Financial Modelling: Financial Statements & Cash Flow

Learn how to build fully integrated income statements, cash flow and balance sheet statements, with attention paid to inputs such as revenue, operating expenses, interest, tax, working capital requirements, fixed assets and debt & equity financing.

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A one-day course presented in a virtual class

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Download: Course Outline

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, cash vs. non-cash expenses, EBIT vs. EBITDA, interest, tax and net income)
Taxation: Marginal vs. Effective tax rates
Dividends: growth rate vs. pay-out ratio
Movement in PP&E
Modelling operating working capital
Balancing a balance sheet through the cash flow statement
Calculation of interest expense and interest income: opening vs. average balance method
Managing 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 – Integrity and Error Checking

Sense Checking techniques
Checking formulae for column consistency
Stress testing
Case studies: reviewing models containing errors and applying techniques on how to identify and correct them

Session 4 – Cash Flow 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

Course Conclusion and Wrap-Up

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, this 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 and his passion for sharing and communicating knowledge naturally led him towards a career in financial training, and an expert in delivering 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 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
Understand the key forecasting and modelling issues for any business modelling situation, which successful financial modelling courses should always cover

This will be presented by an experienced former accountant and investment banker who has worked in the financial training sector for over 10 years.
This is hands-on training using Excel and is fully immersive for participants in the building of an operating and financial forecast model.
Participants will receive instruction material as well as template and solution Excel models.

The core of this course is the building of fully integrated income statements, balance sheets and cash flow statements, with attention also paid to inputs such as working capital requirements, capex, depreciation and debt capacity.

I found the course (content and trainer) brilliant. The delivery was focused on our practical skills and I found it a great learning experience that I look forward to putting into practice.
Was very easy to understand and easy to follow. Am very pleased with the materials and trainer. Overall, thought the course was excellent and was a great learning experience.
A great tutor who gave real in-depth knowledge with practical uses.
It will certainly help me in my day to day models that I deal with. The shortcuts are very handy and the model checks were something I liked the most.
Learnt about new Excel functions, as well as useful tools for being more efficient in using Excel, as well as improving my knowledge of financial statements and modelling in general.
I’ll be able to use this to perform better analysis and interpret models that we receive in our due diligence work.
I will apply this knowledge in my upcoming jobs which involve review of models and also can use this while I am trying to move to CF.
The trainer was excellent. Enthusiastic and engaging.
Really good course, and a very good trainer.
In-depth instruction on financial modelling. Really good intro to Excel shortcuts and concise instruction on how to build a 3-statement model etc. Will definitely help me with sell-side financial modelling.
One of the best training courses I've been on! The delivery was brilliant, and the content was excellently paced. I really enjoyed this course, and have already advised anyone in the team to enrol. Thank you very much!
Really good course, easy to follow. Very relevant for my team.
The trainer was fantastic. Great content and practice material. He is an absolute expert. Loved this course.
Really helped solve a problem I was facing in scenario analysis of a model.
Great content and a great pace of learning. Will use it going for in M&A and valuation modelling.