Financial Modelling in a Firm
- how to apply models for financial decision-making
- how the valuation technics could help in financial modelling
- how to create a template in Excel, that will allow building a model that is flexible and intuitive
- how to check that the model is correct
- how to audit the financial model
- how to incorporate scenario analysis in forecasting firm’s future cash flows
- how to present a model using a dashboard, charts, etc
- - consolidation of the foundations and development of specific skills of financial modelling
- - development of a modern system of knowledge and skills that allow to build a financial model of the business depending on task specificity
- - using the skills of collecting, processing, analysing and systematizing information for compiling a financial model
- - understanding the principles of building financial models for companies from different markets
- - use of tools for sensitivity analysis and scenario analysis
- Introduction to financial modellingIntroduction. Aims of financial modelling. Project finance, business valuation, portfolio analysis. Professions to use the financial modelling. Financial modelling as a tool for corporate decision making. To the right and down principle. Copying across principle. Financial modelling standards. FAST standard. SMART guidelines. Excel possibilities. Major rules and principles in modelling in Excel. Future of financial modelling.
- Forecasting. Financing, discount rate and DCFForecasting. Income statement forecast. Cash flow statement forecast. Balance sheet forecast. Sensitivity analysis. Forecast of free cash flows. FCFF. FCFE. Cost of capital. Discounted cash flow model. Scenarios. Sensitivity analysis.
- Building a model. Financial statementsHow financial model works. Functions: rules of usage. Date and time functions. Styles. Conditional formatting. Referencing. Naming. Errors: how to find and how to deal with messages. Circular referencing. What if analysis. Text functions. Interrelation of blocks. Inputs for a financial model. Internal versus external inputs. Corporate, industry and macro data. Financial statements analysis. Income statement. Revenues, costs of goods sold, operating expenses, taxes. Income statement. Extracting and normalizing the historic data. Retained earnings reconciliation. Cash flow statement. Capital expenditures. Fixed assets. Extracting and normalizing the historic data for the cash flow statement. Balance sheet. Working capital. Cash balance. Statements checks.
- Model analysis and auditingThe model development process. Scope and design. Worksheet design. Separate worksheets by type: Foundation, Workings, Presentation and Control Methods of model presentation. Financial ratios and analysis in financial modelling. Industry and task cases. Dashboard, control board. Audit of the model.
- Best practices of financial modelling applicationsComprehensive forecasting. Working capital calculations. VAT payable forecast. Financing requirements. FCFE forecasts based on adjusted net profit. FCFE forecasts based on FCFF adjustment. Multipliers. Excel functions & shortcuts. Use of the VLOOKUP, INDEX, MATCH functions. Data Table for sensitivity analysis. OFFSET function for scenario analysis. TRANSPOSE function. Dashboard and control panel.
- Interim assessment (3 module)0.4 * Выполнение групповых заданий + 0.15 * Домашнее задание + 0.1 * Посещаемость + 0.35 * Финальное задание
- Damodaran, A. (2012). Investment Valuation : Tools and Techniques for Determining the Value of Any Asset (Vol. 3rd ed). Hoboken, New Jersey: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=442924
- Day, A. L. (2012). Mastering Financial Modelling in Microsoft Excel 3rd Edn : A Practitioner’s Guide to Applied Corporate Finance (Vol. Third edition). Harlow: FT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1419889
- Hitchner, J. R., Mard, M. J., & Hyden, S. D. (2013). Valuation for Financial Reporting : Fair Value, Business Combinations, Intangible Assets, Goodwill, and Impairment Analysis. Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1102750
- Ian Beaman, Erwin Waldmann, & Peter Krueger. (2005). The impact of training in financial modelling principles on the incidence of spreadsheet errors. Accounting Education, (2), 199. https://doi.org/10.1080/0963928042000229699
- Koller, T., Goedhart, M., Wessels, D., Copeland, T. E., & McKinsey and Company. (2005). Valuation : Measuring and Managing the Value of Companies (Vol. Completely rev. and updated 4th ed., University ed). Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=139659
- Pereiro, L. E. (2006). The practice of investment valuation in emerging markets: Evidence from Argentina. Journal of Multinational Financial Management, (2), 160. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.eee.mulfin.v16y2006i2p160.183
- Rees, M. (2008). Financial Modelling in Practice : A Concise Guide for Intermediate and Advanced Level. Hoboken, NJ: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=319172