Credit Analysis Level 2

2 day course on Practical Credit Analysis

Objectives:

At the end of this session all delegates should be able to:

• Demonstrate the significance of revenue volatility and company dynamics
  
  
• Calculate and interpret the principal categories of ratio used in the analysis process
  
  
• Explain the meaning and significance of a company's working investment
  
  
• Be able to define and suggest a suitable measure for liquidity
  
  
• Undertake a strategic and operational analysis of a company
  
  
• Construct a company's cash flow statement
  
  
• Analyse the cash flow dynamics of a company
  
  
• Calculate a company's debt capacity

Contents:

• Ratio Analysis
• Uses and limitations
• Standard categories
• Non-standard ratios
• DuPont approach

Company Dynamics

• Revenue volatility
• Cost structures
• Operational costs
• Financial costs
• Liquidity implications
• Capital structure implications

The Operating Cycle

• Establishing the financing gap
• Calculation of working investment
• Relationship of working investment to sales
• Use as a measure of operational liquidity

Liquidity

• Definition
• Operational liquidity
• Non-operational sources of liquidity
• Key issues
• Establishing a measurement

Corporate Strategy

• The strategy concept
• Relevance for the lending banker
• Levels of analysis
• Corporate level
• Business level
• Functional level
• Some useful analytical tools

Operational Review

• Financial position
• Organisational structure
• Personnel
• Production
• Marketing
• Research and development

The Cash Flow Statement

• Background
• Reporting requirements
• Construction