The workshop will cover the following:
Best Practices In financial Modeling
- Structure your model using separate tabs for inputs, calculations, and outputs
- Build the foundations of your model by determining the objectives, the flow of information, and by defining outputs, inputs and variables
- Validate and avoid misinterpretation through documentation
- Looks matter! Learn cell formatting techniques to lighten up your model: naming cells, color coding, and conditional formatting
- Make your model more user friendly through consistency, clarity, and simplicity
- Secure your model and make it easier to navigate its content by hiding and un-hiding tabs
- Build in functionality in your model through advanced formulas: LOOKUP functions, project evaluation formulas, and useful functions
- Use powerful Excel tools to make your model easier to create: PivotTables, arrays and buttons, Drop Down boxes, Goal Seek and Scenario Analysis
Valuation Techniques
- Time value of money
- Absolute and relative valuation techniques
- Enterprise and equity value
- Weighted Average Cost of Capital
- Discount Cash Flow model
- Terminal cash flows, growth and terminal values
- Financing options and debt instruments
Building your Model
- Set up the financial statements, starting with the income statement, followed by the balance sheet and the cash flow statement
- Forecast the income statement based on cost drivers, revenue drivers, assets, CAPEX and depreciation forecasts
- Forecast the balance sheet based on drivers for balance sheet items, the working capital, assets, loans, cash, and retained earnings
- Forecast the cash flow statement by forecasting the cash flow from operating activities, the cash flow from investing activities, and the cash flow from financing activities.
