Credit Excellence: Master Your Debt

Course overview

Why is managing debt crucial? A corporation can obtain finances from a variety of sources when it comes to acquiring capital. These sources can be roughly divided into stock and debt. Selling shares of the firm to the general public and institutional investors is a well-liked method of obtaining money. This is true of equity share and preference share issuance.

Debentures, term loans, trade credits, and other forms of debt finance are examples. Both debt and equity have advantages and disadvantages in the corporate world. No one route is thought to be the best. No business chooses to fund its investment from a single source because of this.

Businesses frequently look for the optimum balance between debt and equity. But this is where things become complicated. Up to a point, debt financing might be advantageous for the company. Debt is a deductible business cost that lowers a company’s tax obligation.

Additionally, firms might avoid having their shareholding diluted by outside investors by using debt financing. But how much debt is actually acceptable? If debt finance is given too much consideration, the results for the company might be disastrous. Even though it is experiencing losses, the company must punctually pay its debts in accordance with the law. This necessitates clever debt management.

Debt management is a tactical approach to arranging a company’s obligations in a way that won’t be problematic for the organization. It necessitates carefully calculating the firm’s ability to service its debt and borrowing money in line with that capacity.

Introduction

A corporation may take the first step towards being debt-free with effective borrowing management. It entails establishing a thorough debt policy that will distinctly identify the acceptable quantity of debt inside the company without jeopardizing its credit rating.

What other kind of financing is the company eligible for? Should the company fund its operations with secured or unsecured debt? How much financial leverage ought the company to use? What impact will debt have on the firm’s liquidity? These concerns about the company’s debt financing necessitate a specific debt management structure.

Understanding debt management will help the managers create a capital structure that is optimal and a debt policy that is inclusive. It becomes essential to do this since failing to do so might harm the company’s image and credit rating, which would then limit its capacity to get future finance.

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It covers methods for assessing debt servicing capability, the implications of capital gearing, how to analyses and manage credit risk, and various debt-reduction tactics. Many public sector organizations have recently come under scrutiny for having excessive debt.

To free people from financial traps, deliberate effort is necessary. In this context, it is even more crucial to have a thorough comprehension of the subject. In order to develop a solid understanding of how public debt impacts different businesses, this course also provides a comprehensive image of issues like sovereign loans and the bond market.

Learning Objectives

Upon completing Credit Excellence: Master Your Debt, participants will be able to:

• Recognize the many elements of debt management
• Learn about different debt instruments and how they are categorized based on key characteristics like maturity, coupon, and principal.
• Recognize the many fixed instrument options for the money market and capital markets that a business has.
• Recognize the wholesale and retail debt markets as parts of the debt market’s architecture. Educate yourself on how their operation impacts the state’s economy as well.

Our Unique Training Methodology

This interactive course comprises the following training methods:

• Social learning – Information and expertise exchanged amongst peers via computer-based technologies and interactive conversations including Blogging, instant messaging, and forums for debate in groups.
• Project-based learning
• Mind mapping and brainstorming – A session will be carried out between participants to uncover unique ideas, thoughts, and opinions having a quality discussion.
• Presentations – Participants will be presented with multimedia tools such as videos and graphics to enhance learning. These will be delivered engagingly and interactively.
• Group discussions – The course will incorporate group discussions and debates to encourage active participation and collaboration.
• Case studies – Participants will be presented with realistic scenarios and case studies that demonstrate effective strategies related to the topic. These activities will encourage participants to think critically and apply their knowledge to real-life situations.

Training Medium

This Credit Excellence: Master Your Debt training is designed in a way that it can be delivered face-to-face and virtually.

Course Duration

This training is versatile in its delivery. The training can be delivered as a full-fledged 40-hour training program or a 15- hours crash course covering 5 hours of content each day over 3 days

Pre-course Assessment

Before you enroll in this course all we wanted to know is your exact mindset and your way of thinking.
For that, we have designed this questionnaire attached below.

• What are the different types of debt?
• What are the advantages and disadvantages of taking on debt?
• What strategies can I use to manage my debt?
• How can I best prioritize my debt payments?
• What steps should I take if I am having difficulty repaying my debt?
• What are some tips for avoiding excessive debt?

Course Modules

This Credit Excellence: Master Your Debt covers the following topics for understanding the essentials of the Agile Workplace:

Module 1 – Managing debt fundamentals

• Financial debt
• Debt’s impact on profitability
• Benefits of borrowing money
• Making decisions about capital structures

Module 2 – Debt sectors

• sectors of the debt market: wholesale and retail
• members of the debt market
• Market for used debt instruments

Module 3 – debt-related items

• Features of the instrument: principal, coupon, and maturity
• Interest rate risk, inflation risk, reinvestment risk, and liquidity risk are risks associated with debt instruments.
• Instruments based on coupon modification: Treasury scraps, variable rate bonds, and zero coupon bonds

Module 4 – Risk control and credit evaluation

• Credit score
• Financial factors that affect credit scores
• Rollover risk and liquidity risk are examples of risks and the methodology for managing them

Module 5 – loans to sovereigns

• Overview of government borrowing and lending
• Analysis of debt sustainability
• External and fiscal indicators of debt

Module 6 – Assessment of bonds

• Bond yields and values: value of perpetual bonds and bonds with varying maturities
• yield to completion
• Yield curves: flat, inverted, humped, and normal

Module 7 – Public debt management

• creation of a governmental debt strategy
• government debt management
• policies for government borrowing

Module 8 – Economic Balance and Fiscal Policy

• overview of the BOP’s balance of payment components
• sources of inconsistencies

Post-course Assessment

Participants need to complete an assessment post-course completion so our mentors will get to know their understanding of the course. A mentor will also have interrogative conversations with participants and provide valuable feedback.

• What strategies can I use to pay off debts faster?
• What are some warning signs that I’m in too much debt?
• In what ways can I increase my credit score?
• What are the major risks associated with taking out a loan?
• Are there any tax advantages to managing my debt?
• What should I do if I’m facing financial difficulties?

Lessons Learned

The most important lesson to take away from debt management is to be wise and disciplined with money. It is essential to learn the basics of budgeting and prioritize paying off debts before taking on new debt. Be aware of the potential consequences of taking on too much debt, such as late fees and higher interest rates, and work to maintain good credit by making timely payments and communicating openly with creditors. Lastly, it is important to be proactive when it comes to managing debt and understand that debt management is not a quick solution, but a process that takes consistent effort.

“Master your financial position by adopting a wise debt management strategy!”