0 Part Course  | 
Book places now

SME Financial Analysis

Learn the techniques used in assessing key financial areas of SME credit risk analysis.

A beautiful bridge connecting two banks of a river with skyscrapers in the background

A one-day course

Session 1. Reviewing the Principles of Credit Risk and Financial Analysis

  • SME Finance Training includes the principles of Credit Risk Analysis for SME
  • Fundamental principles of debt repayment for SMEs
  • The risk and return playoff in credit
  • Principle challenges faced in lending to SME companies
  • The importance of trusting management when lending to SMEs
  • Why cash flow is more important in SME lending than profit
  • The distorting impact of the accruals concept on the timing of cash flow generation and debt repayment
  • Different approaches to debt lending for SMEs
  • Accelerating the due diligence and forecasting process for SMEs
  • Case study: Understanding the fundamental risks posed to the bank by lending to a family-run SME trading business and the need to understand the company’s business activities. The delegates will be required to assess the overall credit risk posed by this high growth privately run business.

Session 2. Financial Analysis of the SME

  • The Limitations of relying exclusively on the financial statements for SME financial services analysis
  • The importance of reviewing selected management accounts and understanding the budgeting process implemented by the SME
  • The review of the Income Statement and key areas of creative accounting and manipulation in SME accounts – what to look for
  • Key ratios and drivers that can indicate the potential success of the SME
  • Identification of key profit margins arising from the Income Statement and what they can indicate in terms of the performance of the SME
  • Workshop: The delegates will undertake a financial analysis of an SME company focusing on the Income Statement in this session. The delegates will review the key ratios and margins that can be calculated from the income statement and provide an interpretation of the company’s financial performance and risk profile based on their findings.


Session 3. Quantitative Analysis of the SME Balance Sheet and Assessment of the Company’s Working Capital Needs

  • Undertaking financial analysis of the company using the Balance Sheet
  • Review of fundamental ratio analysis and their use as early warning signals
  • Understanding the SME’s capitalisation and identifying potential dangers as well as the company’s potential debt capacity
  • The importance of understanding the SME’s liquidity position
  • Reviewing the SME’s working capital management and its importance in terms of preserving company liquidity
  • Using the Cash Conversion cycle to calculate the company’s gross and net working capital needs.
  • Assess the working capital needs of the SME company going forward and how to calculate what the company needs to finance its growth going forward
  • The challenges and risks of overtrading and poor working capital management on the company’s credit risk rating.
  • Methods in structuring the SME’s working capital financing.
  • Workshop: The delegates will undertake a financial analysis of the SMEs' balance sheet, calculating the SME company’s key risk and capitalisation ratios. We will also focus on the company’s liquidity position and the importance of good working capital management in preserving the company’s liquidity. We will also review the dangers of overtrading which can and often leads to the end of the going concern.
  • Assessing credit risk in terms of the Debt Service Coverage Ratio
  • Using the key financial ratios to assess the company’s overall debt capacity
  • Assessing the principal areas of principal financial risk and using ratio analysis to assess SME company performance going forward

Session 4. Cash Flow Analysis Workshop

  • Assessing the importance of cash flow analysis in understanding the financial health of the SME
  • Reviewing why EBITDA (earnings before interest and taxes) does not spell Cash flow
  • Drafting a summary cash flow statement to understand the SME’s operating cash flows if a cash flow statement is not available
  • Assessing credit risk in terms of the Debt Service Coverage Ratio
  • This SME finance course concludes its session with an introduction to cash flow forecasting techniques required for debt structuring
  • Case study: The delegates in their project teams will review the financial statements of a medium-sized privately-run chicken meat processing company. They will be required to prepare the company’s historical cash flow statements and assess the company’s working capital needs in light of its existing short-term borrowings.

Our SME Financial Analysis course leader is a professional banking and finance trainer who for 16 years has been training students in banking, finance, SME credit analysis, debt restructuring and loan workout, risk management, strategic management and corporate governance compliance. Cooperating with some of the world’s leading training companies, he has trained delegates from some of the largest industrial and financial institutions across Europe and the Middle East. In parallel to his lecturing career, the trainer has a 25-year career in SME banking and finance, initiated in the City of London. A core element of his work through Capital Advisers is helping companies restructure their debt and equity position to strengthen company viability through their restructured Balance Sheets. It is this practical hands-on experience of balance sheet restructuring that he brings to the courses and workshops that he develops for clients.

In 1993 he joined Hill Samuel Bank, the London-based merchant bank, covering International Project Finance and later became a credit analyst in Asset Based Finance, lending directly to international shipping companies. He briefly joined N M Rothschild in London as a member of the bank’s LBO credit team analysing clients and providing leveraged debt facilities to UK corporations, before joining Charterhouse Bank in 1997, where he began his Corporate Finance career. Assisting companies to strengthen their balance sheets through debt and equity restructuring has been part of his professional work since he started in banking.

In late 1999 he joined EBRD as the bank’s acting deputy director for Romania. In this role, he led teams of credit analysts in identifying and completing a significant number of credit facilities for Romanian and international companies. During his last year in the post in 2002, EBRD financed a total of €500 million in debt and equity financing for projects in the country.

In 2003 he established an investment banking advisory firm which focuses on credit arrangement, capital restructuring, M&A, private placements and IPOs. He and his team work with regional and international clients in firstly restructuring client company balance sheets. Central to this role is identifying companies with good potential credit ratings that will become attractive clients for international banks and financiers. In 2006 his advisory became the exclusive representative of HSBC Investment Bank in Romania.

In parallel, the trainer initiated his career as a professional lecturer in 2003 applying much of the knowledge that he has built up over his extensive banking career to training and developing banking delegates. He is currently developing several tailored courses for leading banking and financial institutions across China, Europe, the Middle East and the Far East. He trains in both English and Spanish.

SME Financial Analysis training addresses the specific areas of holistic credit risk analysis for SMEs:
  • Understanding the core financial metric areas that bankers need to analyse in assessing the credit risks of an SME corporate client.
  • Identifying reasons why businesses typically face problems and mitigating potential risks through credit structuring.
  • Using the company accounts and financial statements as a means for assessing the credit risk of an SME corporate finance client and what to do when those financial statements might not be fully reliable.
  • Quantitative analysis of the corporate company through the use of company accounts and analysis.
  • Explore the Core ratios used to assess the financial analysis of SMEs and their acceptable levels in terms of credit analysis.
  • Management due diligence of financial and working capital management and therefore understanding how well the SME is managing its liquidity.
  • Reviewing the importance of cash flow statement analysis and cash flow forecasting to assess the SMEs' ability to honour their debts.

In many ways, it is easier to lend a billion Pounds over a million. When lending to large corporations, the banker usually has the comfort of assessing the business activities and cash flow generation of large stable companies, with a stable client base. They can also rely on a professional management team running the business and adhering to principles of good corporate governance. In lending to Small and Medium enterprises, the credit officer faces a range of different risks and uncertainties that are often more difficult to assess.

SMEs are also at their most vulnerable during an economic downturn. The current economic crisis that has engulfed European and global economies, generated by the COVID-19 pandemic, is no ordinary recession. The current downturn is not unique in its depth and severity, but like the COVID-19 virus itself, it does not discriminate between strong and weak companies. Closing the economy for months at a time will simply kill off those companies, particularly SMEs that do not have the liquidity to survive this period.

This course focuses on the financial analysis of SMEs and covers those important areas of SME financial statements analysis very often when complete financial information is not always available or reliable. This session is heavily focussed on the need to assess SME business liquidity and SME cash flow management as well as areas of cash flow forecasting for SME companies that frequently do not have significant assets to provide bankers as security for SME loans.

Our SME financial training course is designed for bank relationship managers, corporate credit analysts and credit risk management at financial institutions, who lend to Small and Medium-sized corporate clients or who are seeking to make the transition to SME lending. This course provides a full, holistic review of financial, quantitative credit risk analysis for SMEs which are frequently different to those assessing the credit risk of large corporations.

In addition, participants will cover a range of applied techniques in assessing key financial areas of SMEs' credit risk analysis and of financial statements that cannot always be relied upon to provide a true or fair view of the company. The course also places a heavy emphasis on cash flow forecasting for ‘asset-light’ high-potential SME companies that frequently cannot provide sufficient secondary sources of debt repayment as security for their SME loans.


Learning techniques are a mixture of formal presentations, written materials, assignments and case studies with a heavy emphasis on learning through analysis of practical examples. All case studies are taken from real-life working examples and can include client companies of the bank, particularly non-performing loans. Sharing already developed knowledge and learning to work closely in solving practical issues, is core to the learning methodology of this programme.

This session is designed with active delegate participation as a core theme throughout. Delegates are required to present findings and solutions to colleagues. Pre-course reading and preparation are required by delegates.

Delegate Knowledge

Delegates are understood to be at an intermediate stage of their professional banking careers with significant basic knowledge of credit issues learned in the workplace. It is assumed all delegates have developed knowledge of Excel and its application in forecasting company financials as this will be a key learning tool.

In undertaking the financial analysis of SME case studies, delegates are provided with Microsoft Excel worksheets to devise financial ratios that form part of this SME financial analysis. A working knowledge of Microsoft Excel will therefore be an advantage but not a requirement, for completion of the course.

Have this course presented In-House

  • On a date, time and in a location of your choice
  • Topics expanded or deleted to your bespoke requirements

Have this course pre-recorded

  • Full course recording edited exclusively for your company
  • Files converted to enable housing on your LMS
Trusted By:

We use cookies

In order to show you courses tailored to your profession we use cookies.

To enjoy all the features of this website please accept.