Description
Introduction
Banks play a crucial role in allocating financial resources. Many companies in a country are dependent on the loans and credit facilities that banks provide. Meeting the demand of these companies for financial resources in a sustainable way will support social and economic developments. The workshop is intended to help future and current loan providers, investors and credit analysts to do their job efficiently and thoroughly.
Objectives
After finishing the workshop, the participants should be able to:
- Systematically determine the operating and financial strength of a specific borrower (a company). Linking operational and financial issues gives a strong analysis and protection against unreliable financials and weak business plans. Finally the participants will be able to judge level and predictability of future cash flows and to assess a risk rating by hand.
- Help the borrower to set reasonable goals in terms of financial condition and growth and using a strategy when a borrower is facing financial difficulties.
- Give concise and clear conclusions and recommendations to credit committees/management.
Programme
Our goal is to judge the level & stability of future cash flows of a company and to assess its creditworthiness. The following subjects are needed to make this judgment and will be covered in the workshop:
- Identifying warning signals in the cash flow statement
- Measuring the debt burden
- Judging liquidity
- Preparing a financial projection to assess future cash flow quality
- Drafting an industry analysis
- Assessing management quality and reliability of financial information
- The impact of the corporate strategy and business plans
- Assessing a risk rating by hand (= not by computer)
WHEN IS THE WORKSHOP NOT USEFUL?
Cases about small, medium-sized and big companies are part of the program. The lessons learned are NOT useful to analyse every small/micro companies, financial institutions and commodity traders.
DAY 1
The Toolbox
A practical analytical framework for credit analysis that includes analytical tools and technicques
Cash flow analysis
The importance of cash flows, calculating cash flows and identifying warning signals
Debt burden and liquidity
Refreshing this part of financial analysis as well
Industry analysis and "Product Life CycleóCash Flows"
Two useful tools to assess the Business Risks, which is part of the operating strength of a company
Case "A profitable retailer still going bankrupt"
What went wrong?
DAY 2
Financial projection "Back to the Future"
How to make a financial projection: we go back in time and find a solution on how we could avoid the bankruptcy of the retailer.
Bad Loans: Voluntary Debt Restructuring
The World Bank & U.N. about out-of-court debt restructuring, discussions
Case "A Wholesaler with a Need for Growth"
Will its strategy actually work?
Management's Attitude & Reliability of Financials
Learning an easy and effective tool to assess these items & warning signals
DAY 3
Case "Company Easy Bikes Ltd. is being sold"
Are the financials reliable? What do you think about the business risks? Are the owners "on the hook"?
Maintaining an efficient credit process
Writing tips& how to co-operate
Case "Engineering & Agriculture"
Do we accept this new customer?
Case "Technological Disruption in the Car Industry"
What is the impact on two selected companies?
DAY 4
Case "A Franchise Organisation & Aggressive Management"
Find the warning signals
Parent/subsidiary issues and structural subordination
Theory & small exercises about analysing our priority of claim to the borrower
Case "Change of Ownership of a Transport Company"
Group exercises & presentations to the Credit Committee
Conclusions and Evaluation
Your findings
Target Audience
The workshop is created for professionals involved in extending and monitoring business loans and who are interested in tricks and tips to improve their efficiency. Both senior and junior staff will enjoy the real-life examples and the lively discussions. It is exciting and fun.
Prerequisites: knowledge about the basics of accounting.
Modalities
Exam
No exam is available for this course.
Contact
For further questions please contact our partner in your country