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-bystep 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 answers

DAY 2

Risk, Scenarios and Forecasting

Macros 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 Model

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

• Excel report manager

Exercise: pivot tables

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

Course summary and close

• 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. Alastair established an independent lessor and consultancy. 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.

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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