Modeling & Projecting Financial Statements
Financial statements can deliver a ton of insights, if you know how to uncover them.
This two-day workshop helps professionals in valuation, corporate finance, planning and budgeting, investment banking, asset management, fixed income research, and equity research weave business and financial forecasts into spreadsheet-based projections of financial statements. These projections help professionals value a business, test future scenarios, and gain an integrated view of a business.
The workshop will also discuss tools and techniques to make participants more efficient and effective in developing models and analyzing information.
You MUST BRING A LAPTOP with Excel 2010 or above to the session to build models.
The following Excel topics will be covered in the "Optimizing Accounting & Finance with Advanced Excel" seminar. Please consider taking the one-day Excel seminar that precedes this course. Modeling & Projecting Financial Statements assumes that you have mastery of Excel skills covered in that course, which include:
- 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.
A good knowledge of accounting topics such as indirect cash flows, leases, taxes, and options
- Introduction to modeling and design: Components of a financial statement model; Skills needed for modeling; Excel overview; Design choices
- Efficient modeling and best practices
Building blocks of models and step-wise development: Enterprise activities
- Forecasting EBITDA by forecasting sales and operating expenses
- Forecasting working capital requirements for future business activity
- Forecasting capital expenditures, PP&E, and depreciation
- Non-current operating assets and liabilities: Modeling multi-period effects: When revenues are collected over multiple periods, or expenses are incurred over multiple periods
- Forecasting reserves and allowances
- Modeling current and deferred taxes
Building blocks: Financing activities
- Understanding and forecasting enterprise free cash flows: Contrasting three approaches to measurement of free cash flows: cash-flow budgeting, equity valuation, and credit risk analysis
- Forecasting funding needs and interest expense
- Ensuring that the firm meets its debt-to-equity ratio constraints or debt-to-EBITDA constraints
- Meeting seasonal funding needs via revolving line of credit
Overview of integrated models and their drivers
- Cost of capital and risk
- Growth and terminal values