Cash Flow Analysis: Inspiring Cases, Analysing Companies (Part 1 of 2)
8.00am until 5.00pm
Castille, Casa Leone, Floriana
CONTEXT & OBJECTIVES
Banks play a crucial role in allocating financial resources. Many companies in a country are dependent on the loans and credit facilities that banks provide. Meeting the demand of these companies for financial resources in a sustainable way will support social and economic developments. The workshop is intended to help staff to do their job efficiently and thoroughly. After finishing the programme, all participants should be able to:
Systematically determine the operating and financial strength of a specific borrowing company. Linking operational and financial issues gives a strong analysis and protection against unreliable financials and weak business plans. Finally, the participants will be able to judge the level & predictability of future cash flows and to assess a risk rating by hand
Help the borrower to set reasonable goals in terms of financial condition and growth and proposing/discussing a strategy when a borrower is facing potential future financial difficulties
Understand the importance of loan monitoring, a pro-active attitude, and acting like your customer’s “financial partner” in order to improve the risk profile and to avoid bad loans.
Give concise and clear conclusions and recommendations to credit committees/management
The workshop is created for relationship managers & credit analysts at banks and everyone else who is interested in financial analysis and in tricks and tips to improve their efficiency. Both senior and junior staff will enjoy the real-life examples and the lively discussions.
Using a 10-step approach (a “Toolbox”), the participants analyse real-life situations and assess strengths and weaknesses in a clear & concise way. In lively discussions, they share their expertise, experi- ence, observations, and analyses. It is exciting and fun. On all cases and exercises, the participants will receive documented answers.
Our goal is to judge the level & predictability of future cash flows and to assess a credit risk rating by hand. The following subjects are needed to make this judgment and will be covered in the workshop:
• Identifying warning signals in the cash flow statement
• Assessing management quality and reliability of financial information • The impact of the corporate strategy
• Parent/subsidiary issues and structure risks
Outline of the programme & individual expectations
What are the wishes of the participants?
A practical 10-step framework for credit analysis
Cash flow analysis
The importance of cash flows, calculating cash flows and identifying warning signals
Profitability, debt burden and liquidity
Refreshing this part of financial analysis as well
Industry analysis and “Product Life Cycle < > Cash Flows”
Tools to assess the Business Risks, which is part of the operating strength of a company
Case “A profitable retailer still going bankrupt”
What went wrong?
Financial projection “Back to the Future”
How to make a financial projection: We go back in time and find a solution how we could avoid the bankruptcy of the retailer
About yesterday: learning points & questions?
Updating the group’s “AHA-list” to register views & ideas
Test each other’s knowledge: The cards contain questions and answers
Bad Loans: Voluntary Debt Restructuring
The World Bank & U.N. about out-of-court debt restructuring, discussions
TECHNOLOGICAL DISRUPTION CASE 1/2: “Apple vs. Dell”
2 Different strategies, which is best?
Ready for expansion?
When is a borrower ready for expansion?
Management’s Attitude & Reliability of Financials
Learning an easy and effective tool to assess these items & warning signals
Case “Company Easy Bikes Ltd. is being sold”
Are the financials reliable? What about the business risks? Are the owners “on the hook”?
TECHNOLOGICAL DISRUPTION CASE 2/2: “Tesla vs. Ford”
New vs. old technology
Conclusion & Evaluation
Filling out the evaluation forms