Day D ONE - Defininf a Corporate, Strategic, and Reputational Risk Including ESG Considerations

Defining a Corporate

• Sole traders, partnerships, and limited liability companies
• What is equity, types of shares and shareholders rights
• Objectives of a company and business model
• How a company is structured and the roles within a company
• Understanding the distinct types of corporate customers and market segmentation
• The life cycle of a corporate – start-up, growth, maturity, and decline

Strategic and Reputational Risk

• What is strategy, defining strategy and strategic thinking
• Strategic models
• Defining corporate ESG considerations
• What is reputational risk, and corporate governance
• Risk management decisions

Corporate banking overview

• Why does a corporate customer come to a bank?
• Positioning the bank, the correct mix of interest vs. non-interest income
• Understanding the distinct types of corporate customers and market segmentation
• Defining the customer relationship – transactional, cross selling, advisory or first call
• The concepts of fairness and transparency in banking transactions

• The life cycle of a corporate – start-up, growth, maturity, and decline
• What is the role of a corporate treasurer?
• How can a bank and the relationship manager add value to the corporate treasurer?
• What needs financing and how can the bank help?

DAY TWO - Fundamentals of Accounting

Introduction to Accounting and Accounting Concepts

• What is accounting?
• Keys accounting concepts; prudence, going concern, matching, materiality, and consistency
• Who are IFRS and what are IFRS standards?
•  What are corporate assets, liabilities, and equity and how do these definitions differ from those used in a bank

• Accounting terms - Cash vs. accruals, accruals, and prepayments, accrued income and deferred income, depreciation and amortisation, goodwill, impairments, costs – types, opex and capex

Introduction to Financial Statements

• Users of the financial statements
• The Income Statement
  • Revenue, cost of goods sold, gross profit, operating profit, net profit, and margin
  • Profitability – gross, operating, and net margins
  • EBIT, EBITDA, and analysis of each
  • Understanding depreciation and inventory valuation
  • Examining both a corporate and bank income statement

More on Financial Statements

• The Balance Sheet
  • Understanding capital employed, capital – sources and uses, balance sheet structure for distinct types of companies, the relationship between the balance sheet and the income statement
  • Goodwill, intangibles, provisions, and treasury stock

• The Cash Flow Statement
  • Profit vs. cash
  • The relationship between the balance sheet, income statement and cash flow statement, operating cash flow, investment cash flow and financing cash flow

• The Statement of Change in Equity
  • Review of a corporate statement

• Building a set of simple financial statements

DAY THREE - Methods of Financing a Corporate Customer

Financing the Balance Sheet

• Funding current and non-current assets
• Cost of debt and the cost of equity
• Dividend capitalisation model, CAPM and WACC

Working Capital and Working Capital Funding Solutions

• Working capital and why it matters – working capital ratios, receivable days, payable days and inventory days, DSO, DIO, and DPO
• Working capital products – RCF’s, invoice discounting/ factoring, and supply chain finance

Long-term Financing

• Secured, unsecured term lending, club, and syndicated loans

• Repayment and collateral protection
• What are covenants, why use them
  • Good design -Conventional and financial
  • Setting covenants - seasonality, information, and general

• Actions upon breach

• Debt and equity capital markets
• Expected loss and the mechanics of credit ratings
• Ratio analysis, credit ratios
• Return ratios including gearing, interest coverage, liquidity, quick ratio, and current ratio, 

Project Finance and Other Forms of Finance

• The nature of project finance
• Understanding the key players in a project finance transaction
• The mechanics of hire purchase and leasing

Corporate credit risk

• Country risk – PESTEL analysis, lessons from history, industries at greater exposure to sovereign credit risk
• Industry risk analysis – maturity cycle, cyclicality, profitability, dependence, regulatory environment, and Porters 5 forces
• Corporate credit risk – using internal and external credit ratings

• Measuring cash flow
• Debt a firm can sustain while maintaining acceptable credit standards

DAY 4 - Correspendent Banking and Cash Management Solutions

Correspondent banking services

• Outline the need for correspondent banking and the role of correspondent banks
• Identify the benefits to a bank of offering clearing services

Cash management services

• Why cash management services are attractive to a bank
• Risks to a bank, KYC - anti-money laundering
• Clearing services
• Correspondent banking – cross-selling opportunities
• Examining what cash management means to a corporate treasury team

Payment and collection services

• Examine the nature of payment operations
• Outline multiple collection types, multi delivery channels, and geographical challenges
• Examine the nature of collection operations
• Identify the issues with domestic vs. cross-border collections
• Define the use of virtual accounts and lock-box services
• Listing potential clients for payment and collection services

Trade finance services

• Risk issues for a corporate conducting a trade finance transaction
  • Country risk, currency risk, commercial risk, and bank risk
• International trade documentation (commercial, official, shipping, insurance)
• Delivery terms, the use and impact of Incoterms 2020
• How a bank provides trade finance solutions to corporate customers through documentary collections (DP and DA), and letter of credit
• Letters of credit – issuing, confirming, and discounting

DAY 5 – Corporate Risk Management and Corporate Valuation

Treasury and risk management solutions

• Defining market risk and how corporate customers are exposed to market risk
• Outlining the corporate solutions offered by a bank to mitigate these market risks
• Forward rates and how they provide certainty of a rate or price
• Interest rate swaps (IRS) – mechanics and cash flow, features and uses in funding
• Use of options and how they can be used to create certainty
• Interest rate options - caps, floors, and collars
• Documentation ISDA Master Agreement and the CSA

Corporate Valuation Approaches

• Fundamentals of corporate valuation - intrinsic vs market value
• Relative vs. absolute value analysis
• Examine return on capital employed (RoCE), return on invested capital (RoIC) return on assets (RoA) and return on equity (RoE)
• Relative value and the use of ratios, including earnings per share (EPS), price/earnings ratio (PE ratio), and price/earnings to growth (PEG ratio)
• Discounted cash flow analysis
• Mechanics of discounting – PV of both free cash flow and terminal value

Real Estate Valuation Techniques

• What is real estate?
• Examining a real estate project feasibility study
• Real estate appraisal techniques
• Cost approach
• Market approach - physical comparison and gross income multiplier (GIM)
• Income approach – net operating income and capitalisation rate

Our Tailored Learning Offering

Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company’s exact requirements? If you’d like to do either of these, we can bring this course to your company’s office. You could even save up to 50% on the cost of sending delegates to a public course and dramatically increase your ROI.

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