4 Day Financial Modelling Masterclass

Transcription

1 Overview This comprehensive course is divided into 2 modules. Module 1 is an extensive appreciation of Excel s data management, reporting and modelling functionality. It covers an introductory discussion of the concepts of financial models, types of models and examples of a deterministic model. Spreadsheet engineering is a vital part of model construction and is geared to give delegates an in-depth understanding of all important Excel functions and techniques. Ultimately it provides comprehensive preparation for the process of model building. All Excel functions and techniques essential for successful model building and managing, manipulating and reporting Excel data are fully demonstrated and supported by appropriate examples. An introduction to Visual Basic and recording macros is also covered. Module 2 commences with a detailed explanation of best practice modelling methodology, structure, process and sequence. This course focusses on corporate financial models, as distinct from project or transactional models. It explains the requirements and intricacies involved in the preparation and structure of more complex financial models. Delegates, under the supervision of the instructor, are required, in a sequential process, to: a. correct a poorly structured model, (thus identifying basic modelling faults) b. build a complex model from first principles The latter exercise forms the core modelling activity and requires an understanding of the business case and the creation of a comprehensive model specification, as the first step in the model design. Delegates are then led, in a sequential manner, through the model construction process commencing with the creation of the input sheet, necessary support schedules for the income statement and balance sheet, the three financial statements, a detailed analysis of the model results and culminating with the protection of the completed model. Pertinent issues central to modelling such as the design and layout of the financial statements, financial and returns ratios and breakeven analysis are also covered in detail. 1/6

2 Overview (cont.) Analysis of the model output includes ratios, sensitivity, scenarios and data tables. Optimisation models using Excel s Solver function are also demonstrated and supported by relevant exercises. Alternative forecasting techniques such as time series analysis, regression analysis, probabilities and Monte Carlo simulation are also addressed. Time permitting, other important modelling issues, such as multi-file models, consolidating the files, choosing between alternative loan structures, lease vs. buy decisions and a comprehensive look at various loan issues will be discussed and reinforced by appropriate exercises. What this course covers Extensive investigation and demonstration of Excel functions and techniques essential for successful model building and managing, manipulating and reporting Excel data Introduction to Visual Basic and recording Macros Distilling the key elements of the business case as the building blocks of the model creating the input sheet Building a financial model from first principles taking into account model design, specifications, structure, the required sheets and financial statements The importance of and interaction between income statements, balance sheets, and cash flow statements in financial models Designing and completing support schedules for the income statement and balance sheet Designing and completing the financial statements Calculating model outputs, cash and profits available for dividends and financial ratios Excel techniques useful in the analysis of model output (e.g. sensitivity analysis, scenarios, data tables, etc.) Steps in finalising and protecting the model Creating optimisation models utilising the Solver function Time series forecasting Facilitate modelling uncertainty (e.g. random possibilities, regression analysis and Monte Carlo simulations) Modelling issues such as multi file models, consolidating data, and a comprehensive investigation of various loan issues (time permitting) 2/6

3 DAY 1 Introduction Modelling Overview Financial modelling defined Modelling observations Types of financial models Example of a deterministic model Excel s Modelling Functions Modelling with Excel Changing Excel s default settings Installing the required add-ins Getting the Developer tab on the ribbon Setting up the Quick Access Toolbar Exercise: Inserting tools into the Quick Access Toolbar Tips to improve productivity Choose Exercise: Choose Conditional formats Exercise: Conditional formats Creating your own formats formatting value cells with text Creating views Data validation techniques Date functions Drilling down Expanding Sum formula using =SUM to accumulate data Grouping and outlining collapsing rows and columns Hyperlinks Logical tests IF statements Exercise: Logical tests Demonstration: Logical tests nested Ifs Masks Match, Index and Lookup Max and Min Exercise: Match, Max and Index Naming cells, ranges and formulas Offset function Row(s) and column(s) functions String functions Sumproduct function Exercise: Sumproduct If, Index, Row, Columns, and Masks Trunc, Int, Round & Rounddown Excel s Database and Data Management Functions Searching (filtering a database) Exercise: Filtering and totalling the filtered data Advanced Filtering D-functions Pivot table reports Producing and manipulating a pivot table Exercise: Interpreting volumes of data Sumif, Countif & Averageif Sumifs, Countifs & Averageifs Exercise: Sumif Exercise: Countifs and Sumifs counting and summing between range 3/6

4 DAY 2 Importing text files into Excel Indirect cell addresses Exercise: Indirect addressing Vlookup and Hlookup Exercise: Vlookup and Match Exercise: Using Data Validation and Hlookup Exercise: Importing share prices from the stock exchange Uses of the Ctrl key Financial Modelling Designing the model structure Model development steps in developing a financial model Modelling best practice and cardinal rules Introduction to Modelling Auditing and testing spreadsheets Examples: Spreadsheet errors Essential testing and auditing techniques Exercise: Identifying model design errors Hard coding, formula auditing, using Excel s Goal Seek function Building the ValuMart Trading Model Model Specification Exercise: Creating the Input Sheet Exercise: ValuMart Trading Exercise: Defining support schedules 4/6

5 DAY 3 Loan Functions and Techniques Calculating Loan capital and interest payments Exercise: ValuMart Trading completing the schedules Income Statement Designing the Income Statement Financial ratios Exercise: ValuMart Trading the income statement Cash Flow Statement Designing the cash flow statement Cash flow statement accounting layout Starting your cash flow statement with EBITDA Analysing the Model Results Return ratios Breakeven analysis Exercise: ValuMart Trading ratios and returns Viewing financial ratios graphically Sensitivity analysis Goalseeking Sensitivity Factors Recording a Macro Assigning the macro to a button Exercise: Retail World sensitivity analysis Balance Sheet Designing the balance sheet Balancing the balance sheet min and max Exercise: ValuMart Trading cash flow statement and balance sheet 5/6

6 DAY 4 Creating scenarios Comparing Scenarios Scenario summary Exercise: Retail World creating 3 scenarios Data tables Exercise: Retail World setting up data tables Finalising the model Protecting your model Protecting sheets Protecting workbook structures Hiding formulas Protecting files Optimisation models using solver Exercise: A simple optimisation model Exercise: A routing problem Forecasting model and time series analysis Review of forecasting methods Liner methods Smoothing and seasonality Exercise: Producing a forecast with time series analysis Other modelling issues (time permitting) Multi-file models A sales model with links and overridden data Summing through the sheets Exercise: Summing up through the sheets Consolidating the branch files Consolidating via commands Converting the consolidated results to foreign currency Average growth or inflation rate Effective and nominal rates All about loans (time permitting) Choosing between alternatives Exercise: Choosing between alternatives loans Example: Loan with delayed repayments Calculating the loan limit (based on the DSCR) Variable Loan multiple drawdowns, interest rates and special payments Optional exercise: Lease or buy anticipating change Uses of the Ctrl Keys Basic forecasting Probabilities Monte Carlo Simulation Basics 6/6