Credit Risk & Cash Flow Analysis

Price category: E
Date: See Agenda
Location: Amsterdam
Duration: 4 Days
Time: 09:00 - 17:00
Language: NL / EN
Lecturer(s): Erik de Jong

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 staff to do their job efficiently and thoroughly.

Learning objectives:

After finishing the programme, all participants should be able to:
• Systematically determine the operating and financial strength of a specific borrowing 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 the level & 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 proposing
  and discussing a strategy when a borrower is facing potential future financial difficulties 
• Give concise and clear conclusions and recommendations to credit committees/management

Target group:

• 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. Max. 15 participants.

Methodology:

This course is designed to give an understanding of 

• The morning session of Day 1 will be used to refresh knowledge, especially about cash flows.
  Thereafter, each morning and afternoon session will be spent on a case, applying a five-step learning process:

  1. Introduction in the virtual classroom (max. 15 participants)
  2. Read and consider each case on your own in a virtual break-out room (=teams of +/- 5 participants)
  3. Share your ideas with your team and resolve areas of uncertainty
  4. Discuss the case in the class
  5. Reflect on how your initial ideas changed. The trainer can be contacted any moment of the day.

                                                    

 

Content:

• 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
   • Parent/subsidiary issues and structure risks
   • Assessing a risk rating by hand (=not by computer

DAY 1
 • The toolbox
    A practical analytical framework and a 10-step approach
 • Cash flow analysis
    Calculating & analysing cash flows and identifying warning signals
 • Measuring the debt burden and liquidity
    How to do it properly
 • Industry analysis and “Product Life Cycle " Cash Flows”
    The impact of the type of business on future cash flows
 • Case “A profitable retailer going bankrupt”   
    What went wrong?

DAY 2
 • Financial projection “Back to the Future”
    We go back in time and find a solution to 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?
 • Maintaining an efficient credit process
    Writing tips & efficient co-operation
 • 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 Organization & Aggressive Management”
    Is the management reliable?
 • 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 exercise & Credit Committee Simulation
 • Conclusions & Evaluation
    Your findings

Extra:

VAT is not applicable on Investment Academy training

Special Remarks:

The program can be tailored to your wishes
Additionally, we can provide all candidates with the opportunity to participate in pre-tests or a final exam in order to get certified. 

A Credit Committee Simulation can be organized, where managers from your institution can play an active role

 

 

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