Course Overview
What is Financial Modelling? Financial Modelling (FM) is an essential skill for Financial Analysis that anyone dealing with business must-have.
Discover and learn how to have an impact on decision making and the performance of a business through a variety of financial models that could dictate the future direction and growth of a commercial organisation.
How to Build a Financial Model? The opening part of the course practically applies Excel within a financial framework to study and explore how forecast financial models can be efficiently built and modified.
The efficient use of Excel is key and so the course starts by confirming the participants can quickly and accurately harness Excel’s tools and functionality.
The succeeding part of the course will foster the best practice approaches to structuring and presenting fully flexible and auditable forecast financial models appropriate for analysis, financial structuring and/or valuation.
Through this Zoe training course, you will learn the tried and tested habits and techniques to minimize errors, and make models easy to interpret, adapt and audit.
Course Objectives
Upon completing this Financial Modelling Certification Course successfully, participants will be able to:
- Forecast an Income Statement, Balance Sheet and Cash Flow Statement (CFS), given a set of forecast expectations and assumptions
- Build all formulae plainly and correctly
- Balance your balance sheet each and every time from your well-constructed CFS
- Compute interest income and expense based on average balances, and prudently control the resulting intentional circularity
- Check your complete model for errors and save it in a professional way, ready to be shared with colleagues or clients
Training Methodology
This collaborative Financial Modelling Certification Course will comprise of the following training methods:
- Lectures
- Seminars & Presentations
- Group Discussions
- Practical Assignments and Hands-on experience
- Application of broad and extensive excel based case studies and real-life examples
Just like all our other courses, this training program also follows the ‘Do-Review-Learn-Apply’ model.
Organizational Benefits
Companies who nominate their employees to participate in this Financial Modelling Certification Course can benefit in the following ways:
- Demonstrate and prove knowledge of modelling, income statements, cash flows, assets and liabilities
- Understand and Know the relationships between items in financial statements
- Recognise tax computations, managing tax losses and the financial modelling of deferred tax
Personal Benefits
Individuals who participate in this Financial Modelling Certification Course can gain from it in the following ways:
- Build, interpret, review and audit financial models containing forecast integrated income statements, cash flow and balance sheet
- Numerous practical, hands-on exercises are performed to demonstrate all the basic excel features and functionality, from basic navigation through to more complex ‘lookup’ functions
- Take your Excel skills to the level required in order to start to build a financial model with numerous practical, hands-on exercises to show all the basic, features and functionality
Who Should Attend?
Professionals in corporates and financial institutions who require to make useful and robust financial models and desire to raise their financial valuation skills to a superior level. Participants must be able to practise and use the basic facilities of Microsoft Excel and have basic accounting knowledge.
Course Outline
The course covers the following areas important to understand and practise Financial Modelling:
Module 1: Key Excel Functions/Functionalities/Applications relevant for Financial Modelling
- Mathematical and Statistical Functions
- Text and Logical Functions
- Lookup and Reference Functions
- Financial and Date Functions
- Worksheet Editing Techniques
Module 2: What-If Analysis and Decision-Making Tools
- Scenario Manager
- Goal Seek
- Data Table (Sensitivity Analysis)
- Solver
- Exercises and Analysis
Module 3: Financial Modelling (Concepts) – Introducing Valuation and Techniques
- Need for Valuation
- Difference between Price and Value
- Different terms of Value (Market Value vs. Intrinsic Value vs. Book Value)
- Concept of Equity Value Vs. Enterprise value (EV)
- Different Techniques of Valuation
Module 4: Financial Modelling (Concepts) – Absolute Valuation
- Discounted Cash Flow Model (DCF)
- Dividend Discount Model (DDM)
- Free Cash Flow to Firm (FCFF) vs. Free Cash Flow to Equity (FCFE)
- Terminal Value Derivation
- Discount Rate – Cost of Equity, Cost of Debt & Cost of Capital
Module 5: Financial Modelling (Concepts) – Relative Valuation
- Identifying Right Peers/Deals
- Multiples analysis – EV/Sales, EV/EBITDA, EV/EBIT, P/E, P/B, P/CF, P/S etc.
- Trading Multiples vs. Transaction Multiples
- Industry Specific Valuation Multiples
Module 6: Financial Modelling (Concepts) – Sector Specific Valuation (Project Appraisal/Infrastructure/Real Estate)
- Capital Budgeting: Evaluating Capital Investment Projects
- ROI, NPV, IRR and Payback Period Analysis
- Calculation, Merits and Limitations of each
- Project Cost, Funding, IDC etc.
- Exercises and Analysis
Module 7: Financial Modelling (Case Studies/Modelling) – Detailed Financial Modelling Case Studies
- Project Finance Feasibility Modelling
- Business Valuation Modelling
- M&A Modelling (Accretion/Dilution Analysis, Synergy, Financial Consolidation/ Contribution, Goodwill etc.)
Module 8: Overview & Best Practices
- Understanding Financial Model Structure (Flow of the Model)
- Understanding and Creating a Financial Model Template
- Setting up Assumptions, Scenarios, Checks, Data Collection from Public Sources
- Dynamic Timelines, Flags and Counters
Module 9: Building the Financial Statements
- Building the Historical Statements
- Art of Projecting Financials (Identifying Revenue & Cost Drivers; Smoothing and Seasonality)
- Constructing Revenue (Revenue Build-Up) and Expenses (Cost Build-Up: Fixed, Variable and Hybrid)
- Building Various Schedules (Working Capital, Asset, Depreciation, Debt Amortization, Equity, Tax)
- Dynamic Loan Repayment with Moratorium Period, Waterfall Structure, Circularity Switch
- Consolidate & Summarise Financials
- Developing P&L, Balance Sheet & Cash Flows – minding key line items
Module 10: Finishing Touches to the Financial Model
- Key Ratios and Margins Analysis (Profitability, Efficiency, Liquidity, Leverage, DSCR, LLCR etc.)
- Sensitivity Analysis of Key Valuation Output
- Valuation Football Field Analysis
- Dashboards to Present Key Outputs (Advanced Charting)
- List Box, Option Box, Spinner Data Modelling
- Breaking Circular Loops
- Role of Monte Carlo Simulation and Macros in a Model
- Impact of Various Corporate Actions on Valuation
- Breakeven Analysis
- Sum of the Parts Valuation (SOTP)
- Attributes of Effective Modelling
- Auditing and Testing of a Model
- Grey Areas of Business Valuation
- Exercises and Analysis
