Business Case Modelling

£1,300.00 +VAT

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Business Case Modelling Course Overview:

This Business Case Modelling course 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.

This Business Case Modelling Course can also be presented in-house via live webinar.

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

Workshop Structure:

The Business Case 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 Business Case 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

Business Case 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

 

What Redcliffe’s clients are saying about the training course;

“Easy to follow, well structured, perfect handouts & files”

“Explanation very simple and easy to understand”

“The “structure”, the excel templates and the teacher were very good”
 
“Very interactive with challenging exercises and an excellent teacher”

“The examples used in excel were very useful and helped me to understand in a logical manner”

 

Training Course

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29-30 November 2018, 17-18 May 2018