Objective

It’s important for Credit decision makers to adapt a structured approached in their credit assessment process. This course aims to build analytic skills. Using a structured and systematic approach, participants will learn to evaluate the credit standing of a client. The workshop will demonstrate how to combine a qualitative assessment of the company and its management with a quantitative analysis of its performance. A case study will form an integral part of the workshop, allowing participants to apply the concepts acquired during the workshop to a real-life scenario. The course is Instructor led training with exercises, cases study, group discussions.

Training Objectives & Outcomes

To assess the company’s credit worthiness you need to start from the basics:

  • Purpose: What for and where our money is going to be used. Who is our borrower.
  • Sources of Repayment: link primary and secondary sources of repayment to the purpose.
  • Business risks: current market conditions and their impact on risk assessment due to key macro, sector and/or company specific considerations
  • Structure Risk: assess the appropriateness of the debt structure to meet the commercial needs of a company while protecting lenders’ interests.

Course Outline

Macro Significance

  • What macro risks in the operating environment and sector specific risks which significantly affects company specific cash flows
  • Impact of general macro variables on performance.
  • Structure, key players and growth drivers of a sector
  • Economic Sector Analysis
    • Sector profitability, competitive forces and key financial drivers
    • Sector specific critical success factors

Financial Risk

Assessing the quality of data: How to determine the degree of reliance on the financials. How we can cross verify the accuracy of the financial statements.

  • Four Areas of Analysis
  • Revenues and profitability
  • Asset management
  • Capital structure
  • Debt service capacity.
  • Trend and peer analysis to assess and compare performance
  • Revenue, profitability and cash flow measures

Solvency and debt service capability

  • Key ratio and cash flow measures to evaluate solvency and debt servicing ability
  • Cash flow analysis
  • cash flow and other data to assess the debt service ability

Structure: Understanding the business model of the customer and structure of the facility

  • Assess an existing or determine the main terms of a new debt facility or exposure profile
  • Exposure profile: the appropriateness of the structure in terms of amount, currency, maturity and type of financial instrument (or commercial exposure)
  • Ranking versus other obligors: legal, structural and constructive subordination
  • Collateral Analysis
    • Collateral and personal guarantees used to achieve seniority
    • Impact of shareholder loans on lenders – the use of subordination / inter-creditor agreements
    • Safeguards: the use of documentation and covenants to mitigate risk
  • Credit pricing: the risk return profile of the transaction
  • Obligor Analysis
  • Facility Analysis
  • ORR vs FRR
  • Portfolio management overview
    • Credit policy
    • APRR
    • Risk appetite
    • Stress testing
  • Understanding the regulatory framework
  • Understanding of various financing products and associated risks.

Management & Stakeholders

  • Management aims and goals: their effect on the company’s creditworthiness
  • Owners and stakeholders support and influence
  • Management Competences
  • Effective management information systems (MIS)

Business Risk: Understanding the business model of the customer

  • Market, industry and company position
  • Understand and assess the level of business risk within a company’s business model, profitability and asset investment need.
  • Business dynamics, market position and strategy.
  • Porter Analysis of the company position.
  • Competitive Analysis

Financial Analysis , Ratios & Cash Flows

  • Quality of data
  • What are the numbers telling us? Reading between the lines.
  • Working capital management: definition and impact on cash flow
  • Commodity exposures: impact on working capital management and operating margins
  • Capital expenditures and future investment needs
  • Ratio Analysis
  • Ratio and cash flow indicators to evaluate asset efficiency and estimate free cash flow
  • Capital structure and level of financial risk is measured and assessed in relationship to the level of business risk from operations and assets

Early warning signs and remedial management

Looking into details to unveil any negative signs in business, financial, management and account relationship.: Warning signals other than financials. (financials are historical)

  • Remedial management and work outs

Forecasting

  • Looking ahead to determine the future projections of the client ability to repay.
  • Sensitivity analysis of the forecasts.

Presenting credit assessments

  • What are the golden rules of a good quality credit appraisal?

Putting all together; final Group Case Study

  • In small groups the analysis of a final group case study is prepared encompassing all the elements of credit analysis covered during the workshop.

Abu Dhabi National Exhibition Centre

Abu Dhabi National Exhibition Centre

Since last two years My Company is working with Simfotix, and every time it is great learning experience. MS Excel is one of the most recommended Program with distinctive methodology and valuable deliverables.

Etisalat

Etisalat

A very good training by Simfotix on HRBP with their International Partner Human Capital Institute. We covered high level including strategy.

Dubai Islamic Bank

Dubai Islamic Bank

Great training course and materials. Super helpful to learn shortcuts and their best application. Thank you!

Imdaad Group

Imdaad Group

The in-house training met the desired objectives for improvement in the Finance function. Group work throughout the two days and team presentation on various analytics put thing in the focus learning direction. Good output Simfotix.

Finance House Abu Dhabi

Finance House Abu Dhabi

Inhouse Training with Simfotix Training for Credit Transformation Program goes with a Wonderful learning experience of our Credit Risk Team. Looking forward to engage them in other upcoming training.

Abu Dhabi Terminals

Abu Dhabi Terminals

A combination of learning and sharing through activities and self presentations. Learning Art of Public Speaking with Simfotix Training is truly a good experience.

Arab Bank, UAE

Arab Bank, UAE

The session was engaging and informative. Overall program outcome is what we agreed and delivered to department.

Emirates Islamic Bank

Emirates Islamic Bank

Simfotix In-House training is well organized and our team learned lot of new things. We consider this as a value addition and meeting our objectives.

Ministry of Human Resources & Emiratization

Ministry of Human Resources & Emiratization

A very good training we attended with Simfotix Training.

Al Ghurair Group

Al Ghurair Group

Easy way of transferring knowledge makes the learning more digestible. Great work Simfotix for the in-house session of Advance Excel.

MAF Carrefour International

MAF Carrefour International

Thank you Simfotix for a comprehensive and value training to our Saudi Arabia Finance Team. Case Study and exercises were the key element of this workshop. As Learning & Development we are satisfied to work with them in future.

DU Telecom

DU Telecom

Selecting Simfotix as sour training and learning development supplier is a wonderful experience. They have done various inhouse programs. Their trainers carry in-depth knowledge and expertise and kept the participants well engaged.

The Executive Council of Dubai

The Executive Council of Dubai

Simfotix Trainer bear a Persuasive approach in training and the company is professional in the arrangement of training till end to make it a memorable experience. The In-house session and the follow-up session is excellent approach.

Department of Economic Development, Dubai

Department of Economic Development, Dubai

Excellent Training conducted by Simfotix Professional Development. The whole day was full of fun and learning in Advance MS Excel.

Course Materials

It is very important to analyze the need for Training along with the level of knowledge you require. This session give you a liberty to choose the modules you need, discuss it with the trainer how you want to be delivered, decide the place at your convenience and allocate number of hours to solve your problem. This does not include any development as a consulting but will include solution if you are facing a particular problem.