Forecasting and Stress Testing
Use debt capacity analysis and cash flow forecasts as a tool in making and supporting credit recommendations with the focus on stressing key assumptions and building various scenarios (base, downside and breakeven).
This workshop equips participants to:
- Set realistic and defensible assumptions based on their understanding of the company’s business and financial strategy
- Model a company’s future debt servicing ability based on cash-flow forecasts and sensitivities which are consistent and supportable in the current economic climate
- Use debt capacity forecasts to quantify sustainable debt levels in context of business strategy, market conditions and potential corporate actions
- Adapt a basic cash flow model to reflect industry drivers and company specific reporting considerations
- Create and sensitise base case, breakeven and downside case scenarios to determine the effectiveness of covenants and the company’s ability to service debt under various scenarios.