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Commercial Credit Certificate-Course Description

 

The program consists of seven modules developed through 15 weeks of instruction and a one-week break. The underlying instructional structure of the courses is to prepare students to develop a loan package based on the analysis of the loan application of a business selected by each student in the third week of the program. The Commercial Credit Certificate’s curriculum has the following scope and sequence.

 

 

  • Identify the standard financial analysis process of commercial credit evaluations
  • Introduction to spreading financial information of small firms
  • Introduction to cases studies on credit requests of small firms

 

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  • Describe the role of commercial banking in the economy
  • Describe the standard financial analysis process of commercial credit evaluations
  • Describe the impact of financial crisis and recent regulations on current lending environment
  • Describe the five C’s of credit in commercial credit analysis

 

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  • Spreading financial information into a standardized template for credit analysis
  • Performing comparative and trend analysis using common size financial statements
  • Performing comparative and trend analysis using key financial ratios
  • Analyzing various components of direct cash flow statements
  • Interpreting cash based financial ratios to evaluate debt servicing capability
  • Performing financial analysis of multiple real life cases on commercial credit requests of small firms

 

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  • Differentiating between liquidity and solvency
  • Understanding the traditional measures of liquidity and their shortcomings
  • Performing collateral analysis
  • Interpreting working capital cycle to estimate the future financing requirements
  • Performing sensitivity analysis of the projected financial requirements

 

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  • Estimating risk premium based on credit risk and maturity of loan
  • Estimating the profitability of loan by comparing expected income against loan risk
  • Summarizing credit analysis to make an overall recommendation

 

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  • Conduct an economic analysis involving fiscal and monetary policies, inflationary expectations, consumer and business spending
  • Understand the role of relevant industry variables in credit analysis
  • Analyze market dynamics, cyclicality, and barriers to entry in industry analysis
  • Analyze the role of management, ownership, and organization structure in credit analysis

 

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  • Types of corporate entities and of organization document
  • Understanding the basic steps in a loan transaction
  • Identifying key loan documents
  • Analyzing the fundamental provisions of key loan documents
  • Analysis of term sheets
  • Selecting loan documentation to fit the transaction

 

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  • Summarizing the strengths and weaknesses of a firm by combining the analysis of common size financial statements, financial ratios, cash flow statement, and working capital cycle
  • Identifying specific “mitigants,” or factors that could potentially diminish or alleviate the credit risk

 

 

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Last updated or reviewed on 2/24/15

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