Ten Things to Look For When Analyzing Profit and Loss Statements
Duration: 120 Minutes
The credit analysis process requires that a lender review a wide variety of financial information. This information includes profit and loss statements, which occasionally are the only financial information that borrowers provide to lenders. This program will examine ten important things that every analyst and loan officer should look for when evaluating the information contained in profit and loss statements. The objective of this program is to provide lenders with a simple checklist that they can utilize whenever they receive a business' profit and loss statement information. At the end of this program, participants will be more comfortable with knowing what to pay attention to when they analyze the profit and loss statement of a business.
Objectives of the Presentation
Key learning objectives include:
Why Should you Attend
- How to interpret the information contained in Profit and Loss Statements
- How to calculate simple cashflow from Profit and Loss Statement information
- How to assess whether a business is successful, from a sales standpoint
- How to calculate and interpret gross profit margins
- How to calculate and interpret operating profit margins
- How to view non-recurring expenses or sources of income
- How to view depreciation and other non-cash charges
This program will allow its attendees to become better acquainted with the type of information contained in Profit and Loss Statements. Lenders should attend this program because they will obtain skills that are necessary in order to make good credit decisions.
Who can Benefit
- The Profit and Loss Statement: What are its limitations?
- Sales: Is the business a growing concern?
- Margins: How do you calculate margins and what do they tell us about a business?
- Cash Flow: How do you calculate cash flow and what should you include in that calculation?
- Onetime expenses or sources of income: How should you treat them?
- Profits: What do they really tell us about a business?
- Composition of sales: How do changes impact a business
- Where do distributions appear on the P & L
- Credit Analysts
- Loan Officers
- Branch Managers
- Loan Committee Members
- Other personnel with lending responsibilities