Financial Modeling Training Series: Basic Financial Modeling

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Financial Modeling Training Series: Financial Modeling (using DCF-based Business Valuation as the Model) – A Corporate Finance Perspective

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Financial Modeling Training Series: Consistent Cash Flow Valuation

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Financial Modeling Training Series: Building Financial Models using Case Study Approach

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Basic Class : Valuation and Financial Modeling : A Case Study

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Financial Modeling Training Series

 Alternative 1: Building a Basic Corporate Model

Corporate Model is one of the six financial models, which in general, could be classified into six models, they are:

  • Corporate Model
  • Project Finance Model
  • Acquisition Model
  • Merger Integration Model
  • Financial Institution Model
  • Real Estate Model

Because of different data resources and alternative valuation techniques, the financial modeling layout is somewhat different for each of the abovementioned model types.

If you are a beginner in the financial model, and about to build your own financial modeling, than I suggest you are better to begin with this training.

In this training, we will walk you through understanding the general structure and design of a corporate model and building a basic corporate model. The essential element of corporate modelling is presentation of history alongside the forecast, smooth transition from history to forecast and development of alternative structures for the assumptions. Difficult issues in corporate modelling involve depreciation, setting target capital structures, circularity from interest expense and interest income. The exercises begin with a simple case that does not have any history and then demonstrate how to add history to the model.

Understanding a corporate model enable the participant to do its own analysis for valuation and extending credit purposes.

By attending this training, the participants will learn the following lesson sets:

  • Overview of the corporate model issues
  • Building a basic corporate model
  • Cash flow plug with simple minimum cash balance
  • Using cash flow waterfall concepts to model minimum cash
  • Corporate model with depreciation analysis and balance sheet
  • Corporate model with financing and minimum cash balance
  • Working capital and fixed debt
  • Model with history – developing assumptions using historic switch
  • Model with history – working analysis of revenues, expenses and capital expenditures
  • Monthly corporate model structure
  • Creating flexible assumptions with historic switch
  • Monthly corporate model with annual summation
  • Circular reference and target capital structure in a corporate model

Alternative 2: Building a Financial Model using Microsoft Excel – Using 2 Study Cases

One of the corporate management’s tasks is to make a fact-based decision making, and in this respect, financial models play an important part in making this decision making process. Accordingly, as analyst who helps build this financial model for decision making purposes, it is critical to come up with a financial models that are simple and easy to follow and understand for all stakeholders who are involved in the decision-making process, including senior management, to understand.

This class will teach the participants on how to build financial models in Microsoft Excel. It has been designed in such a way that the participants can learn to build financial models with only a little knowledge of accounting and finance.

What differentiates this training class is the approach used in facilitating the financial modeling. The training is organized around case studies, which provide a supporting platform for the participant’s learning.

Things you will bring to your job after attending this training class:

  • Building Cash Flow Available for Debt Service (CFADS) and Cash Waterfall
  • Understanding Debt Service Coverage Ratio and Interest Roll-up
  • Using target debt service and target debt to pay
  • Understanding EBITDA
  • Using Flags in Financial Model
  • Understanding Internal rate of return (IRR and XIRR functions)
  • Modeling investing money in a growth capital
  • Sources and Uses of Funds
  • Investor Exit Assumptions
  • Exit Waterfall
  • Exit IRR and Money multiple

Target participants : Financial analysts for corporate/project finance, M&A, valuation, project financing, and all participants that are keen to increase his/her knowledge in having a good financial model.

Reminder : This is not an Excel class, but a corporate finance class with the emphasis on the building a Financial Model using Microsoft Excel blended with concepts.

Note: Participants should bring the laptop with minimum Microsoft Excel 2007. No slides will be shared, and the participants will each build the model together with the class trainer. —