Modeling & Projecting Financial Statements

Weaving Business Forecasts into Spreadsheet-Based Financial Projections

Modeling financial statements is critical to financial planning and analysis, business development, valuation, and credit risk analysis. This two-day seminar helps accounting and finance professionals weave business and financial forecasts into spreadsheet-based projections of financial statements. This course focuses on breaking down models into manageable components and explains how the modeling sequence differs from the sequence in which accounting entries are made. Best practices regarding how to integrate knowledge of business drivers, accounting, Excel, finance, and financial programming to produce “well engineered” models are also covered.

This seminar assumes that you are familiar with the following topics which are covered in the Optimizing Accounting & Finance with Advanced Excel:

• Commonly used Excel shortcuts
• Excel functions: IF, OFFSET, SUMPRODUCT, HLOOKUP, VLOOKUP, INDIRECT, MATCH, INDEX, NPV, XNPV, IRR, XIRR
• Excel Data Tables (different from Pivot tables)
• Excel Styles; Custom Formatting, Data Validation, Data Grouping
• Iterations and circular references
• Knowledge of Excel VBA is NOT required
• Working knowledge of indirect cash flows, leases, taxes, and share-based compensation

Course Agenda

• Overview: Six key business drivers – Size, growth, margins, asset intensity, business risk, and financial risk; Two major parts of a model – enterprise and financial
• Best practices: Building models that reflect how management views a business, and are error free, understandable, and easy to update
• Enterprise activities: Revenues, expenses, and related accruals and deferrals
  • Modeling revenues, receivables, and deferred revenues
  • Modeling expenses, payables, and prepaid costs
  • Modeling multi-period effects: Long-term receivables, deferred revenues, accrued expenses, and deferred expenses (PP&E, intangible assets)
  • Modeling current and deferred taxes
  • Understanding and forecasting enterprise free cash flows
• Financial activities: Financial assets, financial liabilities, and equity
  • Deriving funding needs, modeling liquidity, and leverage
  • Cost of capital and risk; Terminal growth and terminal value