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Erudite AfricaCenter of Excellence
← Level 2: Credit Analysis and Appraisal

Cash flow, working capital and repayment capacity

Module 02 / 5 · 65 min

Size a facility from the borrower's cash cycle and cash flow, not from what the customer asks for or what the collateral can carry.

In this module you will learn to

  • Compute cash flow from operations and explain why a profitable firm can run short of cash
  • Estimate the working capital gap and size an overdraft with an owner's margin
  • Calculate and interpret the debt service coverage ratio for each year of a term loan
  • Design a repayment schedule, grace period and tenor that match the borrower's cash flow

Built on

  • Erudite Africa training module: Level 2: Credit Analysis and Appraisal (October 2026)
  • Erudite Africa: Credit Analysis Training Program overview (October 2026)
  • A commercial bank's Revised Credit Procedure Manual (August 2025), unnamed
  • NBE directives as listed in the lessons: SBB/87/2024, SBB/88/2024, SBB/90/2024, NBE/INT/13/2026, CRB/02/2019, MCR/01/2020
  • Movable Property Security Right Proclamation No. 1147/2019

Examples and companies are fictional. Bank practices are shown as typical Ethiopian practice, not as any one bank's policy. Always apply your own institution's approved policy and the current NBE directives.