Elite - Professional Training & Development

Analysing an SME is not the same as analysing a listed company. Accounts may be unaudited or prepared mainly for tax, owner and business finances are often mixed, a few customers or suppliers dominate, and figures can change sharply from one year to the next. Owners may understand their business well but not their numbers, while lenders and support agencies need a reliable view of risk from limited information.

This programme builds a practical method for SME financial analysis. It moves through five stages: understanding and adjusting SME financial statements, analysing performance and financial position with ratios, focusing on cash flow and working capital, forecasting and assessing funding needs and repayment capacity, and turning the analysis into decisions and advice.

Built on recognised practice. The programme references the IFRS for SMEs Accounting Standard issued by the IASB, established ratio and cash flow analysis methods, and the credit assessment principles used by banks and development finance institutions, such as the five Cs of credit. Participants apply them to incomplete and imperfect SME information, not only to clean textbook accounts.

Decisions this programme improves. Whether an SME is profitable in cash terms as well as on paper; how much working capital it really needs; whether it can afford a loan and on what structure; which risks and warning signs need further questions; and what an owner should change first to strengthen the business.

How it is delivered. Twenty hours across five sessions, built around one running case: a growing family-owned trading and services business applying for finance. Participants normalise its accounts, build a ratio and cash flow analysis in a spreadsheet, prepare a simple forecast with scenarios and present a financing recommendation.

In-house option. For organisations, the programme can be tailored to your own lending products, credit templates, sectors and SME support programmes, and delivered to credit, relationship and advisory teams together.

Who Should Attend

Bank staff: SME relationship managers, credit analysts and credit officers

Development and support agencies: staff of SME funds, enterprise development bodies and guarantee schemes

SME owners and managers who want to understand and improve their financial position

Finance staff in small and medium-sized businesses

Advisers and consultants supporting SMEs with finance and business plans

Objectives

Explain the main features and limitations of SME financial statements

Adjust SME accounts for owner-related items, one-off events and inconsistent treatments

Calculate and interpret profitability, efficiency, liquidity and solvency ratios

Build and interpret a cash flow statement from the income statement and balance sheet

Analyse the working capital cycle and estimate working capital needs

Calculate break-even and assess how changes in volume and cost affect profit

Prepare a simple financial forecast with base, downside and upside scenarios

Assess debt capacity and repayment ability using coverage measures

Identify early warning signs of financial distress in an SME

Present a clear, evidence-based conclusion to a credit committee, investor or owner

Course Outline

Understanding SME Financial Statements

What makes SMEs different: ownership, scale, concentration and information quality
Income statement, balance sheet and cash flow statement: how they connect
The IFRS for SMEs Accounting Standard and local reporting practice
Audited, reviewed and management accounts: levels of reliance
Normalising accounts: owner remuneration, related parties and one-off items
Obtaining and checking supporting information: bank statements, tax returns and invoices

Analysing Performance and Financial Position

Horizontal, vertical and trend analysis
Profitability: gross, operating and net margins; return on assets and equity
Efficiency: receivable, inventory and payable days
Liquidity and solvency: current ratio, quick ratio and gearing
Sector comparison and its limits for small businesses
Reading the story behind the ratios

Cash Flow and Working Capital

Profit versus cash: why profitable SMEs run out of cash
Building an indirect cash flow statement
The cash conversion cycle and working capital needs
Overtrading and growth funding pressure
Managing receivables, inventory and supplier terms
Short-term cash flow forecasting

Forecasting, Funding Needs and Repayment Capacity

Cost behaviour, contribution margin and break-even analysis
Building a simple three-statement forecast
Scenarios and sensitivity analysis
Debt service coverage and interest cover
Choosing suitable finance: overdraft, term loan, leasing, trade finance and Islamic finance structures
Collateral, guarantees and the five Cs of credit

From Analysis to Decision

Early warning signs of financial distress and fraud indicators
Qualitative factors: management, market position and succession
Uses of digital data sources and automated scoring in SME assessment: potential and limits
Structuring a credit or investment recommendation
Advising SME owners on improving financial performance
Action plan: applying the method in your role

Competencies

SME financial statement analysis

Normalisation of SME accounts

Ratio and trend analysis

Cash flow and working capital analysis

Break-even and cost behaviour analysis

SME financial forecasting and scenarios

Debt capacity and repayment assessment

Early warning signs of financial distress

Credit and investment recommendation writing

Live Online

Access Elite Academy’s complete training portfolio live online. Organizations, distributed teams and professionals can join scheduled interactive sessions or request any program to be delivered online, subject to scheduling and delivery requirements. Elite Academy’s Live Online Training provides access to our complete portfolio of professional programs without linking availability to a physical destination. Organizations, multi-location teams and individual professionals can join scheduled instructor-led sessions or request any program from the Elite Academy portfolio for live online delivery, subject to scheduling and delivery requirements. The format preserves real-time interaction, expert guidance and practical learning while removing the need to travel. Browse the current Live Online schedule below or request your preferred program and dates.

Financial Analysis for SMEs