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Understanding Personal Cash Flow

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Business Issue - Meeting the credit needs of business owners and emerging affluent and affluent clients presents these special challenges for lenders:

  • Identifying the true value of assets and liabilities
  • Analyzing income tax returns and determining cash flow and the capacity to repay
  • Projecting future cash flow from a variety of sources
  • Separating personal and business-related assets and liabilities

Omega Performance’s Solution - Understanding Personal Cash Flow is Omega Performance's system for building and reinforcing advanced credit skills for small business, commercial, private banking and wealth management lenders. It teaches participants how to reconstruct a borrower’s historical cash flow, determine the real value of personal assets and liabilities, and project future cash flow and loan repayment sources. The core of the system is Omega Performance’s exclusive Decision Strategy™, a step-by-step process for investigating, analyzing and interpreting borrower information.

What Is Included

Understanding Personal Cash Flow contains two self-study modules, each of which covers an important aspect of personal cash flow:

  • Personal Financial Statement Analysis explains how to examine the assets and liabilities listed on a borrower’s personal financial statement and evaluate their effect on the borrower’s ability to repay the loan or to act as a loan guarantor. This analysis also leads to an evaluation of the borrower’s financial strategy and a review of other opportunities to serve the customer.
  • Personal Tax Return and Cash Flow Analysis provides techniques for finding cash inflow and outflow information on a tax return. The Cash Income Worksheet introduced in this module provides a quick, accurate picture of a borrower’s cash income. The module also introduces the Cash Flow Worksheet, a detailed cash flow model for calculating estimated cash flow for the preceding tax year and projecting future cash flow.

Understanding Personal Cash Flow also includes a Pretest, Posttest, and Casebook; a compact disc that contains the automated worksheets; and instructions. The automated worksheets are easy to use and save hours of calculations—time that could be better used in analysis or relationship management.

Delivery Options

To effectively implement Understanding Personal Cash Flow, Omega Performance recommends one of four approaches: self-study, self-study with mentor, self-study plus workshop, or intensive workshop.

Participants generally need 18 to 20 hours to complete the self-study. The standard workshop’s duration is two half days. The intensive workshop, which requires less self-study, is two full days.

Administrative materials include the Administrative Guide, Answer Key, and complete Leader’s Guide. If the workshop delivery is chosen, participants also receive a Workbook.