COURSE OUTLINE

1. INTRODUCTION

A. The purpose of Financial Analysis

B. Conventional vs. ABL

2. BALANCE SHEET RATIOS/ANALYSIS

A. The Quick or “Acid Test” ratio

B. The Working Capital or Current ratio

C. Tangible Net Worth analysis

D. Leverage ratio analysis (“DTW”)

E. Days Sales Outstanding (“DSO”)

F. Days Purchases Outstanding (“DPO”)

G. Inventory Turnover

H. Analyzing “true” liquidity in A/R and Inventory using ABL guidelines

I. How the ABL revelations impact the liquidity ratios

J. What is the “Gearing Ratio”?

K. LIFO inventory and its possible impact on debt service capabilities

3. INCOME STATEMENT ANALYSIS

A. Tracking sales trends

B. Analysis of Cost of Goods Sold (“COGS”)

C. Tracking Gross Margin trends vs. industry comparisons

D. Analyzing “Below the line” items as a % of sales

E. EBITDA vs. Interest Coverage

F. Cash Flow vs. Debt Service Obligations and the impact on Working

Capital

G. Breakeven sales analysis

4. SUMMARY

A. Connecting the dots to create a global or macro outlook