Events

Working capital is misunderstood by many borrowers and bankers alike. This program provides the analytical tools (with case examples) to understand how the working capital cycle affects the borrowing needs of a business in terms of a line of credit, and how the dollar size of the line of credit is related to this cycle.

Equally important is to understand how equipment finance needs arise, and how to use financial statements or tax returns to determine historical patterns of capital expenditures and related long-term financing, plus gaps between purchases and financing. This allows the lender or analyst to position your bank to be proactive in helping customers optimize or maximize equipment financing, while minimizing its draining effect on working capital via small purchases (not financed) and down payments.

Topics covered include:

  • How visualize the working capital cycles, plus a simple chart to use
  • Related line of credit size to working capital needs and basic cash flow
  • Areas of caution when using accounts receivable and inventory as collateral
  • Overview of equipment financing (loan or lease) industries that tend to have stronger equipment financing needs
  • Overview of equipment loan vs. lease considerations
  • Capitalized leases vs. operating leases and upcoming FASB changes, with case example of how to capitalize an operating lease for analytical purposes
  • Issues with equipment as collateral

Target Audience: Commercial and business lenders, credit analysts, community bankers, private bankers and portfolio managers; plus, loan review and examination specialists, and credit officers involved evaluating or approving equipment financing.

Presenter
Richard Hamm, Advantage Consulting & Training

Registration Options
Live presentation $330

Recording available through January 25, 2023

The Uniform Credit Analysis (UCA) cash flow model is an important analytical tool provided as output from business financial statement “spreading” software used for commercial and industrial (C&I) loans. This seminar demonstrates how the UCA model is derived and compares it to the statement of cash flows (SCF) prepared by accountants. From a “hands on” case study, the participants will learn how to calculate the UCA formats, plus how to use it to evaluate business cash flow in conjunction with traditional ratio analysis.

Topics to be covered:

  • Introduction to the UCA model and how it is derived from basic financial statements or tax returns
  • Compare and contrast the “direct” format (used in UCA) from the “indirect” format (used in SCF)
  • How to calculate and how to use the UCA model to evaluate business cash flow, with a focus on assessing operating cash flow consistency and reliability, plus how short-term and long-term financing affect cash flow
  • How cash flow analysis can be integrated into and validate traditional ratio analysis and other underwriting techniques

Target Audience:  Commercial lenders, credit analysts, small business lenders, private bankers, loan review specialists, lending managers, and credit officers.

Presenter
Richard Hamm, Advantage Consulting & Training

Registration Options
Live presentation $330

Recording available through January 18, 2023

This program covers how to calculate and analyze the basic set of financial statement (or tax return) ratios for operating businesses. Preliminary steps (covered in related programs) include understanding the types of financial statements and level of accountant involvement, distinguishing between cash and accrual accounting methods, and the unique format and features of business tax returns. We now turn to the four primary sets of ratios: (1) liquidity, (2) leverage, (3) profitability, (4) efficiency, and (5) debt coverage. Using a comprehensive case, calculations are demonstrated, as wells as major issues, strengths and limitations of the various ratios. Participants will work from a ratios reference guide that is intended to be a resource for future statement spreading.

Topics to be covered include:

  • Basic guidelines for classifying and spreading the data
  • Identify the key components of a balance sheet
  • Calculate liquidity and leverage ratios for an example business and interpret the results
  • Identify situations with positive or negative working capital
  • Describe common-sizing of the balance sheet
  • Identify the key components of an income statement
  • Calculate profitability and traditional cash flow measures for an example business and interpret the results
  • Calculate efficiency and debt coverage ratios for an example business and interpret the results
  • Explain the use of industry and comparative data within financial analysis

Target Audience: Credit analysts, portfolio managers, assistant relationship managers, community bankers, small business lenders, commercial lenders, consumer lenders, branch managers that lend to business owners, private bankers, special assets officers, loan review specialists, and others involved in business and commercial lending

Presenter
Richard Hamm, Advantage Consulting & Training

Registration Option
Live presentation $330

Recording available through March 13, 2023

This program unlocks the key issues in analyzing business tax returns by creating a business tax return from a conventional financial statement. This shows the major formatting differences and ways balance sheet accounts and income statement items are labeled differently in a tax return. It also reveals the functions of the various schedules. By using a pass-through entity, we further see how the tax return carefully segregates items that move to an owner’s personal tax return via the Schedule K-1. A final step is creating a chart that “maps” a financial statement to both pass-through entities and a regular corporation.

After this seminar, attendees will be able to:

  • For an example business (case), construct a tax return balance sheet (Schedule L), income statement, Schedule M-1 and Schedule M-2 on the cash basis
  • Identify key formatting differences between a conventional financial statement and a tax return
  • Describe how pass-through entity tax returns separate various income statement items for purposes of allocating them to the owner(s) personal tax returns
  • On the Schedule K-1, identify the pass-through items that involve cash, compared to pass-through items that do not involve cash
  • Describe the common relationship between pass-through income and distributions to the owner(s)
  • Create a chart to compare and align financial statement components to the appropriate tax return schedules

Target Audience:  Credit analysts, portfolio managers, assistant relationship managers, community bankers, small business lenders, commercial lenders, consumer lenders, branch managers that lend to business owners, private bankers, special assets officers, loan review specialists, and others involved in business and commercial lending

Presenter
Richard Hamm, Advantage Consulting & Training

Registration Option
Live presentation $330

Recording available through March 6, 2023

Many business and commercial lenders, plus credit analysts and portfolio managers, work primarily from company-prepared financial statements, along with business tax returns. One of the key issues in analyzing these documents is identifying the method of accounting being used. Much like two different, foreign languages can take the same text and render it into two different-looking documents, each method of accounting takes the same financial transactions and puts them together into two different-looking financial statements. Do you know the key differences in how cash and accrual method accounting handle these financial transactions? Can you “translate” between the two methods? Do you know which method your borrower is using?

This program provides a refresher for the key issues in determining which method of accounting is being used, and what it means for the analysis process. We also cover how and why either method is appropriate for some businesses. It’s not a matter of which one is “best,” it’s a matter of “fit.”

Attendees will learn to:

  • Compare and contrast the cash method and accrual method of accounting
  • For an example business (case), construct the conventional balance sheet, income statement and statement of cash flows on BOTH the cash and accrual basis
  • Identify key differences in how individual transactions are handled between cash and accrual accounting, plus the effect on the perception of performance
  • Describe where to find key indicators of the method being used, including where they are disclosed in various business tax return format
  • Describe how the statement of cash flows serves as a translator between cash and accrual accounting
  • Why other comprehensive bases of accounting (cash and income tax) are appropriate for many smaller businesses

Target Audience:  Credit analysts, portfolio managers, assistant relationship managers, community bankers, small business lenders, commercial lenders, consumer lenders, branch managers that lend to business owners, private bankers, special assets officers, loan review specialists, and others involved in business and commercial lending.

Presenter
Richard Hamm, Advantage Consulting & Training

Registration Option
Live presentation $330

Recording available through March 1, 2023

Analyzing business financial statements and tax returns starts with understanding the basic components of the balance sheet and income statement, along with the reconciliation of retained earnings, plus footnotes and other disclosures. The business tax return is nothing more than a financial statement with similar components, but with a different format and structure. A second step is to use a diagram, with the components in rough proportion to dollar size, to see how the components “flow” together and interact to create three major financial relationships: (1) Sales to total assets, (2) profit retention, and (3) leverage. A third step is to identify and understand the key principles underlying the three primary methods of accounting, followed by examining an accountant cover letter, if applicable.

Topics to be covered include:

  • Identify various financial statement analysis options and tools, plus the basic structure and purposes of financial statements and tax returns
  • Diagram the statement components and how they flow together and create three major relationships
  • Identify various levels of accountant-prepared financial statements (compilations, reviews, and audits) and related accountant cover letters
  • Describe key issues in using internal or company-prepared statements, as well as interim statements
  • Compare and contrast the three primary methods of accounting
  • Key standards, limitations, and alternatives within accrual accounting or generally accepted accounting principles (GAAP)

Target Audience:  Credit analysts, portfolio managers, assistant relationship managers, community bankers, small business lenders, commercial lenders, consumer lenders, branch managers that lend to business owners, private bankers, and special assets

Presenter
Richard Hamm, Advantage Consulting & Training

Registration Option
Live presentation $330

Recording available through February 22, 2023

The session will begin with analyzing the four financial statements — Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows. This will include revenue and expense recognition, FIFO, LIFO, and average inventory costing models, operating expenses (repairs) versus improvements, depreciation including straight-line, units-of-production, and double-declining balance, amortization, and depletion.

The seminar will also explore accounts receivable assessment, allowance for doubtful accounts, intangible assets, accounts payable assessment, capital and operating leases, and analysis of the equity section of the Balance Sheet including partners’ capital accounts, common and preferred stock, treasury stock, stock splits, and retained earnings.

Additionally, the types or levels of financial statements will be highlighted including company-prepared, compiled, reviewed, and audit. The audited financial statements will include unqualified, qualified, adverse, and disclaimer.

The participant will then be introduced to a five-part financial statement analysis model which will include the liquidity, activity, leverage, operating performance, and cash flow.

Additionally, the related topics of the Z-Score (bankruptcy predictor) and the sustainable growth models will be reviewed.

Objectives:

  • Analyze the four financial statements including Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows
  • Explore income statement issues including revenue recognition, inventory costing, and depreciation
  • Cover Balance Sheet accounts including accounts receivable, allowance for doubtful accounts, accounts payable, and the equity section
  • Review the levels of financial statement reporting including company-prepared, compiled, reviewed, and audit
  • Analyze a “five-part” analysis model including liquidity, activity, leverage, operating performance, and cash flow
  • Analyze the EBITDA, personal (business owner), global, and sensitivity cash flow analyses
  • Discuss the Z-score (bankruptcy predictor) and sustainable growths models
  • Summarize the seminar concepts through case studies

Target Audience: Commercial lenders, commercial relationship managers, credit analysts, loan administrators

Presenter
David Osburn, Osburn & Associates, LLC

Registration Option
Live presentation $330

Recording available through February 8, 2023

This program covers how to calculate and analyze the basic set of financial statement (or tax return) ratios for operating businesses. Preliminary steps (covered in related programs) include understanding the types of financial statements and level of accountant involvement, distinguishing between cash and accrual accounting methods, and the unique format and features of business tax returns. We now turn to the four primary sets of ratios: (1) liquidity, (2) leverage, (3) profitability, (4) efficiency, and (5) debt coverage. Using a comprehensive case, calculations are demonstrated, as wells as major issues, strengths and limitations of the various ratios. Participants will work from a ratios reference guide that is intended to be a resource for future statement spreading.

Covered Topics

Basic guidelines for classifying and spreading the data
Identify the key components of a balance sheet
Calculate liquidity and leverage ratios for an example business and interpret the results
Identify situations with positive or negative working capital
Describe common-sizing of the balance sheet
Identify the key components of an income statement
Calculate profitability and traditional cash flow measures for an example business and interpret the results
Calculate efficiency and debt coverage ratios for an example business and interpret the results
Explain the use of industry and comparative data within financial analysis

Target Audience
Credit analysts, portfolio managers, assistant relationship managers, community bankers, small business lenders, commercial lenders, consumer lenders, branch managers that lend to business owners, private bankers, special assets officers, loan review specialists and others involved in business and commercial lending

Presenter
Richard Hamm, Advantage Consulting & Training

Registration Option

Live presentation $275

Recording available through Mar. 14, 2022

This program unlocks the key issues in analyzing business tax returns by creating a business tax return from a conventional financial statement. This shows the major formatting differences and ways balance sheet accounts and income statement items are labeled differently in a tax return. It also reveals the functions of the various schedules. By using a pass-through entity, we further see how the tax return carefully segregates items that move to an owner’s personal tax return via the Schedule K-1. A final step is creating a chart that “maps” a financial statement to both pass-through entities and a regular corporation.

After this seminar, attendees will be able to:

For an example business (case), construct a tax return balance sheet (Schedule L), income statement, Schedule M-1 and Schedule M-2 on the cash basis
Identify key formatting differences between a conventional financial statement and a tax return
Describe how pass-through entity tax returns separate various income statement items for purposes of allocating them to the owner(s) personal tax returns
On the Schedule K-1, identify the pass-through items that involve cash, compared to pass-through items that do not involve cash
Describe the common relationship between pass-through income and distributions to the owner(s)
Create a chart to compare and align financial statement components to the appropriate tax return schedules

Target Audience
Credit analysts, portfolio managers, assistant relationship managers, community bankers, small business lenders, commercial lenders, consumer lenders, branch managers that lend to business owners, private bankers, special assets officers, loan review specialists and others involved in business and commercial lending

Presenter
Richard Hamm, Advantage Consulting & Training

Registration Option
Live presentation $275

Recording available through Mar. 7, 2022

Analyzing business financial statements and tax returns starts with understanding the basic components of the balance sheet and income statement, along with the reconciliation of retained earnings, plus footnotes and other disclosures. The business tax return is nothing more than a financial statement with similar components, but with a different format and structure. A second step is to use a diagram, with the components in rough proportion to dollar size, to see how the components “flow” together and interact to create three major financial relationships: (1) Sales to total assets, (2) profit retention, and (3) leverage. A third step is to identify and understand the key principles underlying the three primary methods of accounting, followed by examining an accountant cover letter, if applicable.

Covered Topics

Identify various financial statement analysis options and tools, plus the basic structure and purposes of financial statements and tax returns
Diagram the statement components and how they flow together and create three major relationships
Identify various levels of accountant-prepared financial statements (compilations, reviews and audits) and related accountant cover letters
Describe key issues in using internal or company-prepared statements, as well as interim statements
Compare and contrast the three primary methods of accounting
Key standards, limitations and alternatives within accrual accounting or generally accepted accounting principles (GAAP)

Target Audience
Credit analysts, portfolio managers, assistant relationship managers, community bankers, small business lenders, commercial lenders, consumer lenders, branch managers that lend to business owners, private bankers, special assets

Presenter
Richard Hamm, Advantage Consulting & Training

Registration Option
Live presentation $275

Recording available through Feb. 23, 2022