Monday, September 14, 2020
Part 1: 12:00 – 1:00 pm & Part 2: 2:00 - 3:00 pm (Eastern Time)
Part 1: 11:00 – 12:00 pm & Part 2: 1:00 - 2:00 pm (Central Time)
Part 1: 10:00 - 11:00 am & Part 2: 12:00 – 1:00 pm (Mountain Time)
Part 1: 9:00 - 10:00 am & Part 2: 11:00 – 12:00 pm (Pacific Time)
PART 1 (12:00 - 1:00 pm ET)
Operating Performance – Profitability, Productivity and Efficiency
This program is designed to show bankers, lenders and credit professionals:
- How to evaluate a borrower’s operating performance—revenue generation, productivity, efficiency, and profitability--as they analyze the information disclosed in its income statement.
- How to identify the critical elements of the profit and loss statement and their roles in driving a business borrower’s operating performance.
- How to judge a borrower’s operating performance trends and results against industry averages
- P&L’s key components—revenue, cost of goods sold, gross profit, operating expenses, profit before taxes, taxes, profit after taxes
- Revenue growth—actual sales growth vs sustainable growth rate
- Break-even analysis—how much revenue does a borrower need just to cover its expenses?
- Operating leverage—the smaller the gross profit, the more vulnerable a borrower’s profitability is to declining revenues
- Production vs. productivity
- Profit margins—gross profit margin, before-tax profit margin, after-tax profit margin
- Analysis of return on sales, return on assets, return on equity
- Profit vs cash flow—why profit is not always equal to cash flow
BONUS MATERIAL: A case study is used to demonstrate how to evaluate operating performance.
PART 2 (2:00 - 3:00 pm ET)
Financial Condition - Liquidity, Leverage and Solvency
This financial and lending webinar on financial condition is the companion piece to “How to Assess a Borrower’s Operating Performance" (Sept 14, Noon ET), which explained to bankers, lenders and credit professionals how to:
- Evaluate a borrower’s operating performance—revenue generation, productivity, efficiency, and profitability--as they analyze the information disclosed in its income statement.
- Identify the critical elements of the profit and loss statement and their roles in driving a business borrower’s operating performance.
- Judge a borrower’s operating performance trends and results against industry averages
This financial and lending training moves from the income statement to the balance sheet to evaluate a borrower’s liquidity, leverage and solvency. A borrower with a positive operating performance and a sound financial condition is able to generate the cash flow to repay.
- Learn how liquidity, leverage, and solvency are interrelated among themselves and how they interact with operating performance and cash flow
- Learn how to analyze and interpret internal trends in liquidity, leverage, and solvency and then compare them to industry averages to evaluate their impact on repayment ability
Topics covered in the session:
- Liquidity—borrower’s ability to meet its short-term obligations
- Current / Quick Ratios
- Working Capital Analysis
- Leverage-borrower’s ability to balance its sources of funds from creditors and owners
- Various ratios to measure the proportion of support provided by owners and creditors
- Ensuring matching of short-assets with short-term debt, long-term assets with L-T debt
- Solvency-borrower’s ability to internally sustain its asset base, pay its obligations, and reward its owners
- Measures for determining the ability of the firm to simultaneously satisfy the expectations of lenders and owners while maintaining the earning assets of the firm
- Sustainable growth vs. actual growth
- Use of industry ratios to measure borrower’s financial condition to its peers
BONUS MATERIAL: A case study is used to demonstrate how to evaluate financial condition
A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Martin J. "Dev" Strischek is principal of Devon Risk Advisory Group based near Atlanta, Georgia. Dev advises, trains, and develops for financial organizations risk management solutions and recommendations on a range of issues and topics, e.g., credit risk management, credit culture, credit policy, credit and lending training, etc. Dev is the former SVP and senior credit policy officer at SunTrust Bank, Atlanta. He was responsible for developing, implementing, and administering credit policies for SunTrust’s wholesale lines of business--commercial, commercial real estate, corporate investment banking, capital markets, business banking and private wealth management. Prior to SunTrust, Mr. Strischek was chief credit officer for Barnett Bank’s Palm Beach market. Dev is also a member of the Financial Accounting Standards Board’s (FASB’s) Private Company Council (PCC).
1.0 CPE Credits & 1.2 AAP Credits