Traditional financial analysis teaches financial health analysis. Cash flow analysis builds on this to determine availability of funds to repay debt.
Cash, not net profits, repays loan. Since today’s loan is repaid with tomorrow’s cash, understanding the present and future cash flows of the company are key to any loan decision. It also has ramifications on loan structure and covenants.
Upon completion of the course, participants will be able to demonstrate their knowledge of the following:
- The difference between traditional and modern cash flow analysis
- How to manually do a cash flow analysis
- The primary sources and uses of cash for a company
- The relationships between the cash flow statement and the balance sheet and income statement
- How changes in a company’s working capital may be affecting its cash flow
- How to assess a company’s ability to handle debt obligations
- How to utilize both direct and indirect cash flow methods
- The nuances of automated cash flow methods
- How to prepare and analyze projections
- How cash flow can affect loan structuring
- How to use sensitivity analysis to test key variables and their effect on cash flows
Our approach is to customize all materials and case studies to reflect the lending environment actually experienced by the participant. Lecture and discussion, supplemented by group exercises and role play keep the course both fast paced and interesting.