Financial Modelling: Financial Statements & Cashflow

This cash flow course is broken down into four sections

Session 1 – Modelling Fundamentals

• Optimal Excel Settings & Shortcuts
• Types of models: matrix vs. tower, threaded vs. grouped assumptions
• Presentation formats including positive vs. negative conventions
• Types of assumptions: growth, relative and absolute

Session 2 – Building an integrated 3-statement forecast

• Income statement presentation (sales, EBIT, interest, tax and net income)
• Taxation: Marginal vs. Effective tax rates
• Dividends: growth rate vs. payout ratio
• Balancing a balance sheet through the cash flow statement
• Calculation of interest expenses and interest income: opening vs. average balance method
• Circularities in Excel: circular switches
• Building Scenarios using CHOOSE, INDEX, OFFSET, MATCH and XLOOKUP
• Building Sensitivity analysis using one and two-sided data tables
• During the day we will build two simple generic integrated 3-statement models and a 3-statement model for a public company using research consensus forecasts

Session 3 – Intergrity and Error Checking

• Sense Checking techniques
• Checking formulae for column consistency
• Stress testing
• Case studies

Session 4 – Cashflow statement presentations

• Different approaches to presenting the cash flow:
• Direct vs. indirect method;
• Unlevered free cashflow and cashflow to equity investors
• Cash flow statements for leveraged businesses: EBITDA, Cash Flow available for Debt Service & Cash Flow available for Debt Repayments
• Building a simple LBO model: Sources and uses, Income statement, Cashflow, exit values and returns
• Incorporating scenario and sensitivity analysis

This cash flow forecasting course will end with a wrap-up and any further notes.

Please note - a longer two-day version of this course is also available as an in-house option.

After graduating from Cambridge University in 1993, our cash flow analysis course trainer worked as an auditor with Arthur Andersen, gaining a comprehensive knowledge of corporate accounting and financial statements. He qualified as a chartered accountant (ACA) and then worked in investment banking in the City of London, initially with HSBC and subsequently at Merrill Lynch. Throughout his time in the city, he was in a front office role, advising companies on several areas including valuation, financing, acquisitions, foreign exchange and derivatives. This breadth of practical experience together with his passion for sharing and communicating knowledge, naturally led him towards a career in financial training, and an expert in delivering cash flow training courses.

He has worked in financial training for the last ten years and delivered training courses on accounting, financial modelling, corporate finance, valuation and capital markets at investment banks, private equity and corporate finance firms throughout the world.

By the end of this cash flow course, participants will be able to:

• Apply optimal settings and shortcuts to improve modelling efficiency
• Build an integrated business and cash flow forecasting model including: 
  • the three main statements
  • secondary detailed areas of analysis
• Successful financial modelling courses should make you understand the key forecasting and modelling issues for any business modelling situation

• This will be presented by an experienced audited investment banker who has worked in the financial training sector for over 10 years, which includes delivering our financial modelling course.This cash flow course will be a hands-on training using Excel and is fully immersive for participants in the building of a sophisticated business and cash flow forecasting model
• Participants will receive instruction material as well as template and solution Excel models
• By the close of the cash flow forecasting course, participants will have built out several integrated financial models.

The core of this cash flow course is the building of fully integrated income statements, cash flow and balance sheet statements, with attention also paid to inputs such as working capital requirements, capex, depreciation and debt capacity. We have created our cash flow training courses to ensure they focus on leveraged businesses as well as debt waterfalls and cash sweeps in detail.