Overview:
Learn key assumptions in a projection and how to assess validity, the value of a downside-most likely projection to stress test the assumptions
The session shows participants how to project the income statement, balance sheet and cash flow to calculate the loan amount needed to support the income statement projection and evaluate the ability of the borrower to repay the loan. How much inventory does the borrower need to stock and how much credit can the borrower extend to achieve its revenue forecast? What levels of profitability, productivity, efficiency, earning retention, and leverage are anticipated in order to estimate the loan amount needed and the asset collateral base available to repay the loan?
Why you should Attend:
The session will explain the importance of revenues in projecting financial statements and cash flow. Then the session will show participants how to project the income statement, balance sheet and cash flow to calculate the loan amount needed to support projection and evaluate the ability of the borrower to repay the loan. Evaluation of underlying assumptions include the feasibility of revenue growth rate, profitability, productivity, efficiency, earning retention, and leverage. Besides calculating the loan amount needed to support the financial projection, analysis of the asset collateral base available to support repayment will be examined.
Areas Covered in the Session:
- How revenue projection determines income statement and income statement determines balance sheet
- Critical role of working capital assets, capital expenditures and retained earnings in supporting projection
- How to generate cash flow projection with balance sheet and income statement
- How to estimate loan needed to realize financial projections
- How to underwrite loan needed to fit lending organization’s policies
- How to support loan with appropriate collateral and guarantees
Who Will Benefit:
- Credit Analysts
- Credit Managers
- Credit Risk Managers
- Risk Managers
- Enterprise Risk Managers
- Chief Credit Officers
- Senior Lenders
- Senior Lending Officer
- Bank Director
- Chief Executive Officer
- President
- Board Chairman