Investment and International Banking
Content
The program will focus on the role of the principle themes of cash flow analysis and debt capacity in calibrating the importance of the credit underwriting decision in helping frame the bank’s corporate finance strategy with its investment and international banking clients, with a particular emphasis on:
- Financial Statement and Early Warning Sign Analysis: a review of the financial statements – income statements and balance sheets - of corporate borrowers with the key objective of identifying early warning signs both for lender and shareholder.
- Leverage and Liquidity Analysis: a review of the refinancing risk embedded in the liquidity of corporate borrowers – short term vs. long term – and the leverage as reflected in refinancing through debt or equity.
- Sustainable Earnings and Cash Flow Analysis: a review of the techniques used by the bank’s Credit Risk Department in assessing the sustainable cash flows of a corporate borrower’s business and the bank’s approach to evaluating and analyzing cash flow statements.
- Capital Structure and Debt Capacity Analysis: a review of the techniques used both internally within the bank and externally by the markets – such as rating agencies – in assessing a company’s ability to service and repay its debt.
- Role of Enterprise Value in Credit Analysis: an examination of the interrelationship between enhanced Enterprise Value and the reduction of risk and reduced Enterprise Value and the increase of risk as a result of increased or reduced corporate cash flows respectively.
Methodology
Assuming a baseline grasp of accounting and financial statement analysis skills, the program will, using practical case examples, will develop the themes of cash flow, debt capacity, working capital analysis and value creation to highlight how management capital allocation decisions can increase or reduce the risk of a borrower while simultaneously reducing or increasing its value to its shareholders.
The program will also highlight how a leading investment and international bank can work with companies to develop restructuring strategies which reduce credit risk and correspondingly increase corporate value.