Financial Modeling
Course Overview:
This course provides a comprehensive, hands-on introduction to financial modeling techniques used in business analysis, investment evaluation, and strategic planning. Participants will learn to build robust and dynamic financial models in Excel that support decision-making, budgeting, forecasting, valuation, and scenario analysis. The course emphasizes practical application, model integrity, and best practices for structuring professional models.
Course Objectives:
By the end of this course, participants will be able to:
- Understand the principles and structure of effective financial models
- Develop integrated financial statements (income statement, balance sheet, and cash flow) in Excel
- Apply techniques for forecasting revenues, costs, and capital expenditures
- Perform scenario, sensitivity, and break-even analysis
- Evaluate investment opportunities using NPV, IRR, and other valuation tools
- Apply best practices in model design, error-checking, and documentation
- Build models suitable for internal reporting and external presentations
Who Should Attend:
- Financial analysts, business analysts, and corporate finance professionals
- Investment professionals, equity analysts, and bankers
- Managers involved in budgeting, forecasting, or strategic planning
- Project finance, commercial, and business development teams
- Entrepreneurs and consultants requiring modeling for business cases
- Anyone who works extensively with financial data in Excel
Course Outline:
Introduction to Financial Modeling
- What is financial modeling and why it matters
- Overview of model types: operational, forecasting, valuation, M&A, project finance
- Principles of good model design: accuracy, transparency, flexibility
- Excel tools and functions commonly used in modeling
- Building a model framework from scratch
Model Design and Structure
- Planning the model: input, calculation, output structure
- Creating assumptions and input sheets
- Designing for modularity and scalability
- Naming conventions, formatting standards, and documentation
- Avoiding common modeling errors
Developing Integrated Financial Statements
- Building the income statement, balance sheet, and cash flow statement
- Linking the three statements logically and dynamically
- Forecasting revenues, expenses, working capital, and capital investments
- Modeling depreciation, interest, and tax
- Checking for balance and integrity across statements
Forecasting and Scenario Analysis
- Creating dynamic forecasts based on key drivers
- Using drop-downs, switches, and flags for scenario control
- Sensitivity analysis using data tables and goal seek
- Building a dashboard for scenario results
- Presenting insights for management decisions
Valuation and Investment Appraisal Modeling
- Time value of money and cash flow valuation principles
- Building a discounted cash flow (DCF) valuation model
- Calculating NPV, IRR, payback period
- Modeling terminal value and WACC
- Evaluating project viability and return on investment
Model Testing, Review, and Best Practices
- Techniques for model auditing and error checking
- Version control and protecting formulas
- Documentation and assumptions log
- Preparing models for stakeholder presentation
- Final case study: build and present a complete financial model for a business case