Projected Cash Flow, Management Assessment and the First Way Out
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In this 4th course of the Commercial & Industrial Business Underwriting Skill Series, participants will assess competitive forces, project Business Driver values, create a projected UCA cash flow statement, and identify future cash sources for servicing interest-bearing debt based on projected performance.
Certificate
1 credit or $295
Cost
1.5 - 2 Hrs.
Duration
1 hr.
Prep Time
1
Quiz
Overview
In the fourth webinar session, participants review the competitive forces at work that management must influence and control to assure sufficient profit and cash flow in servicing interest-bearing debt. Based on all the information at their disposal and an assessment of management competence, they identify the most likely projection values for the Business Drivers. They manually create a projected UCA cash flow statement using a Cash Flow Snapshot worksheet to translate projection assumptions to results. Based on the projected performance, participants identify the likely future sources of cash to service interest-bearing debt, given the loan request and associated debt service requirements.
Who Should Attend
This Course is ideal for participants currently in or aspiring to enter the following job functions:
- Credit Management
- Commercial Credit Administration
- Commercial Loan Portfolio Management
- C & I Lending
- Loan Review
- Special Assets
- Credit Analysis
Prerequisites
Some familiarity with an accrual income statement and balance sheet for a commercial business, as well as completion of prior sessions in the Credit College.
Objectives
By the end of the webinar session, participants will be able to:
- Identify management capabilities that must be in place and working effectively for a company to succeed in both good and bad times.
- Identify the competitive forces at work in the borrower's market and assess their likely impact on key Business Drivers and subsequent financial performance.
- Shape pragmatic assumptions about future Business Driver values in both a "most likely" and "worst case" projection scenario.
- Identify borrowing causes, cash repayments sources, likely repayment risks, and possible mitigants to those risks based on the projected UCA cash flow statement.
- Identify the likely amount of additional short and long term interest-bearing debt required by the borrower and compare those amounts with the borrower's requests based on the projected UCA cash flow statement.
- Determine if the borrower will satisfy both the first and second necessary conditions for business success and, if not, what limitations may be applied to assure business success based on the projected UCA cash flow statement.
Materials(access provided with registration)
- Credit Refresher on Competitive Forces and Cash flow
- Credit Refresher on Forecast Assumptions and Cash Flow
- "The Junkyard Dog" in Shockproof! 6 Essentials for Business Success in Good and Bad Times
- Financial Statements for Total Coverage, Inc.
- Transcript of Follow-Up Call on Larry Crevin
- Exercise for the Session 4 Webinar
- Webinar Presentation Slides
- Webinar Poll Questions
- Webinar Poll Solutions
- Exercise Solutions
This is Course 4 of 8 in the Commercial & Industrial Business Underwriting Skill Series
Analytical Decision Tree and the Credit Write-Up
Financial Statement Review and Ratio Analysis
Cash Flow Analysis and Borrowing Causes
Projected Cash Flow, Management Assessment and the First Way Out
Guarantor Analysis and the Second Way Out
Non-Financial Red Flags and Performance Implications
Identifying and Mitigating Repayment Risks
The Credit Write-Up Again
