Common challenges when performing Global Cash Flow Analysis
Sageworks recently hosted a webinar, Global Cash Flow Analysis: What, When, Why and How, which featured David Matricciano, owner of DM Analytics LLC, and Chuck Nwokocha, director of advisory services at Sageworks. They discussed best practices, adjusting for double counting and inconsistencies with spreadsheet-based programs. During the presentation, more than 120 financial institutions were polled on their biggest challenges when performing Global Cash Flow Analysis. Almost 40% expressed difficulty combining personal and business incomes as their biggest challenge.
Some of the other common challenges mentioned by bankers were:
– Getting complete financials from the customer and loan officer.
– Getting financial information for businesses that are not directly part of the loan application/applicant.
– Deciding the percentage ownership in each entity between respective guarantor(s).
– Complex ownership of multiple entities where only minority portions of the other entities are owned.
– Difficulty in determining an appropriate amount of personal living expense.
– Trying to isolate recurring from non-recurring and providing adjustments for changes in the balance sheet (i.e. cap ex, debt reduction, investment liquidation).
– Obtaining the ‘Other Debt Service’ of other entities.
For more in-depth information on the biggest obstacles credit analysts face with global cash flow, download the whitepaper titled: The Definitive Guide to Global Cash Flow.
To learn how Sageworks can help your institution accurately and efficiently perform global cash flow analysis, watch a video.