The Income Statement – What a Banker Can Learn About a Borrower from Its Profit and Loss Statement

This topic will explore all aspects of an income statement and Loss Statement and how the information that a profit and loss statement contains about a borrower’s operating performance can assist in making credit decisions. In particular, attention will be paid to those items that constitute cashflow in a profit and loss statement since those items determine repayment ability. The ways in which owners of businesses are compensated will also be examined as salaries are just one method of compensation. Ratios will also be used to determine the sales trends, profit margins, and efficiency that a businesses experiences and ways in which those can be affected.

This program is designed to assist bankers, lenders and credit professionals who want a fundamental understanding of the information that is contained in the income statement. During this program, participants will learn the critical elements of the profit and loss statement and how to use it to assess the operating performance of a business borrower.

Areas Covered in the Session :

  • P&L’s key components—revenue, cost of goods sold, gross profit, operating expenses, profit before taxes, taxes, profit after taxes.
  • Break-even analysis—how much revenue does a borrower need just to cover its expenses.
  • Operating leverage—the smaller the gross profit, the more vulnerable a borrower’s profitability is to declining revenues.
  • Production vs. productivity.
  • Profit margins—gross profit margin, before-tax profit margin, after-tax profit margin.
  • Analysis of return on sales, return on assets, return on equity.
  • Profit vs cash flow—how to convert profit into cash flow.
  • Case Study.
Who Should Attend:

  • Credit Analysts
  • Credit Managers
  • Loan review officers
  • Work-out officers
  • Commercial Lenders
  • Credit Risk Managers
  • Chief Credit Officers
  • Senior Lenders
  • Senior Lending Officers
  • Bank Directors
  • Chief Executive Officers
  • Presidents
  • Board Chairmen


Dev Strischek

A frequent speaker, instructor, advisor, and writer on credit risk and commercial banking topics and issues, Dev Strischek 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 RMA’s Florida Commercial Lending School, the Stonier Graduate School of Banking, and as both an instructor and as a member of the American Bankers Association’s (ABA) Commercial Lending and Graduate Banking School advisory board. 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.

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  • Login Information with Password to join the session, 24 hours prior to the webinar
  • Presentation Handout in .pdf format
  • Presentation from the Speaker
  • Feedback form
  • Certificate of Attendance
  • Recording access Information with Password to view the webinar, will be sent 24 hours after the completion of the Live webinar.
  • Presentation Handout in .pdf format
  • Certificate of Attendance