Understanding and Applying Cash Flow Analysis

Level: Intermediate

Why you need this course:
After completing this course, you’ll be able to analyze the net cash flows of any risk management activity at any organization and recommend risk management techniques to apply to accidental losses associated with specific cash flows.

Upon successful completion of this course, you should be able to:

• Explain why net cash flows are important to an organization.
• Explain why money has a “time value” and how to determine the present value.
• Calculate the present values of future single payments or streams of future payments using present value tables.
• Explain how to use the net present value and internal rate of return methods to evaluate capital investment proposals.
• Apply the net present value and internal rate of return methods to rank capital investment proposals.
• Calculate the internal rate of return for a capital investment proposal using interpolation.
• Explain how to calculate differential annual after-tax net cash flows for an investment proposal.
• Given a case, evaluate two investment proposals using net cash flow analysis.
• Explain how the recognition of expected losses alters the cash flows of a capital investment proposal.
• Describe the effect that various risk control techniques have on net cash flows.
• Calculate the net present value and the internal rate of return on a capital investment proposal that uses various risk control techniques.
• Describe the effect that various risk financing techniques have on net cash flows
• Calculate the net present value and the internal rate of return on a capital investment proposal that uses various risk financing techniques.
• Describe the effect that a combination of risk management techniques has on net cash flows.
• Calculate the net present value and the internal rate of return on a capital investment proposal that uses a combination of risk management techniques.
• Explain how to consider uncertainty in cash flow analysis.
• Select the risk management technique that offers the highest net present value and internal rate of return for a given capital investment proposal.

Cost: $20 per Professional Development Hour (PDH). Information on Professional Development Hours (PDH) provided can be found here.

Understanding and Applying Cash Flow Analysis Topics Include:

• Net Cash Flows
• Time Value of Money
• Calculating Present Values of Future Payments
• Evaluating Capital Investment Proposals
• Calculating Internal Rate of Return for a Proposal with Interpolation
• Calculating Differential Annual After-Tax Net Cash Flows for a Proposal
• Evaluating Proposals Using Net Cash Flow Analysis
• How Expected Losses Alter Cash Flows of a Proposal
• Various Risk Control Techniques and Their Effects on Net Cash Flows
• Calculating Net Present Value and Internal Rate of Return on a Proposal That Combines Risk Management Techniques
• Uncertainty in Cash Flow Analysis
• Selecting Risk Management Techniques That Offer Highest Net Present Value and Internal Rate of Return for a Proposal

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