Financial Modeling in Excel - Learn to Prepare Financial Plans!

About Course

Financial Modeling is a quantitative representation of a company’s present and future business operations. Companies of all types and sizes use Financial Modeling every day to analyze and plan their business activities. Financial Modeling / Forecasting serves as the foundation and basis of standard financial accounting reports, including the Statement of Financial Position and the Statement of Comprehensive Income as well as the Statement of Cash Flows.

Course Content

Income Statement

The first step when building any financial model
Items included in an income statement
Use the order of items

Introducing a Cash calculation

Fixed Assets

Balance Sheet

Tax Computations

Shareholdings, Dividends, and Goodwill

Sensitivity Analysis

Discounted Cash Flow Valuation

Weighted Average Cost of Capital

Quality Control

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About Course

What Will You Learn?

Course Content

Income Statement

The first step when building any financial model

Items included in an income statement

Use the order of items

Introducing a Cash calculation

The importance of cash and cash flows

Difference between cash flows and accounting profits

Detailed cash calculation showing all cash flows

Working out interest on cash without resorting to circular references

Time-weighted average cash calculations

Types of debt used by companies

Fixed Assets

What fixed assets are and why do we use depreciation to spread their cost

The importance of not over-depreciating assets

Straight line and reducing balance methods of calculating depreciation

How to build a fixed asset when you only have very restricted information

Alternative ways of calculating fixed asset figures with more information

Balance Sheet

Building the forecasted Balance Sheet

Backing schedules

Using ratios to calculate receivables, payables, and inventory

Using the correct type of backing schedule

Incorporating error traps

Tax Computations

Difference between accounting and taxable profits

Main differences between different tax jurisdictions around the world

The basic steps involved in adjusting from accounting to taxable profits

Calculating capital allowances (tax depreciation)

How to lay out a tax computation

How to deal with tax losses

Deferred tax computations and provisions

Shareholdings, Dividends, and Goodwill

Different types of share

The similarity of the backing schedules

Dividends paid to each type of shareholder

How to calculate dividends on preference shares

Using the payout ratio to calculate dividends for ordinary shareholders

How ‘Goodwill’ arises

How goodwill is treated under various tax jurisdictions

Sensitivity Analysis

What sensitivity analysis is

Can easily be added to a model

Importance of having a well-structured model before trying this

Recap on the calculation of inflation factors

Two different ways of including inflation in a model

Using cut & paste and copy & paste to ensure that all references to an input number are properly uplifted throughout the model

The importance of having backing schedules that allow you to trace each figure back from a model’s report through the backing to the input sheet

Discounted Cash Flow Valuation

The theory behind DCF Valuation and Its Importance

The problems inherent in the assumptions behind DCF theory

How to calculate the DCF valuation of a company

Need to use as many different tools as possible when valuing a company

Weighted Average Cost of Capital

Calculating the cost of debt, ordinary shares, and preference shares

Using the market values of the individual instruments to give a weighted average

Which WACC figures should be used in an acquisition model

Working out separate WACCs for each year for use in the DCF valuation

Quality Control

The critical importance of Quality Control when Developing any model

Methodology for running quality control tests on a model

Presenting sector-wise modeling

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