Best Practice Financial Modelling for Business Cases

£1,300.00 +VAT

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This Best Practice Financial Modelling Course can also be presented face to face in-house or via live in-house webinar.

Best Practice Financial Modelling Course Objectives:

On completion of this highly practical, hands-on training course, attendees will:

  • Be able to build a financial model from a blank sheet
  • Be able to design models which minimise errors
  • Be able to write models which can be maintained and augmented in the future
  • Be able to develop models with advanced techniques such as sensitivity analyses

Best Practice Financial Modelling Course Content:

Modelling Style

  • Introduction
  • Modelling style
  • Systematic Design Method
  • Case study outline
  • Required inputs and outcomes
  • Risk factors
  • Model planning

Review – Examples of poor modelling style

Best Practice Modelling

  • Best financial modelling practice
  • Importance of flexibility in the model
  • Logic flow within the model
  • Separation of inputs, calculations and outputs
  • Use of flags to control timing factors
  • Use of switches to allow option selection
  • Keeping control of versions
  • Use of corkscrews
  • Making the model robust
  • Common mistakes
  • Demonstrations of all of the above

Revenue and Costs

  • Operational revenue
  • Volume drivers
  • Flags to control timings of changes
  • Consistent coding techniques to enable flexibility
  • Fixed and variable cost
  • Real and nominal considerations
  • Dealing with inflation

Exercise – build a simple cash flow model with revenues, fixed and variable costs, flags and switches

Financial Structure

  • Capital structure
  • Debt and equity funding
  • Weighted average cost of capital (WACC)
  • Fixed asset schedule
  • Depreciation calculations
  • Debt amortisation calculations
  • Dealing with circular references

Exercise – add a capital structure to the previous model, with debt and equity injections, interest costs, debt amortisation and constrained dividend payments

Adding Income Statement & Balance Sheet

  • Cash flow schedule
  • Adding a basic income statement (profit and loss account)
  • Basic balance sheet
  • Integrity checks

Exercise – add a simple income statement and balance sheet to the previous model

Returns

  • Accounting returns
  • Adding a terminal value
  • Project ratios – DSCR, LLCR
  • Discounted cash flow measures: NPV, IRR, XNPV, XIRR
  • Comparing projects to assess most attractive choice

Exercise – add accounting returns, project ratios and discounted cash flow measures to the previous model

Sensitivity Analysis

  • Purpose of sensitivity analysis
  • Sensitivity analysis:
    • Goal seek
    • Watch window
    • Data tables
    • Scenario manager

Exercise – add sensitivity analyses to the previous model

Executive Summary and Audit

  • Model checks & robustness
  • Basic audit techniques
  • Executive summary
  • Charts
  • Shortcomings of Excel models

Exercise – add an executive summary and charts to the previous model

Workshop Summary

  • Workshop summary
  • Key points
  • Future planning
  • Workshop actions

Background of the Trainer:

The trainer has over 30 years’ experience in a wide range of roles in finance. He has delivered training courses on behalf of a number of international training companies since 2005.

He trained as a Chartered Accountant at KPMG in South Africa and New Zealand, before moving into industry with Ford Motor Company. He held various positions there in financial analysis, budgeting and forecasting, until he was appointed sales planning manager, responsible for forecasting models, production planning and supply logistics. He joined a multinational private consultancy group in Australia, as their general manager (finance); in this role, he guided the group through a period of major change and financial turnaround.

For the past 17 years, he has worked as a freelance financial modeller, trainer and analyst for a range of blue-chip clients. Assignments have included financial modelling for two major LNG projects in the Middle East, numerous renewable energy projects in both Europe and developing countries, structured financing for a large-scale property development, restructuring and outsourcing projects in the retail gas sector, and PPP transactions in the utilities, health and support services sectors.

Best Practice Financial Modelling Course Summary:

Business Case Modelling will allow users to improve the reliability, quality and construction of their Excel models.  Financial modelling demands a logical consistent approach and this workshop builds a business case model through a series of practical stages.

Upon completion, attendees will have a comprehensive understanding of advanced modelling, as well as how each technique can practically be applied through the use of Excel.

Workshop Structure:

The Best Practice Financial Modelling Course starts with a discussion of modelling techniques and methods.  Each session reviews the next stage of the model in terms of the financial theory, modelling techniques and potential difficulties and delegates build the model in stages.

This is an intensive workshop and delegates will be spending the majority of the time on practical model building tasks. With the help of the Course Director and through a proven step-by-step approach, delegates will leave this intensive two-day workshop with the confidence and ability to apply advanced modelling techniques in Excel effectively.

Workshop Methodology:

This Best Practice Financial Modelling Course will be delivered through a practical and interactive case study and worked examples, demonstrating how and why each technique is used.  Emphasis is placed on the delegates gaining practical, hands-on experience of the design and construction of financial models in Excel. Attendees will also benefit from formal lectures, demonstrations and group discussions.  Comprehensive product notes and example models will be provided for future reference.

Pre-requisite:

Attendees need basic Excel skills to be able to participate fully in the modelling workshops.  For example:

  • Opening and closing Excel files
  • Excel screen menu and standard ribbon menus
  • Moving around a worksheet and between different worksheets in a file
  • Creating files
  • Deleting files and individual sheets
  • Changing column width and row height
  • Entering simple formulas
  • Chart wizard
  • Entering labels
  • Cell references
  • Centering titles and merging cells
  • Simple cell and number formatting
  • Changing font sizes and colours
  • Copying, cutting and pasting cell contents
  • Previewing worksheets
  • Printing documents and ranges

Basic Excel functions and the ability to insert functions:

  • Basic Excel formulas – SUM, SUMIF, MAX, MIN
  • Basic financial functions – NPV, IRR, PMT
  • Logic functions – IF, AND, OR

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29-30 November 2018, 8-9 April 2019, 25-26 November 2019