CFI CBCA ACCOUNTING MONITORING AND WARNING SIGNS EXAM ASSESSMENTS & QUIZZES WITH CORRECT SOLUTIONS A+ GRADED

K
CFI CBCA ACCOUNTING




C
MONITORING AND WARNING SIGNS
LO
EXAM ASSESSMENTS & QUIZZES
WITH CORRECT SOLUTIONS A+
YC
GRADED
D
U
ST

, Developing an Action Plan
Consider the following when developing an action plan to address the root problem:
Working Together
Is the client open to working together to resolve the problem?

Restructure the Loan
Is there an option to restructure the loan in a way that will help alleviate repayment pressures?




K
Strategies
Will the client accept strategies such as using a cash flow budget and reducing operating costs,
including a reduction in salary?




C
Account Monitoring and Warning Signs




LO
Identify Early Warning Signs
Course Objectives
-Identify common warning signs that a company has financial difficulties
-Apply quantitative models to predict if companies will run into financial difficulty
-Understand how to deal with problem accounts
YC
Identifying Warning Signs
Session Objectives
-Identify common warning signs that a company has
financial difficulties
D

- Understand symptoms and causes of corporate decline
U


Annual Credit Review Process
An annual review is typically performed using the following components:
1. Financial Statement Review
ST




• Comparative analysis
• Working capital analysis
• Cash flow analysis
• Financial covenant analysis

2. Security Review
• Account receivables
• Inventory
• Equipment
• Real estate
• Personal guarantees & covenants