Basics of Credit Management- A Practical Approach with MCQs

The course is meant for whom?

• This course is ideally suited for bankers and finance professionals who want to rise in their career
• This course is for those individuals who have discovered their weaknesses and gaps in knowledge and skills and wish to overcome them.
• This course is also suited for students of Commerce and Finance to develop their insights and skills in banking

What you’ll learn?

• Banking Risks and Lending Principles
• Due Diligence in Credit
• Feasibility and Viability Study
• The legal aspects of Sole Proprietorship, Partnership Firm, and Company
• The Borrowing Powers of a Company
• Financial Statements
• Balance Sheet Structure and its concepts
• Income Statement
• How to Analyse Income Statement
• Ratio Analysis and how to Analyse a Financial Statement
• Computation of Working Capital Loan by Applying Turnover Method and MPBF Methods by a banker
• Term Loan Characteristics
• DSCR Concept in whole and applying a bank’s benchmark ratio for decision making
• Break-Even Analysis
• How to prepare a Depreciation Schedule?
• How to calculate Repayment Schedule?
• How to calculate Insurance Premium?
• How to process a Term Loan through Case Studies?
• How to take credit decisions by applying a Bank’s Benchmark Ratios?
• You can download a file containing tons of MCQs to cement your understanding.

What are the Pre-Requisites for this course?

• No prior knowledge is required for enrolling in the course. Just stay focused while learning and take notes.
• An internet connection and a Laptop/PC/Mobile/Tablet.

 How will you benefit from this course?

Please attempt the following questions: 

Question 1. Do you find difficulty in understanding banking credit and finance matters? 

Question 2. Are you comfortable with Balance Sheet Analysis, Profitability Analysis, Ratio Analysis, DSCR, Working Capital Assessment, Term Loan Appraisal, etc.?

Question 3. Are you a student of commerce or finance preparing for your exams? 

Question 4. Are you a Branch Head or a Credit Officer working in a bank or a finance company, engaged in creating a quality loan portfolio? 

If your answer to the above questions is ‘Yes, then this course is meant for you.

How will you benefit from this course?

This course will help you to rise in your career. It will help you to understand the fundamentals of credit, legal aspects, and finance-related aspects and also prepare you to work out the financial statements and analyse them, all by yourself. The focus of this course is to clear the concepts and take you to the world of financial statements and their analysis. You will learn to work out financial statements and analysis through ratios hands down in excel format and take credit decisions as per the bank’s benchmark. The Course is a blend of Conceptual and Practical aspects of Credit Management.

How is this course different?

• Focus on banking concepts with Practical Inputs
• Focus on Legal Concepts
• Focus on Finance Concepts with Case Studies
• Step-by-step calculation of Financial Statements in Excel with Analysis
• Step-by-step calculation of Financial Ratios in Excel with Interpretation
• Helps you to decide on a Loan Proposal based on your findings and Bank’s Financial Benchmarks
• The course contains tons of MCQs with each module to reinforce learning.
• There are lots of reference materials to browse on the subject.

How is the course designed?

The Course is divided into 10 sections with several lectures in each of them.

The 1st Section deals with Principles of Lending, containing 6 lectures. Here you will learn the Banking Risks and Lending Principles, Due Diligence in Credit, 3 Cs and 6 Ps of the Borrower, MASTDAY Principle on Security and Feasibility and Viability Study

The 2nd Section deals with Different types of Borrowers, containing 6 Lectures. Here you will learn the legal aspects related to Individual businesses, Sole Proprietorship Firms, Partnership Firms, Public Limited and Private Limited Companies, One Person Company and Limited Liability Companies

The 3rd section deals exclusively with the Borrowing Powers of Companies.

The 4th section deals with different Financial Statements.

The 5th section deals with Balance Sheet Concepts containing 3 lectures. You will learn with examples the Balance Sheet Structure and its interrelationships, the calculation of Reserves and Surplus, the Concept of Depreciation and its calculation, the concept of Gross Block and Net Block, and the concepts of Intangible Assets, Investments, and Current Assets.

The 6th section deals with Income statements in detail and its analysis with examples and case studies in 2 lectures.

The 7th section deals with Ratio Analysis and its Interpretation in 7 lectures. Here you will learn about the Ratios in general and also Liquidity Ratios, Solvency Ratios, Turnover Ratios, and Profitability Ratios with hands-on work with case studies in excel format. In the end, you will find an interpretation of the Ratios with case studies.

The 8th section deals with Assessment of Working Capital Loan containing 5 lectures. Here you will learn the concepts of Working Capital, Working Capital Cycle, the interrelation of Margin and Drawing Power with CC Limit, Turnover Method of computation, and MPBF Methods of Assessment with case studies.

The 9th section deals with the Term Loan Appraisal containing 7 lectures. You will learn the concept of Term Loan, Calculation of Depreciation, working out Repayment Schedule, Insurance Schedule, Concept of DSCR and its calculation, working out Security Coverage Ratio, Concept of Break-Even and its Analysis with Case Studies.

Finally, in the 10th section, you will find a Term Loan Case Study in 7 lectures with the hands-on working of Project Cost and Means of Finance, various schedules, Profit & Loss Account, DSCR, Reserves and Surplus, Cash Flow Statement, and Balance Sheet.

What are the takeaways of this course?

By the end of this course, you will have learned the fundamentals of credit, legal aspects, and finance-related aspects.

Get started today and learn more about credit management & financial management

• Understanding Banking Risks and Lending Principles.
• Understanding Due Diligence in Credit.
• Understanding Feasibility & Viability Study.
• Understanding the legal aspects of Sole Proprietorship, Partnership Firm & Company.
• Understanding the Borrowing Powers of a Company.
• Understanding Financial Statements.
• Understanding Balance Sheet Structure and its concepts.
• Understanding Income Statement.
• Learning how to Analyse Income statements.
• Understanding Ratio Analysis and Learning how to Analyse a Financial Statement. Taking decisions by applying the bank's benchmark ratios.
• Learning Computation of Working Capital Loan by Applying Turnover Method and MPBF Methods by a banker.
• Understanding Term Loan Characteristics.
• Understanding the DSCR Concept as a whole and applying the bank's benchmark ratio for decision making.
• Understanding Break-Even Analysis.
• Learning how to prepare a Depreciation Schedule.
• Learning how to calculate Repayment Schedule.
• Learning how to calculate Insurance premiums.
• Learning how to process a Term Loan through case studies.
• Learning how to take credit decisions by applying bank benchmark ratios.

Requirements

• No prior knowledge is required for enrolling in the course. Just stay focused while learning and take notes.
• An internet connection and a Laptop/PC/Mobile/Tablet.

Advice to Students

• Download the MCQs and the Reference Materials.
• Go through each module one by one and make notes.
• Attempt all the MCQs and self-check your progress.

COURSE OUTLINE

MODULE# 1- PRINCIPLES OF LENDING

• Banking Risks & Lending Principles
• Due Diligence in Credit
• 3 C’s of the Borrower
• 6 P’s of the Borrower
• MASTDAY Principle on Security
• Feasibility & Viability Study
• MCQs

MODULE# 2- TYPES OF BORROWERS

• An Introduction
• Individual Borrower
• Partnership Firms
• HUF  
• Company Features  
• Hybrid Companies   
• MCQs

MODULE# 3- BORROWING POWERS

• Borrowing Power of a Company  
• MCQs

MODULE# 4- UNDERSTANDING FINANCIAL STATEMENTS

• What are Financial Statements
• MCQs

MODULE# 5- UNDERSTANDING BALANCE SHEET

• Balance Sheet Structure & Concepts  
• Assets- Fixed Assets  
• Intangible Assets, Investments & Current Assets  
• MCQs

MODULE# 6- INCOME STATEMENT

• What is an Income Statement    
• Analysis of Income Statement   
• MCQs

MODULE# 7- RATIO ANALYSIS & INTERPRETATION

• Introduction to Ratios        
• Liquidity Ratios               
• Practical WorkOut with Liquidity Ratios   
• Solvency Ratios  
• Turnover Ratios   
• Profitability Ratios 
• Interpretation of Ratios  
• MCQs

MODULE#8- ASSESSMENT OF WORKING CAPITAL LOAN

• What is Working Capital Loan   
• Working Capital Cycle   
• CC Limit, Margin & Drawing Power  
• Turnover Method of Assessment
• MPBF Methods of Assessment with Case Study
• MCQs

MODULE#9- APPRAISAL OF TERM LOAN

• Characteristics of Term Loans 
• Calculation of Depreciation  
• Drawing Repayment Schedule
• Calculating DSCR  
• Security Coverage Ratio  
• Break-Even Analysis  
• Break-Even Case Study  
• MCQs

MODULE#10- TERM LOAN CASE STUDY

• Technical & Financial Parameters  
• Project Cost & Means of Finance 
• Working on Various Schedules  
• Profit & Loss Account, DSCR & Res & Surplus
• Cash Flow Statement  
• Balance Sheet  
• Analysis of the Case Study