Why Bankers Spread Financial Statements and Analyze Them
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Speaker : DEV STRISCHEK
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When : Wednesday, August 06, 2025
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Time : 01 : 00 PM EST
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A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Dev is principal of Devon Risk Advisory Group and engages in consulting, speaking and training on a wide range of risk, credit, and lending topics. As former SVP and senior credit policy officer at SunTrust Bank, Atlanta, he was responsible for developing, implementing, and administering credit policies for SunTrust's wholesale lines of business--commercial, commercial real estate, corporate investment banking, capital markets, business banking and private wealth management. He also spent three years as managing director and credit approver in SunTrust's Florida commercial lending and corporate investment banking areas, respectively. Prior to SunTrust, Dev was chief credit officer for Barnett Bank's Palm Beach market. Besides stints at other banks in Florida, Kansas City, and Ohio, Dev's experiences outside of banking include CFO of a Honolulu construction company, combat engineer officer in the U.S. Army, and college economics instructor in Hawaii, Missouri, and Florida. A graduate of Ohio State University and the ABA Stonier Graduate School of Banking, he earned his M.B.A. from the University of Hawaii.
Dev serves as an instructor in the Stonier Graduate School of Banking and the American Bankers Association's (ABA) Commercial Lending. He has also taught at the Florida RMA Chapter’s Commercial Lending School, the Southwest Graduate School of Banking, the Wisconsin Banking School, and the Pacific Coast Banking School. His school, conference, and workshop audiences have included participants drawn from the ABA, RMA, OCC, Federal Reserve, FDIC, FFIEC, SBA, the Institute of Management Accountants (IMA) and the AICPA.
Dev has written
about credit risk management, financial analysis and related subjects
for the Risk Management Association's RMA Journal, and other business
professional journals. He is the author of Analyzing Construction
Contractors and its related RMA workshop. A past national chair of RMA
and former Florida Chapter president, Dev served as a member of the RMA
Journal's advisory board as well as on the advisory board of the Atlanta
Chapter of the Professional Risk Managers' International Association
(PRMIA). He has consulted on business credit policy and credit risk
issues with banks in Morocco, Egypt, and Angola through the US State
Department's Financial Service Volunteer Corps (FSVC). He also served
on the Private Company Council (PCC) of the Financial Accounting
Standards Board (FASB); the PCC reviews current and proposed generally
accepted principles (GAAP) and recommends revisions that simplify their
use for privately held organizations.
In general, financial statements are centered around generally accepted accounting principles (GAAP) in the United States. These principles require a company to create and maintain three main financial statements: the balance sheet, the income statement, and the cash flow statement. Public companies have stricter standards for financial statement reporting. Public companies must follow GAAP, which requires accrual accounting. Private companies have greater flexibility in their financial statement preparation and have the option to use either accrual or cash accounting.
Several techniques are commonly used as part of financial statement analysis. Three of the most important techniques are horizontal analysis, vertical analysis, and ratio analysis. Horizontal analysis compares data horizontally, by analyzing values of line items across two or more years. Vertical analysis looks at the vertical effects that line items have on other parts of the business and the business’s proportions. Ratio analysis uses various ratio metrics to evaluate liquidity, profitability, leverage, and solvency among other analytical relationships.
Areas Covered
- Financial statements—balance sheet, income statement, and cash flow statement
- Quality of financial statements—audited—unqualified, qualified, compilation, review
- Company-prepared vs audited - Spreading financials
- Frequency—monthly, quarterly, annual, other
- Rounding—nearest M, MM. other
- Horizontal analysis
- Vertical analysis
- Ratio analysis - Ratio analysis
- Financial condition—liquidity, leverage
1. Liquidity—quick and current ratios; days inventory, receivables, and payables, net working capital
2. Leverage—debt/worth, short-term and long-term debt
- Financial performance—profitability, solvency
1. Profitability—return on sales, equity, and total assets, gross profit margin, break-even sales point
2. Solvency—earnings retention and dividends, sales/assets productivity, sustainable growth rate
- Repayment ability
1. Interest coverage ratio, current maturities of long-term debt coverage ratio, global debt service coverage
2.Operating cash flow, free cash flow—cash flow coverage ratio
3. Cash flow measures to avoid--traditional cash flow and EBITDA
- Industry comparisons—how does your borrower stack up?
1. RMA Annual Statement Studies of Industry Ratios
2. RMA-Moody’s Probability of Default Industry Comparisons
3. Other sources
Who Should Attend
Credit analysts, credit department administrators, loan reviewers, internal auditors, commercial lenders, business bankers
Why Should You Attend
Financial statement analysis is used by internal and external stakeholders to evaluate business performance and value. Financial accounting calls for all companies to create a balance sheet, income statement, and cash flow statement, which form the basis for financial statement analysis.
Your balance sheet tells you how much value you have on hand (assets) and how much money you owe (liabilities). Your income statement tells you how much money your business has spent, and how much it has earned, over a financial reporting period. That lets you calculate your net profit—the bottom line. Not every business uses cash flow statements because not every business uses the accrual method. With the accrual method, expenses and income are recorded on the books when they are incurred, not when the money actually changes hands. For instance, you may place a $1,000 order to a vendor and immediately record it as a $1,000 expense even if you will not send money to the vendor until later. Similarly, you may invoice a client $1,000, and record that as $1,000 accounts receivable, an asset. A cash flow statement reverses those transactions where you do not yet have cash on hand, so you get a real idea of how much cash you have to work with during a period of time.
Financial statement analysis relies on these documents to assess a borrower’s financial health, and this session will show you how to perform a financial statement analysis.
Topic Background
Financial statement analysis is the process of analyzing a company’s financial statements for decision-making purposes. External stakeholders such as bankers, lenders, and creditors, use it to understand the overall health of an organization and to evaluate financial performance and business value. The borrower’s internal constituents use it as a monitoring tool for managing the finances.
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$160.00
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