Cash Flow Analysis and Cash Flow Forecasting for Company Managers

This course has been designed for company managers, management acountants and entrepreneurs who wish to improve their cash flow forecasting skills in order to assess long term company financial performance and company valuations, or to raise debt and equity financing from banks and equity investors.

The core objectives of the course will therefore comprise the following:

• Why cash flow is essential for the successful operation of the client
• Need for increased cash flow based lending particularly for the client in service industries
• The difference between cash flow and profit; accruals concept differentials; why EBITDA does not spell cash flow and why profitable companies can still default
• Assessing Cash inflows and outflows (sources and uses) within the cash flow statement
• Using the cash flow in credit analysis to assess management action
• Distinguishing cash flows from operations, investing and financing
• Review of Cash flow statements in IFRS in the light of accounting changes in Egypt
• The three blocks of cash flows under IFRS / IAS 7 and the six blocks
• Constructing the cash flow in the Indirect and Direct methods
• The use of the debt service coverage ratio (DSCR) as the principal credit risk ratio from forecast cash flow analysis and Proxy ratio and their limitations
• The impact of working capital changes on net operating cash flow
• Why effective working capital management can temporarily increase the company’s cash flow generation and why these improvements might not be sustainable
• Assessing bad liquidity management and how overtrading risks cash flows and the company’s DSCR
• Assessing the impact of risk events on the client’s ability to honour its debt service.
• Application of the risk management framework to client companies
• Sensitivity analysis using cash flow forecasts in excel to assess impact on company DSCR
• Using cash flow analysis and sensitivity analysis to assess the gross and net working capital needs of the client
• Assessing client cash flow management during times of stress