This workshop is designed to teach the skills necessary for performing financial analysis, risk identification and management, structuring appropriate facilities, and avoiding problem accounts. This is an essential entry step into Relationship Management and Credit Officer positions.
SEMINAR DURATION
Two weeks, made up of 2 modules, each of one week’s duration (5 days). The first week focuses on Numerical and Financial Analysis while the second week is devoted to Credit Analysis.
The course presumes a good command of Financial Accounting as a pre-requisite for comprehensive and active participation.
TARGET AUDIENCE
This program represents the standard pre-requisite for all entrants into the relationship management and credit officer fields, with a working knowledge of accounting principles.
PROGRAM OUTCOME
At the end of this program participants should be able to identify business risks, structure appropriate facilities, and put into place appropriate monitoring controls. The audience will participate in both theory and practical work through cases, exercises and tests.
COURSE OBJECTIVES
- Re-emphasize major accounting and financial analysis techniques, with particular concentration on cash flow analysis.
- Provide a thorough understanding of and handling of projection techniques and sensitivity analysis.
- Establish a thorough understanding of the techniques used in structuring credit facilities.
- Establish an understanding for structuring term loans and term loan agreements.
- Develop a profound understanding for the reasons behind corporate failures, and ways to recognize early warning signs.
- Establish an understanding of risk rating systems and rationale for incorporating BIS requirements.
Week 1: Recap of Basic Financial Fundamentals
- Recap of major accounting principles
- Accounting Exercises
- The importance of Cash Flow Analysis
- Structuring Facilities based on the Cash Cycle
- Ratio Analysis
- Ratios and Industries
- Calculating Volatility
- Financial Projections and Sensitivity Analysis
- Financial Analysis Exercises
Case Study: Starbucks. This real-life case centers around Starbucks, a fast growing retail beverage and accessories provider. Is the company growing wisely? Is it using investor funds appropriately? What is the cash being used for?
Week 2: Addressing Credit Fundamentals
- Credit Process
- Principles of Credit
- Business Strategy
- Target Market & Risk Acceptance Criteria
- Qualitative Analysis
- Types of Risks
- The Risk MAP
- Facility Types
- Structuring Credit Lines
- Term Loans
- Loan Agreements
- Early Problem Recognition
- Cases and Articles: Identifying Risks
Case Study: Al Bastoon General Trading. This case mimics a typical family-owned private company in the Middle East, involved in various businesses, which provides its bankers with limited information amid very competitive pricing pressures and structuring requirements. Are the facilities appropriate? Which group company is generating the cash? Where do the assets lie? Is there sufficient information to make a decision?