Financial Modeling Course

Course Objectives

After completing the course, students will be able to address the following questions:

1. Read and analyze financial statements
2. Source information for building a comprehensive valuation model
3. Understand the basic techniques of equity valuation
4. Learn useful MS Excel functions and shortcuts referred to in building financial models
5. Capture historical numbers from company filings
6. Identify revenue drivers of any company
7. Build a bottom-up revenue model
8. Understand a top-down revenue model
9. Build a fully integrated three-step financial model
10. Build asset and debt schedules
11. Plug the revolver facility in the cash flow statement to cover any deficit caused by an increase in the working capital
12. Interlink the three financial statements to reconcile numbers and match the balance sheet
13. Perform a Discounted Cash Flow analysis for valuing the theoretical price of any company
14. Perform scenario and sensitivity analyses
15. Perform ratio analyses and understand the different ratios and their interpretation
16. Understand the process for identifying peer set of a company to conduct a relative valuation
17. Understanding valuation using Transaction Comps
18. Performing Football Field Analysis

Modules And Timelines

The program is divided into 3 modules:

1. Financial Accounting and Valuation
2. MS Excel
3. Financial Modeling

OVERVIEW OF ACCOUNTING & VALUATION

1. Overview of the income statement, balance sheet, and cash flow statement
2. Overview of accounting adjustments like working capital changes, deferred revenue, DTA/DTL, etc. and their impact on the three financial statements
3. Importance of equity valuation
4. Techniques of equity valuation – DCF, Trading & Transaction Comparables
5. Sum of the Parts Method (SOTP Analysis)

MS EXCEL

1. Basic layout and shortcuts of MS Excel
2. Basic and Conditional Formatting
3. Basic Charting – Line & Bar charts, pie charts, combo charts etc.
4. Pivot tables
5. More than 30 Basic MS Excel functions like Logical functions, Reference functions, and Finance functions, which aid in building the model
6. Goal seek and revolver

FINANCIAL MODELING

1. Overview of the listed company and the sector used for the case study
2. Data sourcing and creating historical financial statements
3. Building a bottom-up revenue model
4. Overview of the top-down model
5. Building cost buildup
6. Projecting of financial statements
7. Building an asset schedule
8. Building a debt schedule

FINANCIAL MODELING

1. Projecting interest expense and dealing with the circular referencing error
2. Revolver adjustment
3. Interlinkage of debt and asset schedule with projected financial statements
4. Completing the operating model

FINANCIAL MODELING

1. Performing DCF analyses using the FCFF approach
2. Performing Sensitivity analyses (single- and two-variable tables)
3. Performing ratio analyses
4. Valuation using Trading Comparables
5. Valuation using transaction comparables
6. Football Field Analysis