June 1st & 2nd    Fee: $400 per attendee

June 1st: Agenda

The Financial Analysis Process

Structure of the Income Statement & Balance Sheet

Financial & Accounting Terms

Key Factors Affecting Revenue, Costs & Income

Cash Vs Accrual Accounting

Evaluating the Quality of Financial Statements

Reconciling Net Worth

Determining NOI & DSC for CRE Loans

Sole Proprietorship (Schedule C) Cash Flow Analysis

Global Cash Flow Analysis of a Sole Proprietorship

An ideal seminar for those attendees new to the credit function that lack the confidence in reviewing financial statements and performing a credit analysis.  Beyond the basics of financial analysis, the training focuses on the process of conducting an analysis.  Case study for the seminar allows attendees to develop  Global Cash Flow for a sole proprietorship business owner.  Essential training for new credit analysts, small business lenders & commercial lenders.  

 Who should attend?
New credit analysts, small business lenders, commercial lenders or anyone inexperienced in analyzing financial statements or reviewing tax returns of a business owner.  Case study for the seminar allows attendees to develop  Global Cash Flow for a sole proprietorship business owner.

Seminar Topics 

• The Financial Analysis Process : The Steps in Performing a Credit Analysis.

• Understanding the Key Accounting & Financial Terms found in Financial Statements.

• Sources of Information for Performing a Credit Analysis.

• Basic Structure of the Income Statement and Balance Sheet

• Analyzing the Income Statement:  Identifying the Key Accounts.

• Operating Factors Affecting Revenue, Costs and Income.

• Recognizing the Differences between Cash Basis and Accrual Accounting.

• Analyzing the Balance Sheet: Estimating Liquidity, Capacity and Leverage.

• Reconciling Net Worth 

• Identifying Contingent Liabilities of a Business.

• Evaluating Compiled, Reviewed and Audited Financial Statements.

• Determining Net Operating Income and Debt Service Coverage for a CRE Property.

Case Study:
Using a business owner’s personal financial information and their federal tax 1040 tax return with schedule C & E, we determine Global Cash Flow. We judge  the ability of the business owner to service a proposed real estate loan. 

June 2nd: Agenda

Commercial & Industrial (C & I ) Lending

Analyzing Financial Ratios

Cash Flow Coverage Analysis

Estimating Working Capital Requirements

S-Corporation Tax Return Analysis
Evaluating & Determing Eligible Receivables

Evaluating & Deteming Eligible Inventory



 Our series continues with training on how to use and properly interpret the key quantitative tools of financial analysis.  Special emphasis in the seminar is devoted to analyzing a Commercial & Industrial (C & I)loan.  Working within a cash study, attendees  calculate & analyze the financial ratios, cash flow coverage and working capital requirements of a commercial borrower.  Attendees learn how to derive cash flow from the federal tax return and related schedules of an S Corporation.

Case Study

Attendees analyze a loan request for an owner occupied commercial real estate loan and a working capital line of credit.  Working within a case study, attendees learn how an analyst and/or lender would obtain, process and analyze key financial information.  How to generate a set of key questions and determine the primary strengths and weaknesses of the commercial borrower.

Financial Ratios

Participants learn howto calculate and properly interpret the borrower's key financial ratios covering profitability, liquidity, leverage and debt service coverage, including;

• Return on Sales
• Return on Equity
• Return on Assets
• Current Ratio
• Quick Ratio
• Debt to Worth
• Cash Flow to Current Maturities
• Dividend/Distribution Payout
• Average Age of Acccounts Receivable
• Average Age of Accounts Payable
• Inventory Turnover
• Total Asset Turnover



 Cash Flow Analysis

Using the borrower's 1120S (S Corporation) federal tax return, Schedule L, M-1, M-2 and K-1, attendees construct a cash flow statement, evaluate projections and analyze the borrower's capacity to service debt.  Emphasis given to factors that could impact the global cash flow and debt service capacity.