Syllabus

Session 1

Financial Corporate Crisis Defined

Content

What is Financial Crisis?
Financial Crisis in corporate
Limitation of what constitutes a crisis
Mini and major crisis
Systemic effect of a crisis
Understand amplification effect
The impact of financial crisis to company balance sheet

Session 2

Key Factors to Determine Financial Crisis

Content

Overview of major corporate crisis key factors
Internal and External triggers
Market and non market parameters
Explanation on the impact of factors
Correlational effect of cross factors
Case Study

Session 3

Understand Financial Projection and Tools to Determine Corporate Financial Crisis

Content

Understand the format of generic financial projection on financial statement: assumptions, accounts, Balance Sheet, Income Statement and Cash Flow Statement

Case study: reviewing the financial projection based on the file given
Overview on various corporate financial crisis tools
The use and limitation of each tool

Session 4

Understand Stress Testing

Content

What is stress testing?
Unidimensional and Multidimensional stress test
Historical or conditional scenario
Developing scenarios based on probabilistic measure
Forming alternative
Checking the plausible alternative
Case Study

Session 5

Case Study: Stress Test Model

Content

Managing multi facet stress test
Interpreting the result
Backtesting result based on historical data
Assessing the relative probability of an event occurring

Session 6

Understand the Concept of Balance Sheet Approach

Content

Understand the principal of balance sheet approach
Understand about basic option concept
Application of option concept in corporate balance sheet
Deriving corporate volatility based on market and performance approach
Understand option valuation model Applying option valuation model in corporate financial statement
Case Study

Session 7

Understand the Concept of Probability and Potential Loss

Content

Understand the probability of default and potential loss
Calculate probability of default and potential loss based on option valuation model
Applying the concept of default and potential loss based on option valuation model on corporate financial statement
Modeling crisis by adjusting volatility to reflect volatility on crisis
Applying the concept of default and potential loss on crisis

Session 8

Case Study: Modeling the Potential Loss and Probability Based on Corporate Balance Sheet Approach

Content

Case Study on modeling probability and potential loss based on normal condition and crisis condition by using Balance Sheet Approach

Session 9

Assessing the Future Potential Loss Based on Corporate Financial Projection

Content

Applying long term financial projection to predict potential loss and corporate crisis
Understand the concept of term structure on crisis probability and potential loss during crisis
Comparing the crisis probability term structure with bonds yield curves
Case Study

Session 10

Connecting Loss Prediction by Using Balance Sheet Approach with Stress Testing Scenarios

Content

Determine important risk factors in stress test scenario
Determine the impact of risk factors in company financial statement
Prediction of loss potential and crisis probability by using Balance Sheet Approach
Comparing the result of using BSA with stress testing result

Session 11

Corporate Crisis Risk Mitigation Strategy

Content

Examine various mitigation strategies: on balance sheet vs off balance sheet
Formulating mitigation strategy
Determining the impact of expansion and indebtness on corporate crisis potential
Determine trade off between risk and return
Simulating the potential loss and crisis probability based on mitigation strategies taken

Session 12

Case Study: Formulating Mitigation Strategy and Assessing Potential Crisis

Content

Prepare mitigation strategy alternatives
Adjusting company financial statement based on the strategy taken
Calculate probability of crisis and potential loss during crisis

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