers, loan review personnel, Loan Committee members, and credit risk management personnel.
PLEASE NOTE: Program content is subject to copyright and intended for your individual financial institution’s use only.