Determining an entity's ability to generate cash flow is essential whenever repayment of a loan will extend beyond one year. Cash flow analysis measures an entity's ability to generate sufficient cash to operate successfully and have excess cash to service annual debt payment requirements. Understanding how to calculate and interpret cash flow is essential for successful financial institutions.
Objectives of the Presentation
- Comparison of traditional cash flow method (Net Income + Depreciation + Interest divided by Annual Debt Service) to the UCA model
- Rules of cash flow
- Accrual basis versus cash basis of preparing financial statements, and how cash flow analysis links the two
- How each amount on a universal cash analysis is calculated and the meaning of each
- A fast cash analysis method that can achieve the same results in less time than the UCA method
Why Should you Attend
Learn how to calculate cash flow using the Universal Cash Flow Analysis method (UCA), which determines the flow of cash into and out of a business entity. First, we'll define cash flow and identify potential sources and uses of cash. Next we'll illustrate how cash flow analysis is actually the process of converting an Accrual Basis financial statement into a Cash Basis financial statement. We'll cover the Rules of Cash Flow when determining cash flow generation from changes in asset, liability and capital accounts on balance sheets over time. We'll culminate by using a full UCA from beginning to end.
Leave with a good understanding of how cash flow is calculated and more importantly, how to interpret its meaning.
Jeffery W. Johnson,
Senior Vice President and Commercial Banking Division Manager ,
Citizens Trust Bank of Atlanta
Jeffery W. Johnson started his career with SunTrust Bank in Atlanta as a Management Trainee and progressed to Vice President and Senior Lender for SouthTrust Bank (a large Southeastern Regional Bank) and Senior Vice President and Commercial Banking Division Manager for Citizens Trust Bank of Atlanta (Community Bank).
Most of his career has been spent in Credit Administration, Lending (Commercial, Consumer and Real Estate), Business Development, Loan Review, Management and Training & Development. He has managed loan portfolios representing a cross section of loan types including: Large Corporate, High Net Worth Individuals, Middle Market Companies, Small Businesses, Real Estate and Non-Profit Organizations and managed several loan officers with portfolio management responsibilities.
Mr. Johnson is now a training professional in the banking industry by leading various seminars covering important topics relating to issues in banking. He teaches actively for fifteen state banking associations in the United States, Risk Management Association (RMA) and individual banks nationwide. He co-authored a training course entitled "Lending to Service and Other Professional Organizations" for RMA in 2001.
Mr. Johnson earned a B.A. Degree in Accounting from Morehouse College in Atlanta, GA; a MBA in Finance from John Carroll University in University Heights, Ohio; Banking Diploma from Prochnow School of Banking at the University of Wisconsin-Madison and a Graduate Certificate in Bank Management from the Wharton School of Business at the University of Pennsylvania.