Financial Analysis for Credit Specialists

Financial analysis is an essential part of the lending process. It reveals a prospective borrower’s financial position, solvency and ability to service debt. The HSE IPAA course is designed for employees of banks and other credit institutions who need to read client financial statements with confidence and justify credit decisions.

Why a credit specialist needs financial analysis

• Risk assessment. Analysis helps estimate the probability of default and reduce credit risk.
• Well-founded decisions. Analysis determines whether to grant a loan, in what amount and on what terms.
• Loan portfolio quality. Regular analysis of borrowers makes it possible to spot deterioration in their position in time.

Where else financial analysis is useful in a bank

• Lending. Analyzing a borrower’s financial statements reveals risks and confirms solvency.
• Risk management. It helps identify and assess credit, market and operational risks and develop mitigation measures.
• Performance evaluation. It makes it possible to analyze financial results, benchmark them against the market and find growth opportunities.
• Asset and liability management. It helps shape the balance sheet structure and select the most profitable projects.
• Strategy. Analysis of financial trends serves as the basis for forecasts and long-term planning.

Skills you will gain

• Working with financial statements: reading and analyzing the balance sheet, income statement and cash flow statement.
• Financial ratios: calculating liquidity, solvency and profitability ratios and interpreting them in economic terms.
• Forecasting: building simple financial models and forecasting future results.
• Sensitivity analysis: assessing the impact of key factors on financial results.
• Industry specifics: features of financial statements of companies in different industries.

Mastering financial analysis lets you make well-founded decisions, work faster and more accurately, and grow professionally.

Curriculum

1. Financial statements

• Balance sheet
• Statement of financial results (income statement)
• Cash flow statement
• Practice: preparing all statements for two companies
• How the three statements are linked
• Practice: reading the statements of an unfamiliar company

2. Financial indicators

• Liquidity ratios
• Profitability ratios
• Asset management ratios
• Other analytical indicators: EBITDA, EBIT, OIBDA
• Practice: ratio analysis of a company
• Practice: comparing the ratios of two companies using the statements from Module 1

3. Taxation issues

• Income that forms the corporate income tax base
• Expenses that reduce the tax base
• Differences between tax and financial accounting, and what conclusions can be drawn from tax documents

4. Planning and budgeting financial indicators

• Which statements drive which indicators
• Inventory and receivables quality indicators
• Cash flow budget: five main steps to prepare it
• Causes of cash shortages and cash gaps
• Types of cash flows and how to analyze them
• Example of preparing a cash flow budget

5. Other types of financial analysis

• Horizontal analysis of financial statements
• Vertical analysis of financial statements
• Quick analysis of financial statements

6. Financial covenants

• Covenants as a tool for reducing credit risk
• Positive and negative covenants
• Examples of covenant use

7. Financial risks

• Types of financial risks
• Possible consequences
• Recommended responses

Classes run regularly, in person in Moscow and online. On completion, participants receive an HSE IPAA certificate of completion.

Tuition

Group tuition fees are listed in the schedule.

Individual tuition fees are available on request.