Financial Statement Red Flags

Understanding early warning signs of credit risk empowers bankers to proactively manage loan portfolio health. By learning to identify key trends and ratios that signal financial weaknesses, bankers can detect issues before they escalate. Applying best practices in prescreening and analyzing loan opportunities ensures more reliable credit decisions, especially for operating companies. Ultimately, this knowledge supports more accurate risk ratings and stronger portfolio monitoring, reducing losses and improving overall credit quality.

Topics covered in this session

Balance Sheet Analysis

• Specific Asset and Liability Accounts
• Trend Analysis
• Liquidity, Leverage, Activity Ratios

Income Statement Analysis

• Revenue Changes
• Specific expense line items
• The fallacy of profitability and DSCR

Statement of Cash Flows

• Cash impacts of asset and liability fluctuations
• Capital Expenditures
• Sources of Financing

Personal Financial Information

• PFS
• Tax returns
• Credit reports

 Who Should Attend:

• Credit professionals
• Lenders
• Risk managers