Description
Constructing and analyzing financial projections to interpret future ability to repay debt, identify the most appropriate type of loan, and to evaluate margins of protection in the event of changes in business, industry or management risks.
Produced by the Risk Management Association
Courses*
*Only available as a series
- LDP 6.1 – Assessing Short-Term Repayment Ability Using Monthly Pro Formas
- LDP 6.2 – Preparing and Interpreting Annual Financial Projections
- LDP 6.3 – Using Projections to Help Determine Appropriate Loan Type
What You’ll Learn
After completing this series, students will be able to:
- Explain the benefits of using financial projections in a credit analysis
- Prepare a pro forma monthly balance sheet to evaluate peak borrowing needs based on a company’s cash budget and projected monthly income statements
- Prepare an annual financial projection
- Interpret the ability to repay debt given assumptions about cash flow drivers and other variables
- Interpret loan types based on projected borrowing needs and repayment sources
- Determine an appropriate repayment schedule for long-term loans
