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Advanced credit

Course objective

By the end of this course, participants will:

    1. Understand that conventional financial analysis is wholly dependent on an understanding of the business environment within which the borrower operates;
    2. Be able to prepare a comprehensive "tops down" analysis of potential and existing borrowers, maintain that analysis current, and identify in advance when possible problems and/or opportunities emerging from that analysis may affect their client;
    3. Identify and adjust for incorrect, deceptive and unconventional accounting treatment in borrowers¹ financial statements, so as to more accurately identify the trends in the key factors affecting the ability of the borrower to continue to service and repay their facilities;
    4. Apply their analysis of the operating environment of the borrower, and their understanding of the borrower¹s financial, managerial and competitive position to designing facilities, security and documentation that are appropriate to that operating environment, and financial, managerial and competitive position; and
    5. Have an initial understanding of a number of specific issues that are relevant to more advanced lenders, such as project finance and financial analysis of banks and non bank financial intermediaries.

Course duration
Three days

Presenter
Andrew McRobert, or presenter trained by him. An abbreviated curriculum vitae of Andrew McRobert can be viewed here.

Course agenda
A copy of the Œstandard¹ course agenda is attached herewith. The course has been designed in a series of modules. In respect of each country in which it is presented, a number of changes are made to the Œstandard¹ model, in order to make it country-specific:

    1. References to mandatory accounting policies are changed to reflect the current position in the country;
    2. A version of the "Unidentified Industries" case study which uses financial statements of companies in the country in question is substituted;
    3. Local bank financial statements are substituted in the segment on financial analysis of banks and non bank financial intermediaries; and
    4. Day 4 of the course consists of a study devoted to an industry in the country that is either facing or in the midst of structural change. The case examines the industry and the impact of the changes on one or more companies within that industry. For each country, an industry and companies operating in that industry are selected for this case study.

In addition, the course may be amended, if required, as follows:

    1. Substitution of case studies drawn from the financial institution¹s own portfolio;
    2. Inclusion of additional material on topics of particular interest to a specific financial institution;
    3. Examination, on day 4, of one or more industries that are of specific interest to the institution in question; and/or
    4. Any other modifications that a client considers necessary.

Basic Course Agenda

Date Subject Details Case Study
Day 1

More complex issues in financial analysis

  • Review of accounting standards and accounting policies
  • Cash flows revisited
  • Cosmetic accounting
  • Segment reporting
  • Financial profiles for different sectors

  • The Enron case: were there any warning signals?
  • Maxwell Communication
  • Conglomerated Holdings
  • IPEC Holdings Limited
  • Unidentified Industries

Day 2

More complex lending issues

  • Project finance
  • Documentation, covenants & loan structuring
  • Property finance, and valuation of property as collateral
  • Lending to the finance sector

  • Eurotunnel
  • Unidentified banks case

Day 3

Business analysis

Problem loans

  • Understanding the business and competitive environment of borrowers
    "Tops Down" analysis
    Porter analysis ÿ John Kaye analysis
    Financial analysis of one or more key players in the business sector;
    Examination on changes in the business sector;
    Examination of the impact of those changes on those players;
    Potential for alternative financing structures for companies in the sector; and
    Conclusions as to the relative credit standing of those players.
  • Corporate governance and credit
  • Causes of corporate failure
  • Warning signals of corporate failure

  • Thompsons Limited
  • Review of Singapore paper-converting sector in the light of these issues

contact details

South Africa: +27 82 447 4256

Australia: +61 402 048 326

E-mail: amra@amcrobertandassocs.com.au