Financial Modeling for Credit Professionals

Description

This course focuses on the design and creation of an interactive financial model for a company with the purpose of analyzing credit capacity and impact of debt. Course concepts include model design, logic, construction, financial concepts and accounting treatment. Participants will build a model that includes a forecast of a company’s income statement, cash flow statement and balance sheet. Participants will recapitalize a company’s balance sheet and then forecast specific pieces of debt and equity so that the model can be used for credit purposes or as an LBO model.

Prerequisites

Participants should have a good working knowledge of Excel and financial modeling prior to taking this course.

Time

8 - 16 hours, depending on the amount of material to be covered.

Learning Topics

Design and Structure a Financial Model

Design a clear and logical financial model
Discuss the need for a model to serve as a marketing tool
Create clearly defined inputs and assumptions
Connect strings of data to create assumptions and footnotes

Build Powerful Scenarios and Financial Statements

Use switches to create effective scenarios and value drivers
Design and incorporate a company’s income statement, balance sheet and cash flow statement
Construct all necessary schedules

Model a Company’s Capital Structure

Build a Sources and Uses schedule in a model
Recapitalize a company’s balance sheet
Properly incorporate Senior Term Debt
Create a robust bank operating line (or revolving credit facility) with a cash sweep
Incorporate a variable interest rates based on pricing grids
Build a provision for non-cash Payment in Kind (“PIK”) interest on various pieces of debt
Create a well-designed shareholders’ equity schedule
Properly forecast the company’s balance sheet
Understand model circularity
Learn to create a “circular reference breaker” to rid a model of undesirable error messages when the model crashes
Understand and insert operating and credit ratios