Personal Financial Statements and Tax Returns

Personal Financial Statements and Tax Returns

Length 1 day

Course Goals

In this class, participants will learn to analyze personal financial statements and tax returns to determine the borrower’s ability to provide a secondary or tertiary source of repayment on a loan. 

Participants would not do an actual global cash flow calculation but would examine the elements on the personal financial statement and tax returns that are used to formulate a global cash flow and how these elements might present both risks and opportunities to the bank. 

Course Objectives 

Upon completion of the course participants will be able to: 

• Explain the major accounts on the personal financial statement 
• Analyze the major accounts on the Personal Financial Statement (PFS) for completeness and accuracy 
• Calculate an adjusted net worth 
• Use the Personal Financial Statement (PFS) to evaluate resources available to repay a loan 
• Explain different corporate structures and tax returns including: C Corporations, S Corporations, Partnerships, and Sole Proprietorships 
• Identify key accounts on the tax returns 
• Develop questions to ask about the accounts on the tax returns 
• Perform a simple cash flow on a tax return
• Determine the ability of a guarantor to support a loan 

Format
The Eensight approach is to customize all materials and case studies to reflect the lending environment actually experienced by the participant. Classroom lecture and discussion is supplemented by group exercises and role-play to keep the course both fast paced and interesting. 

A number of cases are used in the class, including personal financial statements and tax returns. The tax returns include two cases for each type of corporate structure including C Corporations, S Corporation, Partnerships, and Sole Proprietorships. Three different personal financial statement cases are used to illustrate key points and one case combines both tax return and personal financial statement information. 

Who Should Attend?
This course is appropriate for anyone who works in a branch setting or in retail banking including: Branch Managers, Assistant Branch Managers, Small Business Lenders, Relationship Managers, and Portfolio Managers.