Learning Objectives
By the end of this module, you will be able to:
Understand Key Financial Statements
Gain a solid understanding of the purpose, structure, and interpretation of the Statement of Profit or Loss, Statement of Financial Position, Statement of Cash Flows.
Understand how each statement helps assess a client’s financial strength, sustainability, and overall creditworthiness.
Interpret Financial Disclosures
Recognise the role of notes to financial statements, which provide context and transparency being reported figures.
Understand how these disclosures reveal risks that may affect a client’s debt servicing capacity and creditworthiness.
Assess the Type of Financial Reporting
Differentiate between General Purpose Financial Statements (GPFS) and Special Purpose Financial Statements (SPFS).
Understand how the type and quality of reporting influence the reliability of data used in financial analysis and lending decisioning.
Use Management Accounts in Financial Analysis
Understand what management accounts are and how they complement statutory financial statements.
Learn how comparing management accounts with statutory financial statements can help you identify performance trends, identify discrepancies, and detect earning warnings of financial stress.
Use Financial Data to Make Sound Credit Recommendations
Integrate insights obtained from financial statements, management accounts, and tax returns to form a complete financial view .
Use this analysis to support credit recommendations, assign appropriate risk grades, and structure loan facilities and covenants that are aligned with the client’s financial capacity and the lender’s risk appetite.
