Introduction
The development of effective and realistic business/financial models is a critical tool in today’s value-driven organisation. As shareholders are increasingly concerned with the value of their investments, organisations are continually driven to ensure the optimum use of resources. Using Excel®, the Business & Financial Modelling process provides an effective tool with which the potential outcomes of various strategic and tactical initiatives can be projected. The ability to answer the question “What are the potential results?” is key and critical.
Here is your opportunity to sharpen your analytical abilities for more profitable decision making. This comprehensive five-day programme takes you through the modelling process from start to finish. It provides practical examples and applications of modelling for both strategic and tactical executives.
Objectives
Understand the significance of proper formulation and interpretation of models
Apply statistical tools such as Exponential Smoothing, Regression, and Seasonality
Translate specific business challenges into logically structured mathematical models
Get the most from your software investment by creating more powerful models in less time
Learn how to use Excel® tools such as Solver, Goal Seeker, Scenario, and Spreadsheet Auditor
Analyze time series data and develop relationships using exponential smoothing and regression analysis techniques
Draw more realistic conclusions from the results of your models
Be able to determine product mix to optimize profits
Simulate the potential return on new capital investments
Project the probability of processes running within budget
Develop models to support product pricing and/or product continuance
Design budget models for departments, divisions, processes, or other entities Day One
Introduction and overview of Financial Modelling
Module 1 – Introduction and overview of Financial Modelling
Define the Terms Model and Financial Model
Learn the 10 steps to create good Financial Models
The 12 steps to Improving traditional Financial Models
Use Flowcharting Techniques to improve your model
Module 2 – Time Value Models
Understand the Time Value of Money
Apply Time Value Concepts to Financial Models
Learn Why the Weighted Average Cost of Capital (WACC) Is Used in Capital Budgeting Models
Use Net Present Value (NPV) and Internal Rate of Return (IRR) Models in Making Capital Expenditure Decisions
Use the built-in functions for NPV, IRR, MIRR
Day Two
Financial Analysis Models
Module 3 – Financial Analysis Models
Use Break-Even Analysis in Financial Models
Use Scenario Analysis in Financial Models
Use Sensitivity Analysis in Financial Models
Compare These Approaches
Incorporate Sensitivity Analysis and Scenario Analysis in Financial Models
Module 4 – Lease v Buy Analysis Models
Learn the Fundamental Concepts of Leasing
Identify the Different Types of Leasing
Learn How to Analyze Leasing an Asset vs. Purchasing the Asset
Use Financial Models to Make Lease vs. Buy Decisions
Day Three
Financial Ratio Analysis Models
Module 5 – Financial Ratio Analysis Models
Identify Major Financial Ratios
Use Financial Ratios to Measure a Firm’s Financial Performance
Use “Peer Group” Analysis to Measure a Firm’s Financial Performance
Use Financial Ratios Models to Analyze a Firm’s Performance
Module 6 – Models for Valuation of Stock and Bonds
Learn How to Apply Dividend Discount Techniques
Calculate the “Intrinsic” Value of a Firm’s Common Stock
Rationalize the Difference between Intrinsic Value vs. Market Value for a Firm’s Common Stock
Learn How to Apply Bond Valuation Techniques
Calculate the Price and Yield to Maturity (YTM) of a Bond
Construct a Model to Evaluate Potential Bond Investments
Day Four
Comprehensive Models and Tools
Module 7 – Comprehensive Models and Tools
Using Tools like Solver & Goal Seeker
Developing a Financial Optimization Model
Identify the Types of Financial Activities That Can Be Connected in a Model
Build the Pieces of a “Connected” Model
Link the Pieces to Form a Multiple-Part Model
Module 8 – Putting It all Together
Understand How Models Are Created and Used
Deal with Problems in the Development and Use of Financial Models
Use Financial Models Effectively
Day Five
Case Studies
Case study - Should we maintain existing equipment or replace it with new? The choice is driven by increased revenues, reduced costs, or improved profits. This case demonstrates how to build a model to clearly make the best decision.
Case study - When is it better to lease assets and when is it better to buy them? This case demonstrates how to build a model to calculate the answer that delivers the lower cost between the two.
Case study – This demonstrates how to calculate the value of stock with the ability to dynamically change inputs to view the resulting outputs.
Case study – You are looking to source a supplier to provide you with a piece of machinery together with ongoing service and support. You receive three quotes, all with different prices and variable ongoing costs. Taking costs and time into consideration which one will you choose?
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