Introduction

This introductory course is suitable for a two day live training course and an eight hour online webinar style programme. The essence of the course is to provide delegates with an introduction to the basic topics that everyone with an interest in financial model must be aware of.

The course content and practical exercises are centred around Microsoft Excel and a significant number of Excel functions and techniques will be reviewed during the course.

Training methodology

Whether the course is provided as live training or as an online experience, the training methodology is essentially the same:

The trainer will introduce each topic with a discussion and/or practical exercise and the delegates will then be provided with a follow up exercise to complete on their own. The final result will be shared with everyone either by confirmatory discussion during the session or by means of sharing the trainer’s completed Excel file.

All delegates will receive a full set of training notes and Excel files: both delegate and trainer versions. There will also be PowerPoint slides and other support materials that will form an integral part of the course.

Workshop prerequisites

Delegates should have a good working knowledge of Microsoft Excel: you don’t need to be an advance user, just aware of and be confident in the use of basic Excel

Delegates should also be in possession of their laptops loaded with Office365/Excel 2016

You will also need to ensure that Power Query and Power Pivot are fully operational: you will receive a delegates’ pack in advance of the course and full instructions will be given then

Required Outcomes

After completing this workshop the delegate should be able to:

Construct financial statement based models together with other financial models using Excel
Train, Test and demonstrate the models you are given or that you build.
Produce output from a model for use at work and in presentations.

Course Content

PART I: Design and Efficiency

In this first Part we will take a specific look at the design of a financial model, providing insight into the usage of spreadsheet maps, formatting and calculations. This section will provide a hands on focal point for designing of your own financial model using Excel.

Section One

Producing and Publishing Model Output for effective communication and workability

Style, formatting and layout
- Fonts colours, backgrounds and borders
- Pivot Tables
- Using symbols and equations
- Using graphs and figures
Error capturing
Technical issues to be considered
Documentation
File formats and compatibility
Size and memory consideration
Object embedding

Part II: Financial Analysis Models

In Part two we undertake a review of data that organisations provide for us: the data normally comes from the financial reporting process. We then undertake a systematic and interactive review of the data we have gathered. A comprehensive examination of the key components of financial statements and financial management will assist in developing effective models that will be vital as you create a world class financial model using Excel.

Section Two

Systematically analysing financial statements for improved model performance

Financial Statements
Appreciating the structure and content of Income Statements and Balance Sheets
Improving displays by using Power Query and Power Pivot
Financial Ratios
Calculating and interpreting financial ratios
DuPont analysis of Return on Equity
Financial Forecasting
An example of forecasting earnings from components of ROE
Time Value of Money
PV (Present Value) and FV (Future Value) Calculations
from first principles and using PV and FV functions
Rates of Return
Arithmetic, Geometric and Continuous Compounding
Yields on uneven returns
Internal Rates of Return

Section Three

Highlighting key financial management principles underpinning effective model development

Cost of Capital
Cost of Equity
Cost of Debt
Tax impact on Cost of Capital
Calculating the Weighted Average Cost of Capital (WACC) and Hurdle rates
Marginal WACC curve and finding break points
Reviewing Capital Budgeting
Cash flow modelling
Decision modelling, including:
Payback Period
NPV (Net Present Value): NPPV, XNPV
IRR (Internal Rate of Return): IRR, MIRR, XIRR
Sensitivity analysis
Optimum Capital Budget

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Basic Financial Modelling