Monday, March 23, 2020
2:00 – 3:00 pm (Eastern Time)
1:00 – 2:00 pm (Central Time)
12:00 – 1:00 pm (Mountain Time)
11:00 – 12:00 pm (Pacific Time)
Financial organization extend credit to borrowers when the borrowers show the ability to repay the loans extended. Ideally, a request for a five-year loan should be supported by a 5-year cash flow projection, and this session will show you how to project balance sheet, income statement, and cash flow for a period that matches the proposed loan term as well as to evaluate the underlying assumptions.
- First, this leasing webinar will explain the interrelationships among revenue projections, the expenses needed to support the sales growth as well as the working capital assets, fixed assets, and liabilities necessary to support revenue growth.
- Second, attendees will learn tips on how to analyzing the underlying assumptions such as profitability, productivity, efficiency, and earnings retention.
Areas to be discussed include:
- Critical role of revenues in projecting financial statements and cash flow
- Projection of income statement, balance sheet and cash flow to calculate loan needed to support projection and ability of borrower to repay the loan
- Evaluation of underlying assumptions including feasibility of revenue growth rate, profitability, productivity, efficiency, earning retention, and leverage
- Calculation of loan amount needed to support financial projection and borrower’s repayment ability
- Analysis of asset collateral base available to support repayment
What can be learned from this session?
- Learn how to validate revenue projections by using the break-even point to determine minimum revenue and the sustainable growth rate to estimate maximum revenue growth
- Learn how to estimate the working capital investment and the fixed asset investment needed to support the borrower’s projected sales growth
- Learn how to calculate the amount of borrowing needed to support the borrower’s projections and how to underwrite the financing
As the Principal for Devon Risk Advisory Group, Dev Strischek brings years of senior experience in financial services to his clients around the areas of risk policy, risk culture, and portfolio risk management. Dev also serves as a Member of the Private Company Council for FASB. Prior to those roles, Dev served for 18 years at SunTrust Bank, retiring as their Sr Vice President and Senior Credit Policy Officer for the bank. Dev is a frequent industry speaker on many aspects associated with credit risk and compliance, as well as loan policy best practices. He has also authored many industry trade articles on principles and practices, problems and issues relevant to risks that financial organizations must manage.
1.0 CPE Credits & 1.2 AAP Credits