FINANCIAL MODELLING FUNDAMENTALS

Transcription

1 FINANCIAL MODELLING FUNDAMENTALS 3-DAY WORKSHOP COURSE OVERVIEW This 3-day entry level course is designed to introduce aspiring modellers to best practice modelling methods and processes using MS Excel as the model building tool. The key to successful modelling lies in the application of correct modelling procedures, model design and structure. These core principles are explained and demonstrated using a combination of detailed course notes and Excel files. Delegates work through various practical exercises under the supervision, and with the help, of the instructor to get to grips with practical modelling techniques. All Excel functionality necessary and essential to model building is comprehensively explained and supported by appropriate Excel examples and exercises. This is a hands-on, non-intimidating course is a must for those persons required to build financial models or wishing to add this highly valuable capability to their skills base. WHO SHOULD ATTEND Aspiring modellers and persons who may be required to build financial models Financial officers, budget officers, middle and senior management Consultants and corporate financial advisors who need to construct financial models Sales and Commercial Managers involved in complex decision making All persons involved in the construction and use of financial models, including budgets, projections, evaluations, cash flows, projects, etc. PRE REQUISITE(S) A basic knowledge of Income Statements, Balance sheets and Cash Flow statements Delegates should be familiar with Microsoft Excel (though not necessarily expert in the use thereof, as any relevant Excel function pertinent to an exercise will be discussed prior to tackling the exercise).

2 COURSE OUTCOMES By the end of this 3-day course delegates will know how to structure models correctly, and will appreciate the necessity for so doing. The following processes and topics are covered in detail: 1. The process of building a financial model from first principles, understanding the importance of model specifications, structure and setting up the required sheets and financial statements. 2. The interaction between Income Statement, Balance Sheet, and the Cash Flow statement in financial models, and the necessity for utilising this approach. 3. Excel techniques and functions essential to the construction of financial models and the analysis of the results. e.g. sensitivity analysis, creation of scenarios and data tables, etc. 4. Introduction to recording macros 5. Comprehensive financial ratios and how these ratios are used to measure corporate performance. 6. Other important and relevant modelling issues:- a. multi file models, b. effective and nominal rates c. inflating values annually and monthly d. evaluating lease or buy options 7. Using the Choose function to set up switches in models, allowing users to investigate the effect of different funding alternatives (loan structures) on cash flows and balance sheets. 8. Multi file models, consolidating data from different sources COURSE OUTLINE Introduction Modelling Overview What s it all about Financial modelling defined Some Modelling Observations Types of financial models Example of a deterministic model Excel s Modelling Functionality Modelling with Excel Changing Excel s default settings Installing the required Add-ins Getting the Developer tab on the ribbon Setting up the Quick Access Toolbar Inserting some tools into the Quick Access Toolbar Exercise Useful tips to improve productivity Naming cells, ranges & formulas Creating your own formats Conditional Formatting

3 Data Validation Drilling down Hyperlinks Logical tests - IF Exercise - Logical tests Demonstration - Nested Ifs Date Functions Grouping and Outlining Introduction to Modelling Improving the design of an existing model - Exercise Modelling Process development steps Designing the Model Structure Modelling Best Practice and Cardinal rules Building the Tollroad Model Specification for the 20-year project model Toll road project exercise 1 Creating the input sheet Toll road project - exercise 2 Toll road project - exercise 3 Defining Support Schedules Using =SUM to accumulate data Trunc & Int Using masks Using the Offset function Toll road project exercise 4 Income statement schedules Calculating Loan capital and Interest payments Toll road project exercise 5 Comparing results and calculating the loans Designing the Income Statement Contribution Toll road project exercise 6 Preparing an Income Statement Designing the Cash Flow Statement Cash Flow Statement - Accounting Layout Designing the Balance Sheet Balancing the Balance Sheet Toll road project exercise 7 Preparing a Cash flow Statement and Balance Sheet Discounted cash flow Discounted cash flow over unequal periods Free Cash Flow Analysing the Model Results Measuring project return on investment

4 Break-even point of the Toll road Project Match Index Toll road project exercise 8 Calculating returns and break-even points Creating Scenarios Comparing Scenarios Scenario summary Toll road project exercise 9 - Creating 3 scenarios Sensitivity analysis Introduction to recording macros Assigning Macros to Buttons Exercise - Testing the sensitivity in a model Toll road project exercise 10 Creating a Sensitivity table Data tables Toll road project exercise 11 Setting up a 2-input data table Financial Ratios Return Ratios The Debt Service Cover ratio Break even analysis Viewing financial ratios graphically Exercise - Viewing ratios graphically Creating an Executive Summary - Exercise Protecting your model Hiding formulas Protecting files Other Modelling Issues Multi-file models A Sales model with links and overridden data Summing through the sheets Exercise - Summing up through the sheets Consolidating the branch files Consolidating via commands Average growth or inflation rate Effective and Nominal rates All about Loans Choosing between alternatives Choosing between alternative loans -Exercise Example of a loan with delayed repayments Calculating the loan limit (based on the DSCR) Variable Loan - Multiple Drawdowns, Interest rates and special payments Optional exercise - Lease or Buy Anticipating change Uses of the Ctrl key

5 BRINGING IT IN-HOUSE Do you have a group of 8 or more interested delegates within your organisation? We can exclusively conduct In-house training at the location of your choice and at your convenience. Please training@patontraining.com ABOUT PATON TRAINING Paton Training provides performance improvement courses that can be customised to match exact client specifications. Using deep technical insight and drawing on an innate understanding of our clients goals, culture and priorities, Paton Training is able to provide innovative and relevant training solutions. OUR COURSES INCLUDE A range of Investment and Corporate Banking tools, Treasury and Risk Product application, Financial and Accounting skills, Financial Modelling skills, Selling and Marketing Skills, Behavioural Skills Training. Paton Training is a division of Paton Personnel (Pty) Ltd.

6 PATON TRAINING REGISTRATION FORM Financial Modeling Fundamentals June 2017 R 11,550 (excl VAT) 4 TH FLOOR NORTH BLOCK, HYDE PARK CORNER, JAN SMUTS AVE, JHB, 2196 Delegate Name: Job Title: Company: Postal Address: Postal Code: Physical Address: Your Purchase Order No: Your Vat Number: TRAINING CONFIRMATION FORM Please complete the following details and fax/ to Paton Training: Fax: or training@patontraining.com Contact Name (payment queries): Contact Tel and Delegate Cellphone Number: Number of Attendees: Note: Upon confirmation of number of attendees, we cannot accept cancellations, however substitutes are welcome. TERMS OF BUSINESS - Payment Terms: The invoice is to be paid in full 2 weeks prior to course commencement. If payment has not been received, training cannot commence. - Postponements: 50% of the invoiced amount will be invoiced regardless of the notification period. This amount will be held for a period of 3 months in order to cover postponement costs. In the event that the course commences within a 3 month period thereafter, this amount will be applied to set-off part of such course cost. - Cancellations: Written cancellation must be received no later than 15 days prior to course commencement date. A 50% cancellation fee will be charged. If this written notification is not received timeously, you will be liable for the full amount. - Delegate attendance: We cannot be held responsible for lack of delegate attendance. You will be responsible for the full payment if delegates do not attend the stipulated training. ACCEPTANCE I Position and Company, Being duly authorised, hereby approve the terms and conditions above Signature Date