Training the Credit Analyst is a virtual course designed to address the needs of beginning Credit Analysts and reinforce the credit skills of experienced Credit Analysts, Consumer and Commercial Lenders in all aspects of credit analysis.  This series is a recording of a webinar series that was held once a month from March 2024 through August 2024.

The course begins with a refresher in accounting principles then proceeds into a thorough review of financial statement components.  The course will demonstrate the principles of spreading financial statements so that the credit analysis output can be interpreted.  Other topics to be covered are Ratio Analysis; Loan Structuring; Cash Flow Analysis; Financial Forecasting; Sustainable Growth Analysis and How to Write an Effective Credit Memo, among other topics.  This course will focus primarily upon commercial and industrial type of borrower.

Course Objectives:
The objective of this course is to provide the Credit Analyst and all Lenders with analytical skills that can be put to immediate use when analyzing your next borrower.  The participant will learn to use proven analytical tools which will enable them to assess the degree of risk prior to recommending approval or declination of a credit request.  Another objective of this course is to improve the documentation of commercial loan files which will reduce losses and will be viewed favorably by the regulatory community.

Session 1 Topics:

• Review of accounting assumptions & principles which are used by accountants to create financial statements
• Review the rules of debits and credits utilized to record economic transactions
• Review the influential organizations that create and amend accounting principles
• Accounting case study to reinforce information gained from this session

Session 2 Topics: 

• A detail review of financial statement components to understand the meaning of each major component
• Financial Statement Mapping to provide a deeper understanding of the relationship between these two statements, which is required to know the logic of ratio analysis and converting an accrual basis financial statement into a cash basis financial statement
• Review of Notes to the Financial Statement to obtain a deeper understanding of each account and the accounting behind each major account credit analyst and lenders must know

Session 3 Topics:

• Review how to calculate and interpret important credit ratios to determine financial strength
• Utilize ratio analysis to identify the financing gap utilizing net working capital investment analysis and to determine the amount required to fund a company’s short term financing needs
• Utilize ratio analysis to determine the financial impact on cash flow from changing liquidity ratios and operating profit margins

Session 4 Topics:

• Detailed review of how to calculate and interpret cash flow analysis by comparing the advantages and disadvantages of various methods and which ones are the most effective
• Principles of financial forecasting and sustain growth analysis

Sessions 5 & 6 Topics:

• Utilizing the lessons learned in the previous sessions to write an effective credit memorandum by understanding how to plan, organize and position your memo  
• Know the information to include and emphasize in a credit memo and how to interpret the results of ratio and cash flow analysis
• Know how to add that “Wow Factor” to your credit memo by not only explaining the trend of a particular financial factor but also explaining the cause of that trend and the financial impact on cash flow from those changes