Introduction to Financial Modelling

For those new to Financial Modelling, this course will introduce the fundamentals and concepts of building a financial model using Excel. This is a practical course in which you will develop the skills to build your own financial model which can be taken away for future reference.

Prerequisites        

It is assumed that participants have either undertaken a basic Excel Introduction course, or else are able to:

• Navigate confidently in Excel
• Use absolute cell references
• Create and use simple formulas
• Link between workbooks

Software used

Workstations are provided. The course is demonstrated using Microsoft Excel 2007, but students can use Excel 2003 if they prefer.

Learning Objectives

During the course, participants will create their own financial model to take away and use for future reference. You will learn how to design and create a user-friendly model which can then be taken away for future reference.

You will learn to:

1. Select which formulas are appropriate in different situations
2. Use absolute and relative cell referencing for modelling
3. Identify common errors in modelling
4. Use techniques to prevent model errors
5. Document model assumptions
6. Link and change variables
7. Prevent data from being changed by protecting your model
8. Build and use drop-down boxes

This course builds on students' basic knowledge of simple formulas and incorporates these into a financial model.

Course Content

What is Financial Modelling?

• Overview of Financial Modelling
• Major differences between Excel 2007 and 2003
• Tool selection
• Purposes of financial models

Formulas

• Selecting the correct formula
• Adjusting formulas manually
• Working with dates
• Applying absolute and relative cell referencing

Error Prevention

• Modelling techniques to reduce potential for error
• Identifying common errors
• Building a simple error check formula

Building Financial Reports

• Review of Profit and Loss statements and Cashflow forecasts

Assumption Documentation

• Why document assumptions?
• Linking to source referencing

Protecting your Model

• Using worksheet protection to prevent entry
• Restricting data entries using data validations
• Protecting your workbook using “Read Only” and password protection
• Hiding unnecessary information

Scenario Analysis

• Using scenario manager
• Adjusting inputs variables to impact outcomes
• Presenting different scenarios in a table

Presenting the data

• Using charts to display data
• Creating a dynamic chart which changes according to variables
• Summarising model data into a presentation