Course Content
Session 1 - Concepts, Methodology and Requirements
Objective: This opening session introduces the concepts and methodologies used in financial modelling and financial functions form the core to a large part of financial modelling.
- Model functions
- Naming cells
- Dates and timing conventions
- Logical functions
- Short cut keys
- Graphs
- Financial Functions:
- Time value of money
- Using advanced formulae and the fx functions
- Practical statistical tools
Session 2 - Income Statement: Revenue
Objective: This section introduces the design and modelling of the income statement. Assumptions form a crucial part in the development of models, together with the multi-variable scenario analysis.
- Revenue analysis
- Projecting data:
- ‘Detailed’ versus ‘top level’ analysis
- How to build growth into the model
- Compound annual growth rate (CAGR)
- External factors and revenue drivers
- Multi variable Scenario analysis
Session 3 - Balance Sheet: Assets and Liabilities
Objective: Participants will develop the asset side of the balance sheet with a focus on capital expenditure models and debtor and inventory management. The liability side will include complex debt amortisation and taxation with deferred taxation computations
- Capital structure
- Non-current assets and deprecation tools and techniques
- Capital expenditure models
- Current assets
- Debt and amortization tables
- Current liabilities
Session 4 - Cash Flow Statement
Objective: Participants will develop the cash flow statement and cash flow forecasts from the link between the balance sheet and income statement.
- Link between balance sheet and income statement
- Working capital projections
- Cash flow forecasts
- Analysis models and their uses in treasury management
Session 5 - Integration of Ratio Analysis
Objective: Ratios provide a measure of checking and verifying the numbers projected in the income statement and balance sheet
- Profitability, liquidity, efficiency and gearing ratios
- Du Pont analysis
- The importance of ROI
- Market related ratios and benchmarking
- Testing the model results
Session 6 - Investment Appraisal Models
Objective: Participants will now apply the tools learnt earlier in the investment and project appraisal
- Payback and discounted payback
- Accounting rate of return
- Net present value
- Profitability Index
- Internal rate of return
Session 7 - Advanced Techniques
Objective: Advanced techniques focus on the application of useful excel tools used to identify and control key sensitivities through spreadsheet simulation
- Data base techniques
- Goal seek
- Optimization
- Scenario analysis
- Audit requirements in financial modelling
- Identifying and controlling key sensitivities through spreadsheet simulation
- Building risk factors in models to enhance decision making
Session 8 - Sensitivity Analysis
Objective: In this session participants will develop an understanding of the concepts of sensitivity in project finance models. This will help assessing accuracy of the model as well as worse case and best case scenarios
- Purpose of sensitivity analysis
- Establishing a suite of sensitivities
- Combined downside 'worst' case
- Minimising run-time errors
- Identifying sensitivity printout
- Automating sensitivity runs using an input table
- Cross checking against base case
Session 9 – Summary and close
