Building on the skills covered in the Business Risk and Financial Statement Analysis programs, this program is designed to provide participants with an outline of the importance of working capital and a bank’s role in financing such needs.

Strong emphasis will be placed on the potential risks in the breakdown of the borrower’s working capital cycle and how such risks can be proactively identified ahead of time.

• Working Capital – The Accountant’s Approach:  A review of the traditional approaches to measuring liquidity, with a particular emphasis on current ratio, quick ratio and working capital analysis
• Working Capital – The Banker’s Approach:  A review of the breakdown of the cash collection cycle of accounts receivable days, inventory days, and accounts payable days, and assessing how long the SME borrower is ‘out of cash’ and therefore dependent upon the bank
• Net Working Capital:  How the reconfiguration of net or operating working capital can be used to proactively identify credit risks in the borrower and its ability to convert its revenues and profits into cash
• Working Capital and the Release of Cash:  A review of how good operating and financial management can de-risk a borrower’s debt profile through faster collection of receivables, improved inventory management, and appropriate use of trade credit
• Permanent vs. Seasonal Working Capital:  A review of short term vs. long term working capital assets and the most appropriate ways by which these should be financed by a business and community banker