Learn how to construct different financial models and analyse their applications and uses:
- Model Design and Structure
- Spreadsheet Best Practice
- Testing and Auditing a Model
- Forecasting
- Sensitivity and Risk
- Simulation
- Optimisation and Targeting
- Management Reporting
On completion of this 3-day training programme delegates will be able to:
- Understand the different types of financial models and when each should be applied
- Construct models that are robust, tested and scalable
- Incorporate elements such as risk, sensitivity, optimisation and forecasting into the model
- Produce management reports, summaries and meaningful charts
Teaching methodology
The programme is taught using formal lectures combined with practical and interactive case studies and exercises to reinforce the concepts covered in each teaching session. Emphasis is placed on delegates gaining practical, hands-on experience of the design and construction of financial models in Excel.
Comprehensive product notes and modelling software will be provided for future reference. The course is very practical with a case study in session four of each day, and other exercises in each of the sessions. The investment model started on day one is added to on days two and three.
Who should attend?
This course has been designed for:
- CFOs
- Financial controllers and managers
- Financial & business analysts
- Risk managers
- Accountants
- Corporate treasury managers
- Middle office staff
- General managers
Course Level
The course begins by concentrating on the advanced use of Excel. These skills will be applied to the construction of financial, valuation and investment models. Delegates will then learn how to incorporate forecasting, optimisation, risk assessment and sensitivity scenarios into these models. The course is taught using a step-by step approach so delegates will be able to construct financial models for a wide range of practical scenarios.
Course Background
When looking at any financial opportunity, the ability to perform accurate and realistic analysis is imperative. In today's ever-changing business environment, the capability to just manipulate spreadsheets is not enough. You have to be able to incorporate all the "what if" scenarios and stress any proposal to its limits. A working financial model can facilitate and improve the reliability and quality of your decision-making.
Modelling techniques are used in many different areas, such as investment appraisal, capital planning, budgeting, valuation, financial analysis and forecasting. Banks and businesses worldwide rely on the information produced by financial models – for many it is the key to success.
Day 1
Overview of Modelling Techniques
Introduction and Overview
- Outline of financial modelling
- Examples of Excel financial models
- Useful Excel features and techniques
Exercise: analysing examples of modelling techniques
Spreadsheet Best Practice
- Model design and structure – key steps
- Financial analysis basics – financial statements
- Cash flow and ratios
- Case outline - introduction
Exercise: defining a model plan
Exercise: Techniques for modelling financial statements
Auditing and Testing
- Auditing and Testing
- Examples of spreadsheet errors
- Essential testing and auditing techniques
- Example: testing financial analysis model with cashflows and ratios
Exercise: debugging and checking a financial model.
Practical – Project Model 1
- Practical project model exercise
Questions and answersDay 2
Risk, Scenarios and ForecastingMacros and Security
- Visual Basic in Excel
- Writing and auditing and macros
- Spreadsheet security
Example: writing and auditing macros
Forecasting Models and Time Series Analysis
- Review of forecasting methods
- Understanding financial ‘drivers’ for analysis, valuation and project models
Example: deriving forecast free cash flow and ratios.
- Linear methods
- Smoothing and seasonality
- Macro forecasting and regression
Example: producing a forecast with time series analysis
Risk Techniques
- Valuation model and cost of capital fundamentals
Example: calculating the cost of capital
- Risk and multiple answers
- Scenario techniques
- Advanced financial functions
Example: producing a valuation and testing the results.
Practical – Project Model 2
- Review of initial answers and identification of potential risks
- Adding risk techniques to the project model in module 4
- Questions and answers
Day 3
Simulation, Optimisation and Reporting
Risk and Simulation
- Elements of a simulation model
- Building blocks in Excel
- Monte Carlo simulation methods
Example: building a simulation model in Excel
Optimisation and Targeting
- Overview of optimisation and targeting
- Goal seek and Solver methods
Example: targeting using the composite valuation mode
Practical – Project Model 3
- Extend the project model to answer management questions and target specific results
- Completing and auditing the project model
Management Reporting
- Requirement to consolidate and summarise data
Exercise: consolidating data from different sources
Practical - Management Reporting and Forecasting
- Analysis of company financial data
Exercise: extend the valuation model to produce a meaningful management summary report with charts
Questions & answers
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Alastair Day
Alastair is a finance professional with extensive experience of business analysis systems, accounting, funding and treasury activities.
As a Director of Technology Group Limited, he was responsible for establishing the treasury function and modelled large transactions for evaluation and lease portfolio acquisition. As an alternative to flotation, the directors subsequently sold the company to a public financial services group.
He has conducted a range of modelling and consulting assignments producing models for financial analysis, valuation, mergers, buyouts, projects and data analysis. In addition, Alastair works as a consultant with Euromoney Training in Europe, Asia, Middle East, Africa and America, designing and delivering courses covering financial modelling from general modelling to specific valuation, leasing and other courses.
Alastair has a degree in German and Economics from London University and an MBA from the Open University Business School. He is an associate lecturer at the Open University Business School and has written a number of books and publications.
Courses run by this instructor
Interested in holding this course in-house? Please fill out your details and a member of our team will be in touch with more information.
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This course has now expired please email us to find out when the course will next be running.