Introduction
Financial Modelling (FM) is a crucial skill for financial analysis, essential for anyone involved in business. This course helps you understand how financial models impact decision-making and business performance, guiding the future direction and growth of a commercial organization. Initially, the course focuses on efficiently building and modifying forecast financial models using Excel. Mastery of Excel’s tools and functionality is fundamental, as the course emphasizes best practices for structuring and presenting flexible and auditable financial models for analysis, financial structuring, and valuation.
Learning Objectives
By the end of this Financial Modelling Certification Course, participants will:
- Forecast an Income Statement, Balance Sheet, and Cash Flow Statement (CFS) based on forecast expectations and assumptions.
- Construct all formulae clearly and correctly.
- Ensure the balance sheet balances every time using a well-constructed CFS.
- Calculate interest income and expense based on average balances, managing intentional circularity.
- Check the entire model for errors and save it professionally, ready for sharing.
Training Methodology
This course includes:
- Lectures
- Seminars & Presentations
- Group Discussions
- Practical Assignments and Hands-on Experience
- Extensive Excel-based Case Studies and Real-life Examples Xcelerate Training Institute follows the ‘Do-Review-Learn-Apply’ model for effective learning.
Benefits for Your Organization
Organizations will benefit from:
- Demonstrating knowledge of modelling, income statements, cash flows, assets, and liabilities.
- Understanding the relationships between items in financial statements.
- Recognizing tax computations, managing tax losses, and the financial modelling of deferred tax.
Benefits for You
Participants will gain:
- Skills to build, interpret, review, and audit financial models containing forecast integrated income statements, cash flow, and balance sheet.
- Practical, hands-on exercises demonstrating basic Excel features and functionalities.
- Enhanced Excel skills necessary for building financial models.
Target Audience
This course is suitable for:
- Professionals in corporate and financial institutions who need to create robust financial models.
- Participants aiming to elevate their financial valuation skills.
- Individuals proficient in basic Microsoft Excel and accounting knowledge.
Course Outline
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
What-If Analysis and Decision-Making Tools
- Scenario Manager
- Goal Seek
- Data Table (Sensitivity Analysis)
- Solver
- Exercises and Analysis
Financial Modelling (Concepts) – Introducing Valuation and Techniques
- Need for Valuation
- Difference Between Price and Value
- Various Terms of Value (Market Value vs. Intrinsic Value vs. Book Value)
- Concept of Equity Value vs. Enterprise Value (EV)
- Different Techniques of Valuation
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, and Cost of Capital
Financial Modelling (Concepts) – Relative Valuation
- Identifying the 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
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
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.)
Overview & Best Practices
- Understanding Financial Model Structure (Flow of the Model)
- Creating a Financial Model Template
- Setting up Assumptions, Scenarios, Checks, Data Collection from Public Sources
- Dynamic Timelines, Flags, and Counters
Building the Financial Statements
- Building Historical Statements
- Projecting Financials (Identifying Revenue and 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
- Consolidating and Summarizing Financials
- Developing P&L, Balance Sheet, and Cash Flows – Key Line Items
Finishing Touches to the Financial Model
- Key Ratios and Margins Analysis (Profitability, Efficiency, Liquidity, Leverage, DSCR, LLCR, etc.)
- Sensitivity Analysis of Key Valuation Outputs
- 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