The Fundamentals of Financial Modelling
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A comprehensive course on the fundamentals of financial modelling
This one-day workshop is designed to introduce participants to Microsoft Excel and basic financial modelling techniques. During the workshop, we will review various Excel tools and functions, as well as basic modelling techniques. We will also complete the missing steps of a financial statements forecast model.
Who should attend?
This workshop is designed for all finance and non-finance professionals who are new to Microsoft Excel and financial modelling. No previous knowledge of finance or Excel is required.
By the end of the course, the participants will be able to:
- Understand and use a variety of Excel functions and tools
- Understand the approach for planning a financial model
- Apply modelling best practices in their own financial models
- Create a financial statements forecast model
- Use scenario analysis
- Test and audit models
The use of computers with Microsoft Excel installed (or similar software) is essential for this course, as all the case studies will be done on Excel.
This course attracts 7 CPD points.
Session 1: Introduction to Excel
- Excel’s interface
- Basic operations
Activity: Participants will be required to apply proper referencing techniques to complete some calculations in Excel and also format the data appropriately.
Session 2: Data validation
- Purpose of data validation
- Data validation settings
Activity: Participants will be required to apply appropriate data validation on a loan application template.
Session 3: Excel functions
- Commonly used Excel functions
Activity: Participants will complete a number of exercises related to some commonly used Excel functions.
Session 4: Modelling best practices
- Structure design for optimal use
- Formatting standards
- Using name ranges
- Circularity and using switches
- Hard coding
Session 5: Model design and structure
- Uses of financial modelling
- How the purpose will affect the design
- Planning the model
- Structure of the model
Session 6: Creating a financial statements forecast model
- Planning and structure of the model
- Finding and using historical financial information
- Applying best practices
- Creating the three main financial statements
- Balancing the model
- Calculating debt and interest
- Use of circularity switches
- Adding an analysis to the model
Activity: Participants will be required to complete the missing steps of a financial statements forecast model.
Session 7: Scenario analysis
- Purpose of scenario analysis
- Options for comparing scenarios
- Using Excel’s scenario manager
- Using Excel’s Data Tables
- Using the Watch Window (Note: not available in the Mac version)
Activity: Participants will use the various techniques discussed to add scenario analysis to the forecast model.
Session 8: Testing and auditing models
- Testing for accuracy
- Trend checks
- Formula auditing