Course

Course Summary
Credit Type:
Course
ACE ID:
ABAN-0161
Organization:
American Bankers Association
Location:
Classroom-based
Length:
16 weeks (45 hours)
Dates Offered:
Credit Recommendation & Competencies
Level Credits (SH) Subject
Upper-Division Baccalaureate 3 Analyzing Financial Statements, Financial Accounting, or Financial Accounting and Analysis
Description

Objective:

The course objective is to understand business industries and types, plus why they borrow money; introduce basic concepts of business financial accounting and entity structures and explain the analysis of business financial statements and tax returns, including cash flow statements; and discuss personal financial statements and tax returns, as well as combining business and personal cash flows into a global analysis.

Learning Outcomes:

  • Explain the operating cycles of various business industries
  • Analyze the financial data and evaluate the risks of the different industries
  • Define the basic types of legal structures available to a business
  • Explain the different types of financial statement preparation
  • Describe operating expenses and net profit analysis
  • Explain how to use industry data when performing a ratio analysis
  • Compare the formats of the banker-prepared Uniform Credit Analysis (UCA) cash flow model and the accountant-prepared statement of cash flows (SCF)
  • Calculate and interpret the liquidity ratio, unsecured debt ratio, and debt-to-income (DTI) ratio
  • Develop aglobal cash flow and global debt service coverage (DSC) for a borrower.
  • Describe the general characteristics of the four stages in the business life cycle
  • Identify balance sheet considerations
  • Describe the considerations a lender needs to take into account when using ratios to evaluate financial performance
  • Identify cash flow statements and reports
  • Describe why a cash budget is a critical tool of financial statement analysis
  • Describe the basic formats for personal financial statements
  • Identify the information that is reviewed and verified prior to analyzing the personal financial statements
  • Use tax return information to develop a personal cash flow

General Topics:

  • Business sectors and operating cycles
  • Why businesses borrow
  • Business legal structures and life cycles
  • Introduction to business financial statements
  • How business financial statements are constructed
  • Income statement analysis
  • Balance sheet analysis
  • Ratio analysis
  • Cash flow analysis
  • Uniform Credit Analysis (UCA) model
  • Cash budgets and pro forma financial statements
  • Types of personal financial statements
  • Key ratios and adjusted net worth
  • Personal tax returns and cash flow
  • Combining business and personal cash flow into global cash flow
Instruction & Assessment

Instructional Strategies:

  • Computer Based Training
  • Discussion
  • Practical Exercises

Methods of Assessment:

  • Examinations
  • Quizzes

Minimum Passing Score:

70%
Supplemental Materials