Certificate in Advanced Financial Modeling

Introduction

Organizations cannot afford to make the wrong investment decisions as these decisions have a long-term impact on the business and could make or break the organization. Therefore, it is critical to master financial modeling techniques as they are the main basis for investment decisions. By helping you understand and build effective financial models, this course will have a significant impact on the effectiveness and feasibility of your investment decisions.

Course Objectives

• Prepare effective financial models utilizing powerful Excel functions.
• Use core financial modeling techniques.
• Forecast investments and calculate valuations of projects and companies effectively.
• Develop comprehensive financial models to support investment decisions.
• Recognize special modeling and valuation considerations and best practices.

Course Outlines

Day 1: Advanced Excel for financial modeling

• Excel tips and tricks that will help you speed up your spreadsheet.
• Logical tests.
• Protecting your data.
• Database activities.
• Pivot Tables.
• Grouping data.
• Vertical and horizontal lookup tables.
• The magical choose function.
• Interactive formulas to extract data.
• String functions.
• Data tables.
• Interactive Graphs.

Day 2: Fundamentals of financial modeling

• Time value of money.
• Present Value (PV) Future Value (FV) and Net Present Value (NPV).
• Internal Rate of Return (IRR) and Multiple IRR (MIRR).
• Equity IRR and project IRR.
• Using XNPV and XIRR.
• Contradicting NPV and IRR.
• Amortization of loan schedule.
• Enterprise value, market capitalization, firm value, and equity value.
• Effective interest rate.
• Compound Annual Growth Rate (CAGR).
• Investment assumptions and cash flows.
• What needs to be included?
• Forecasting revenues.
• Forecasting costs and expenses.
• Focusing on the income statement or cash flow?

Day 3: Valuation techniques

• Analyzing historical information and developing a projection basis.
• Using ratio analysis to prepare projected financial statements.
• Debt capacity and credit analysis for the acquisition.
• Sensitivity analysis on cash flows.
• Weighted Average Cost of Capital (WACC).
• Adjusted Present Value (APV).
• Using the Capital Assets Pricing Model (CAPM) to determine the cost of equity.
• Implied risk premium in the current Price Earnings (PE) multiple.
• Gordon model to determine the cost of equity.
• Using PE multiple to determine the cost of equity.
• Accrual accounting valuation.
• Valuation using multiples.
• Transaction multiples.

Day 4: Building real-life models

• How financial models work.
• Modeling income statements.
• Modeling balance sheets.
• Sensitivity analysis.
• Developing an integrated financial model.
• Automotive.
• Hospitality.
• Real estate.
• Education.

Day 5: Special modeling and valuation considerations

• Structured valuations.
• Financial modeling best practices.
• Return on Investment (ROI) and Return on Equity (ROE).
• Investment structures.
• Direct ownership.
• Partnership and joint venture.
• Build, Operate, and Transfer (BOT).