Advanced Cashflow Analysis
Introduction: The question of repaymentability is central to any commercial lending request. In order to be approved for a loan, businesses need to establish their ability to generate enough cashflow to service both existing and proposed debt. This seminar will examine cashflow from a number of different perspectives. Participants in this program will consider conventional cashflow analysis as a basis for loan repayment and also look at other factors and variables that can impact a business’ cashflow such as growth, the mismanagement of operating cycles and the purchase of capital expenditures. During this program, a number of different analysis tools will be utilized, including cashflow statements, financial projections, and permanent working capital analysis.
Case studies will be used throughout this program to demonstrate the ways in which these tools can be utilized to assist lenders in the analysis process.
•Measure a business’ cashflow accurately
•How to utilize cashflow statements properly
•Predicting the ability of a business to service future debt based on the development of projected financial information
•Realizing the importance of changes in Permanent Working Capital and how those changes impact cashflow
- EBITA (Traditional Cash Flow) 00:07:08
- Snider Corporation 00:22:01
- Income Statement 00:29:49
- Source Document 00:30:11
- Personal Cash Flow (Business owner/Guarantor) 00:46:06
- Global Cash Flow 00:52:57
- Uniform Credit Analysis Cash Flow (UCA) 00:54:21
- The Simpson Co. Statement of Cash Flows 00:56:00
- Sample Contractor - Balance Sheet - Actual 00:56:28
- Sample Contractor - Income Statement - Actual 00:58:11
- Sample Contractor - Income Statement - Actual and & 00:59:50
- Sample Contractor - UCA Cash Flow 01:00:05
- Sample Contractor - Ratios 01:12:26
- Other Cash Flow Models - Cash Basis Cash Flow 0:13:29
- Other Cash Flow Models - Fixed-Charge Coverage Ratio/Free Cash Flow 01:19:01
- Other Cash Flow Models - Cash Basis Cash Flow 01:22:17
- Other Cash Flow Models - Commercial Real Estate 01:25:20
- Miscellaneous Cash Flow Analysis 00:27:33
- Exhibit #1 01:27:50
- Exhibit #2 01:33:33
- Exhibit #3 01:38:02
- Conclusion 01:42:37
- Presentation Closing 00:47:11
- Amortization 00:13:54
- C Corporation 00:12:37
- Debt Coverage Ratio (DCR) 00:15:58, 00:38:59
- EBITA 00:07:16, 00:08:48, 00:30:04
- Income Statement 00:29:52, 00:
- Limited Liability Company (LLC) 00:12:42, 00:40:49
- Personal Cash Flow Statement 00:46:07
- S Corporation 00:12:40, 00:40:49
- Uniform Credit Analysis Cash Flow (UCA) 00:54:47
Amortization: An accounting term that refers to the process of allocating the cost of an intangible asset over a period of time. It also refers to the repayment of loan principal over time. (investinganswers.com)
C Corporations : A C corporation, under United States federal income tax law, refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. Most major companies are treated as C corporations for U.S. federal income tax purposes.
Debt Coverage Ratio (DCR) : The debt service coverage ratio, also known as "debt coverage ratio", is the ratio of operating income available to debt servicing for interest, principal and lease payments. It is a popular benchmark used in the measurement of an entity's ability to produce enough cash to cover its debt payments.
EBITA: Earnings before interest, taxes, and amortization (EBITA) is a measure of company profitability used by investors. It is helpful for comparison of one company to another in the same line of business. In some cases, it also can provide a more accurate view of the company's real performance over time.
Income Statement: One of the three primary financial statements used to assess a company's performance and financial position (the two others being the balance sheet and the cash flow statement). The income statement summarizes the revenues and expenses generated by the company over the entire reporting period. (investinganswers.com)
Limited liability company (LLC): An LLC is a corporate structure where members cannot be held accountable for the company’s debts or liabilities. This can shield business owners from losing their entire life savings if, for example, someone were to sue the company. Can be a single member (much like a sole proprietor) or a multi-member. It shares certain traits of both corporations as well as partnerships or sole proprietorships. It is not a corporation.
Personal Cash Flow Statement: The personal cash flow statement measures your cash inflows (money you earn) and your cash outflows (money you spend) to determine if you have a positive or negative net cash flow.
S Corporation: An S corporation, for United States federal income tax, is a closely held corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code. In general, S corporations do not pay any income taxes.
Uniform Credit Analysis Cash Flow (UCA): The Uniform Credit Analysis, or UCA Cash Flow, is designed to help you identify where the business's cash is going and how it is being used.
Vincent DiCara has been involved in evaluating and meeting the credit needs of small and medium-sized businesses for thirty years as a business advocate, lender, credit analyst and trainer. Since 1995, he has been providing expert training for lending professionals throughout the country who work in the public, private non-profit, and private sectors. Mr. DiCara’s training programs have become known for their ability to foster an informal and participatory environment in which students are empow... View Full Profile