Learning Objectives
By the end of this module, you will be able to:
Understand the Importance of Cash Flow
Recognise cash flow as a key measure of financial analysis and debt servicing capacity.
Understand why credit analyst’s prioritise cash over profit when assessing creditworthiness.
Analyse the Statement of Cash Flows
Learn the importance of each of the three main components of cash flows: Operating, Investing, and Financing activities
Identify cash flow drivers such as working capital changes, timing of revenue, and sources/uses of funds.
Develop Analytical and Risk Mitigation Skills
Calculate and interpret key metrics such as Free Cash Flow (FCF) and the Cash Conversion Cycle (CCC).
Identify early warning signs, including cash burn, seasonal pressures, or over-reliance on external funding.
Understand actions clients can take to improve cash flow.
Connect Cash Flow with Other Financial Statements
Link the Cash Flow Statement with the Profit or Loss and Balance Sheet for a full financial picture
Understand the role of non-cash items (e.g. depreciation and amortisation) in profit reporting vs actual cash.
Apply Cash Flow Analysis to Lending Decisions
Practise applying cash flow analysis to real-world credit scenarios.
Recommend credit structures that support client’s need.
Understand the limitations of cash flow analysis and how to integrate qualitative insights into your financial analysis.
