Series 4: The Cash Cycle, Seasonality, and Discovering Borrowing Causes and Repayment Sources
Course Number: RMA4
Course Code: ABA 171D
Examining a company’s cash cycle and seasonal characteristics. Learn to interpret both short- and long-term borrowing causes and repayment sources.
LDP 4.1 – Business Cash Cycles
LDP 4.2 – Seasonality
LDP 4.3 – Discovering Borrowing Causes and Repayment Sources
After completing this course, students will be able to:
– Identify and measure cash cycles using days’ sales in receivables and days’ COGS in inventory and accounts payable.
– Identify the benefits and limitations of cash cycle analysis
– Determine variations in cash cycles by type of business
– Determine the effects of seasonality of business operations on the cash cycle.
– Interpret budgets of cash receipts and disbursements to estimate the amount and duration of seasonal borrowing needs.
– Identify the benefits and limitations of analyzing interim financial statements.
– Differentiate between seasonal and permanent asset and liability levels.
– Identify borrowing causes including sales growth, change in asset efficiency, change in trade credit, fixed asset expenditures, and change in net worth
– Determine repayment sources that are appropriate matches to each borrowing cause.
The Commercial Real Estate Lending Decision Process and the courses in the curriculum are products of The Risk Management Association.
Audience: Loan trainees, credit analysts, and anyone with commercial lending authority