Understanding how to calculate and interpret cash flow is essential for successful bankers. This course is designed to assist bankers in calculating cash flow using the Uniform Cash Flow Analysis (UCA) method. We'll also provide guidance in calculating Global Cash Flow Analysis for entities that rely on excess cash generated by their owners to service the business entity's commercial debt.
We'll begin by defining Cash Flow as the tool to transform an Accrual Basis Financial Statement into a Statement of Cash Flow. We'll discuss Cash Flow's importance when considering a long-term loan request. We'll then demonstrate how Cash Flow is calculated using the balance sheet and income statement to determine sources and uses of cash from Operating, Investing and Financing Activities. Next, we'll review owners' personal financial statements and tax returns to determine the excess compensation needed to support the debts of the business entity and the individual. This is the major premise of Global Cash Flow Analysis.
We'll discuss several cases to demonstrate Global Cash Flow Analysis, including a case for the self-employed borrower with interests in several business entities.
You should finish with a solid understanding of how cash flow is calculated, and more importantly, how to interpret its meaning.
- An illustration of how Cash Flow Analysis is used to transition an Accrual Basis Financial Statement into a Statement of Cash Flow (or Cash Basis Statement) because loans are repaid with cash and not profits.
- Review of the rules of Cash Flow, which are essential for determining how much cash is generated from items on the balance sheet
- Global Cash Flow Analysis Methodology using financial statements, tax returns and credit reports of commercial borrowers and individuals
- Comparison of the UCA method of calculating cash flow versus the less effective traditional EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) method of determining cash flow
- A fast Cash Analysis method that can get you to the same results in less time
Who Should Attend?
- Senior Loan Officers
- Senior Credit Officers
- Commercial Loan Officers
- Branch Managers
- Credit Analysts
- Loan Review Personnel
- Consumer Loan Officers
- Credit Administration Support Staff
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