Analyzing a commercial borrower’s creditworthiness can be tricky. A common question is,
“How do a company’s changing financial metrics impact cash flow over time?” Learn the
answer to this question and more.
- Understand key financial metrics that impact a company’s cash flow
- Use financial impact analysis to:
- Determine the cash flow impact of changing accounts receivable, inventory, and accounts
- Properly structure short-term and long-term loans
- Forecast major items on the balance sheet and income statement
- Determine the amount of funding required to pay major creditors
- Ascertain the cash flow financial impact of changing gross, operating, and net profit margins
Calculating credit ratios to determine the financial condition and creditworthiness of a business is just
the starting point of analyzing a company’s true performance. Ratio analysis can take the process to a
This webinar will demonstrate how to use ratio analysis to determine the financial impact of changing
metrics, such as changes in working capital assets and working capital liabilities turnover as well as
changes in the gross, operating, and net profit margins. This analysis will allow lenders to structure loans
appropriately by determining the amount of funding needed to replace potential cash flow losses caused
by negative financial trends. When this specialized analysis is mastered, the lender can add the “wow”
factor to their analysis by not only describing trends, but also understanding and communicating the cash
flow impact of those changing trends.
Jeffery W. Johnson, Bankers Insight Group, LLC
Jeffery Johnson has been in financial services more than 40 years. He has been VP and senior lender for a large regional bank and SVP and commercial banking division manager for a community financial institution. Most of his career has been spent in credit administration, lending, business development, loan review, management, and training and development. Over the last 17 years, Jeffery has provided training for several banking associations and individual financial institutions nationwide.
Jeffery holds a bachelor’s in accounting from Morehouse College in Atlanta, an MBA in finance from John Carroll University in Cleveland, a Diploma of Graduation from the Prochnow School of Banking at the University of Wisconsin-Madison, and a Graduate Certificate in Bank Management from the First American Management Institute at the University of Pennsylvania’s Wharton School of Business.