Analyzing Business Cash Flow Mandatory 2 Part Series 3/16 & 3/30
This is part 2 of an in-depth series designed to increase your proficiency in the essentials of business financial analysis. Case study exercises are used throughout to reinforce the principles and techniques learned.
Learn how to calculate both a Statement of Cash Flows (SCF) and a Uniform Credit Analysis (UCA) model, plus how to use both tools to evaluate business cash flow in conjunction with traditional ratio analysis. The UCA model is an important analytical tool provided as output from business financial statement “spreading” software used for commercial and industrial (C&I) loans. This seminar demonstrates how the UCA model is derived and compares it to the SCF prepared by accountants
NOTE: For more information about Part 1, Business Financial Statement Analysis on March 2 & 9, please review the brochure for that program.
March 16 – Cash Flow Basics and Why You Need More Than Traditional Ratios
- Overview of Traditional Ratios
- Key liquidity, leverage and efficiency conclusions
- Where traditional debt service coverage ratios fall short
- Evolution of Statement of Financial Accounting Standards (SFAS) 95 and the resulting SCF, plus development of the UCA model
- The cash flow impact of efficiency ratios
- Sources and uses of cash for both SCF and UCA, plus the three main categories of cash flow
- Compare the indirect and direct methods for compiling a SCF
- Building a Statement of Cash Flows (SCF)
- Construct a SCF on the indirect method from the case study
- Construct the operating section of a SCF on the direct method as a bridge to the UCA model
March 30 – The UCA Model and Analytical Techniques
- Building, Understanding and Using the UCA Cash Flow Model
- Compare the formats of SCF and UCA
- Construct a UCA model from the case study
- Compare key subtotals between a SCF and UCA from the case study
- Three basic questions for which the UCA model provides answers
- Identify the cash flow coverage ratio components imbedded within the UCA format
- Develop the drivers of operating cash flow consistency and reliability as a source of loan repayment
- Explain the cash flow effect of capital expenditures, adjusted for related long-term financing
- Reposition distributions/dividends within the UCA format in order to improve cash flow conclusions for privately-held businesses
- Compare SCF and UCA conclusions with earlier conclusions from traditional analysis
Experienced lenders who need an update or confirmation of their knowledge and skills, lenders just beginning to focus on commercial lending, loan review personnel, credit analysts or any banker looking to significantly develop commercial credit skills will benefit. This program is also highly recommended as an introductory or refresher course for bankers planning to attend a commercial lending school.
Richard Hamm has been training bankers for more than 23 years, specializing in all phases of commercial lending and credit: portfolio and risk management, real estate, appraisals, selling and negotiating skills. He has been involved in director training, loan policy formation, bank formation and strategic planning. He owns/operates Advantage Consulting &Training after a 22-year banking career including senior positions in lending and credit.
Institute of Certified Bankers: Visit aba.com/icb/membercereview for instructions regarding self-reporting. Estimated credits: 2 hours CE credit.
Member price: $500.00 | Non member price $1,000.00
Member price: $530.00 | Non member price $1,060.00
Online: Visit the CBA Webinar Catalog
Phone: Call ConferenceEdge at (877) 988-7526 (credit card payments only)
- Preferred Payment Method: Online
- Please register online or by phone when paying with a credit card
- Payment Must Accompany Registration – Invoices are Not Provided
Register online up to day of event. Earlier registration allows time to check your computer for an optimal experience.