Overview
Each of the eleven Self-Study courses, grouped into brief reviews, expanded analysis, and comprehensive assessments, includes website access information, background reading materials, case materials, implementation instructions, online testing to establish certification as well as email support to resolve technical issues, clarify procedures, or resolve credit issues.
Overview
Quick Hits are focused reviews of critical credit issues based on a specific Credit Refresher, which is a two or three page document.
Overview
A Webinar is a 105-120 minute case-based examination of a specific credit analysis topic.
Each of the 27 Webinars, grouped into ten generic categories, include background reading materials, case materials, a multi-step exercise, presentation slides, poll questions conducted during the Webinar, a live question and answer session at the close of the Webinar, written solutions, and an optional 10 question multiple-choice quiz following the Webinar to establish certification.
| # | Name | Type |
| 1. | Participants examine the analytical focus and content of the credit write-up, or underwriting memorandum, with special emphasis on the four fundamental issues that must invariably be addressed and assessed in every credit write-up - the borrowing causes, the source of cash to service debt, the relevant risks to each cash source of debt service, and mitigants to the risks. In addition, they examine the use of specific analytical tools and techniques - with specific emphasis on the Uniform Credit Analysis (UCA) cash flow statement - and the application of specific loan covenants in effectively assessing each of the fundamental issues. Tags | Webinar |
| 2. | Participants review the reporting conventions, e.g., financial year-end dates, which must prevail for the creation of a global cash flow statement, then explore cash flows among and between related companies with common ownership and among and between the companies and the owners. They construct a global cash flow statement under various assumptions about a guarantor's financial contribution and support, including future support based on personal cash flow and personal liquid assets. Participants examine the impact on the global cash flow statement from limitations imposed on cash outflows from one or more related companies to the guarantor. They assess an analytical process that features highly liquid personal assets as the best estimate of guarantor financial support in a crisis in constructing and using the global cash flow statement in the credit decision process. Tags | Webinar |
| 3. | Participants explore the business forces that drive and determine changes in working capital. They examine whether changes in working capital provide clear signals about a borrower's ability to service interest-bearing debt from operating cash flow. They identify the underlying reasons for changes in working capital, e.g., an increase in profitability or an increase in long-term liabilities, and their impact on a borrower's operating cash flow. Further, Participants explore the conflicting signals about operating cash flow from changes in working capital accounts on the Uniform Credit Analysis (UCA) cash flow statement. They assess the predictive usefulness of changes in working capital about subsequent operating cash flow and explore the proper use of both working capital analysis and UCA cash flow analysis in fully understanding the source of cash to service interest-bearing debt. Tags | Webinar |
| 4. | Participants review three common measures of stress on net operating income that an income producing property must successfully withstand in order to service the property's interest-bearing debt from property cash flow. They examine break-even estimates using both "stabilized" and existing NOI values and draw various conclusions about the use and limitations of break-even analysis. In addition, Participants examine the importance of existing net operating income - in contrast to stabilized net operating income - in properly servicing interest-bearing debt. Further, they review the use and application of the debt service constant in computing annual debt service as well as identifying the maximum amount of term debt that can be supported by an income producing property's cash flow. Tags | Webinar |
| 5. | Participants explore the differences between standard accrual accounting, not-for-profit accounting, and fund accounting, including differences in terminology, format, and analytical content. They examine the fund accounting "income statement" and identify its similarities to a fully cash-based income statement as well as its differences from a standard accrual income statement. Further, Participants review the fund accounting "balance sheet" and identify its similarities and differences vis-a-vis a standard accrual balance sheet. In addition, they explore an analytical process for using both fund accounting and accrual accounting financial statement information in assessing governmental activities as well as specific business-type activities within the broader municipality. Tags | Webinar |
| 6. | Participants develop a framework for identifying the minimum financial information for a business borrower and guarantor necessary for making a credit decision. They determine the minimum number, and acceptable quality, of financial statements required to assess a borrower's historical profitability and cash flow performance. They identify the fatal flaws in borrower financial statements that preclude a useful analysis of borrower profitability and cash flow performance. Further, Participants explore the usefulness of the Uniform Credit Analysis (UCA) cash flow statement in overcoming a set of common deficiencies in the quality of borrower financial statements. In addition, they identify the minimum financial information for a guarantor necessary to determine the guarantor's dependency on company cash flow and his or her ability to provide financial support to the company in a financial or cash flow crisis. Tags | Webinar |
| 7. | Participants explore risk issues emerging from the comprehensive financial reports for the City of Calistoga, California and the City of Central Falls, Rhode Island. They focus on and assess a) trends and developments in revenue streams, expense categories, and bottom line "profits" and b) cash and near-cash flow statements for governmental and business-type activities. Participants identify the difficulties that confront analysts and lenders in assessing municipal activities reported on a fund accounting basis and business-type activities reported on an accrual accounting basis. Further, they examine the impact of GASB 68 implementation on reported operating results and balance sheet obligations. Tags | Webinar |
| 8. | Participants explore the similarities and differences in not-for-profit and standard accrual accounting. They examine the issue of restricted and unrestricted assets and their respective impact on ratio and cash flow analysis. They assess the benefits of applying specific performance ratios and the Uniform Credit Analysis (UCA) cash flow statement in assessing not-for-profit risk. Finally, they review and identify critical considerations in projecting not-for-profit performance. Tags | Webinar |
| 9. | Participants review the mechanics and interpretation of financial projections under two different scenarios. In the first scenario, a borrower's projected income statement, balance sheet, and cash flow are identical to its income statement, balance sheet, and cash flow in the last historical period - except for proposed new debt. In the second scenario, a borrower's project financial and cash flow results are based on a continuation of the borrower's last actual values for its Business Drivers, i.e., last year's actual values for sales growth, gross margins, operating expenses as % of sales, accounts receivable days, etc. Participants review and examine the differences in the projection results under these two scenarios. They explore the reasons for the differences and assess the benefits and limitations of the two scenarios in providing a realistic estimate of future cash flow and debt coverage absent any input from company management. Tags | Webinar |
| 10. | Participants incorporate soft data assessment into shaping "most likely" and "downside" projection assumptions for the Business Drivers. Using the last actual values for the Business Drivers, e.g., last year’s sales growth, gross margins, operating expenses as % of sales, accounts receivable days, etc., as the basis for projections, they examine all available information about management targets, competitive forces, and management competence in identifying compelling reasons to alter last actual values in the projection period. They assesses the results of a "most likely" or baseline projection scenario to identify a) borrowing causes, b) cash sources of interest-bearing debt service, c) the financing requirement or surplus, and d) the sources of cash to meet a financing requirement for a borrower or prospective borrower. Participants repeat the process for a "downside" projection scenario in which available soft data suggests further adjustments in an unanticipated crisis for one or more of the "most likely" Business Driver assumptions. Tags | Webinar |
| 11. | Participants identify and explore the role and purpose of common commercial loan documents as well as examine the use and applications of UCC-11 information requests, UCC-1 financing statements, blanket liens, and continuing commercial guarantees in which an out-patient surgery center - one of numerous related parties - provides the focal point for pursuing all webinar issues. In addition, Participants address the relative importance of assessing cash flow from business operations versus cash flow from liquidation of business collateral in assuring proper debt service and ultimate loan repayment. Tags | Webinar |
| 12. | Participants identify and explore the role and purpose of common commercial real estate loan documents for an income producing property, including mortgages and deeds of trust, assignment of rents agreements, environmental risk questionnaires, estoppel certificates, lease agreements, and subordination, non-disturbance, and attornment agreements in which a pending purchase of an office building provides the focal point for pursuing all webinar issues. In addition, Participants address the relative importance of assessing property cash flow versus cash flow from property liquidation in assuring proper debt service and ultimate loan repayment. Tags | Webinar |
| 13. | Participants examine the events that generate balances in two special accounts - cost and profits in excess of billings and billings in excess of cost and profits. In addition, Participants explore the role of the contract status report and the manner in which the report supports and ties back to the accrual financial statements. Further, they review the computation of numerous critical amounts recorded on the contract status report for both complete and incomplete contracts, such as a) earned revenue, b) actual cost-to-date, c) total cost anticipated, d) over / underbillings, e) percent complete, f) gross profit percent, and g) gross profit amount. Tags | Webinar |
| 14. | Participants explore the use of customary performance ratios, complemented by messages from the Uniform Credit Analysis (UCA) cash flow statement, to assess borrower risk and shifts in a borrower's risk profile. In addition, they examine and assess information in year-end and interim financial statements and contract status, or work in progress, reports to identify trends and developments that signal likely future financial and cash flow results for a borrower. Tags | Webinar |
| 15. | Participants examine the construction and use of the Uniform Credit Analysis (UCA) cash flow statement for borrowers with income statement and balance sheet accounts that require considerable review and assessment in classifying accounts as operating events, investing events, related party events, or financing events. They identify the misleading risk messages that can emerge should critical accounts be improperly classified - or improperly spread in a financial analysis software system - and assess the possible impact on a credit decision. Tags | Webinar |
| 16. | Participants explore and master the methodology for computing the dollar amount of cash inflow or outflow from sales growth and from changes in EBITDA%, accounts receivable days, inventory days, and accounts payable days. In doing so, they confirm and clarify the operating borrowing causes suggested in the Advanced UCA Cash Flow: Part I of II webinar and more closely identify the areas of management strengths and weaknesses in controlling a company's cash flow from operations. Tags | Webinar |
| 17. | Participants identify the differences in the primary sources of hospital revenue across the three hospital categories. They examine the critical role of uncompensated care and payer mix in explaining bad debt provisions, write-offs, and bottom line results. Further, Participants explore the use of cash flow statements in confirming the sources of interest-bearing debt service implied by income statement information. In addition, they address the role of hospital location in determining payer mix and associated financial performance and review the importance of relative bargaining power vis-a-vis buyers and suppliers. Finally, Participants identify the array of management competencies that appear necessary for success in an industry highly regulated and subject to continuous federal and state legislation. Tags | Webinar |
| 18. | Participants review the generally accepted definition of each of the five Cs of credit - capacity, capital, character, collateral, and conditions. They examine the various measures lenders use in assessing a borrower's ability to honor each of the five Cs, such as the use and application of a) traditional cash flow or b) the Uniform Credit Analysis (UCA) cash flow statement in assessing a borrower's capacity to meet its interest-bearing debt service. Further, Participants explore the likely different outcomes in supporting or denying a commercial business loan request that result from applying different measures within one or more of the five Cs of credit. In addition, they identify those Cs of credit, which are based primarily on objective data and interpretation and those that are based primarily on subjective data and interpretation. Finally, webinar Participants explore the critical importance of "character" in any credit assessment and the perils of extending credit if doubts about a borrower's "character" exist - especially in bad times. Tags | Webinar |
| 19. | Participants explore risks associated with overlooking the role and impact of distributions and withdrawals in assessing borrower profitability and business cash flow for non-Subchapter C companies. In addition, they examine risks associated with limiting cash flow analysis to traditional cash flow - net income + non-cash charges - thereby ignoring the impact of changes in balance sheet accounts on a borrower's ability to service its interest-bearing debt from business cash flow. Further, Participants address risks associated with use of unadjusted business income tax return information in conducting ratio and cash flow analysis. Finally, they review and examine the importance of fully incorporating the balance sheet into commercial business analysis using accrual financial statements rather than business income tax returns. Tags | Webinar |
| 20. | Participants examine the role of ratio and cash flow analysis in assessing medical practice financial performance. They explore the importance of location and the associated payer mix. They address the issues of technology and the costs and benefits to a medical practice's bottom line from implementation of specific technology requirements. In addition, Participants examine the importance of management capabilities in a highly regulated industry. They review the benefits and and limitations of capitation. Further, they assess the extent to which the healthcare industry is subject to continuous changes and alterations to payment patterns and performance measures that impact bottom line performance. Tags | Webinar |
| 21. | Participants identify a handful of key performance ratios among the vast array generated by computer output that explain the accrual and cash position of a business so that they may better use their time in assessing the core issues that determine borrower profitability and business cash flow. They explore the impact of movements in these key performance ratios - the Business Driver performance ratios - on borrower profitability, retained earnings, and business cash flow. In addition, they examine the relative role and importance of each Business Driver performance ratio in explaining bottom line profit, business profit, business cash flow, changes in working capital, and changes in leverage. In the process of doing so, Participants review the Uniform Credit Analysis (UCA) cash flow statement and identify the reasons its debt service messages may differ significantly from those based on cash flow proxies such as traditional cash flow. Tags | Webinar |
| 22. | Participants identify those documents that report the cash exit routes - or cash outflows - from pass-through entities, such as Subchapter S corporations and partnerships, to owners and partners. They identify cash flow escape routes via a company's inability to effectively manage its accounts receivable, inventory, accounts payable, and accrued liabilities, i.e., its operating balance sheet accounts. In addition, Participants examine the benefits and limitations of debt service coverage covenants based on cash flow proxies - traditional "cash flow" and EBITDA - in controlling the cash exit routes. Further, they explore the benefits and limitations of cash flow covenants based on Net Cash after Operations, a key summary account in the Uniform Credit Analysis (UCA) cash flow statement, in controlling all company cash outflows. Finally, they assess the benefits of two specific debt service coverage covenants that, in combination, work to control the cash exit routes and the operating cash outflows. Tags | Webinar |
| 23. | Participants explore the concept of debt capacity and its importance in assessing a borrower's prospects for properly servicing its interest-bearing debt. They identify the roles of dividends, distributions or withdrawals, income taxes, and loans to owners or partners in arriving at an estimate of existing and prospective debt capacity. In addition, Participants determine reasons for apparent conflicts between debt capacity estimates and actual operating cash flow. They review the importance of quality financial information in validating debt capacity estimates and they identify the range of corrective measures available to both borrower and lender should a borrower's debt capacity fail to support outstanding, or proposed, interest-bearing debt. Tags | Webinar |
| 24. | Participants review the two necessary conditions for business success - sufficient debt capacity to service interest-bearing debt and sufficient operating cash flow to meet debt service. They examine the four quadrants in a risk grid that designate the possible combinations of these two necessary conditions for business success. They identify the significance of each quadrant in establishing a borrower's risk profile and signaling satisfactory or disturbing financial performance on the part of the borrower. Further, Participants apply the risk grid concepts and methodology in tracking a borrower's movements among and within risk grid quadrants over annual and interim time periods. In doing so, they identify the underlying reasons that determine risk grid movements from period to period. Finally, they assess trends and developments, particularly in interim periods, in anticipating likely future loan performance. Tags | Webinar |
| 25. | Participants review the four essential analytical issues that must be addressed and resolved in every credit write-up. They examine the role of descriptive, or factual, statements and the necessity of verifying the significance of such descriptive statements in addressing and resolving one or more of the essential analytical issues. In so doing, Participants address the limitations of "elevator analysis" and trace the path from a descriptive credit write-up to an analytical credit write-up in which both description and analysis play their respective roles. In addition, they focus on the importance of selecting only relevant descriptive information for inclusion in a credit write-up as well as properly identifying the significance of such descriptive information. Tags | Webinar |
| 26. | Participants review the basic objective of spreading financial statements in a software system and, in so doing, explore the necessity for everyone involved in the spreading process to be fully informed about the risk indicators used by their institution in reaching a credit decision and the required computational methodology for each such risk indicator. They focus on the more common errors in spreading income statement and balance sheet information and the possible impact of these errors on a range of risk measures. Further, Participants examine the importance of properly reconciling changes in net worth or partners' capital. In addition, they identify various pitfalls from insertion of new accounts into the software system's default set of accounts as well as examine the importance of matching financial statement terminology with the software system's account terminology. Tags | Webinar |
Overview
Commercial Business Underwriting steps through the entire analytical process for a commercial credit decision. At the end of the eight online sessions, participants will know precisely how to sort through and analyze company background information and financial statements, assess management and the competitive environment in which it operates, project likely financial performance, identify sources of cash to meet debt service, identify risks to those cash sources, consider covenants to mitigate the risks, and present their conclusions and recommendations in a generic credit write-up format.
Overview
Commercial Real Estate Underwriting steps through the entire analytical process for a commercial real estate credit decision following the analytical sequence emphasized by the regulators in their October 30, 2009 policy statement. At the end of the eight online sessions, participants will know precisely how to assess the borrower, the guarantor, and the property - including the application and use of global cash flow techniques - and present their conclusions and recommendations in a generic credit write-up format.
Overview
Credit Basics examines the use and application of the analytic tools and techniques required to determine if a loan request qualifies for further analysis and assessment. At the end of the four online sessions, participants will understand the difference in business organizations, the role that distributions and loans to owners play in the analytical process, the computation and interpretation of key performance ratios, the use and limitations of cash flow proxies and the Uniform Credit Analysis (UCA) cash flow statement, and the impact management competence and expertise exert on a company's performance.
Overview
Accounting Essentials explores the fundamental and essential concepts and principles of accrual accounting. At the end of the four online sessions, participants will understand financial statement structure and composition, double entry accounting, the accounting equation, debits and credits, critical accounting principles, the effect of improperly recorded transactions, and the generation of the balance sheet and income statement from a series of recorded transactions over a finite time period.
Overview
Using Federal Tax Returns for Ratio and Cash Flow Analysis explores in detail the form and content of business and personal income tax returns, the role of the Section 179 Deduction, the information content of Schedule K-1, the construction of personal cash flow statements, the information content of Schedule M-1, the construction of key performance ratios, and the construction of cash flow proxies and the Uniform Credit Analysis (UCA) cash flow statement. At the end of the eight online sessions, participants will know how to properly compute key performance ratios, cash flow proxies such as traditional cash flow and EBITDA, and the Uniform Credit Analysis (UCA) cash flow statement from information in federal income tax returns.
Overview
Using Cash Flow Statements and Proxies for Risk Assessment examines the ability of cash flow statements – the Uniform Credit Analysis (UCA) cash flow statement and the FASB 95 statement of cash flows - and cash flow proxies - traditional 'cash flow' and EBITDA - to properly identify the four fundamental issues that must be addressed in every credit request:
- The borrowing causes.
- The cash sources of interest-bearing debt service.
- The financing requirement.
- The sources of cash used by the company to meet its financing requirement.
At the end of the four online sessions, participants will understand the benefits and limitation of each cash flow statement and cash flow proxy in resolving each of the fundamental issues based on historical financial information. In addition, participants examine the process of shaping pragmatic forecast assumptions, which includes an assessment of management competence and competitive forces, in constructing cash flow projections that address the four fundamental issues.
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