Building a Financial Model
This course explains how to set up the Excel spreadsheet and complete the initial steps of building a financial model, structuring calculations, and looking into costs and revenues, time periods, cash balances and reporting.
This course will enable you to
- Set up and build a comprehensive financial model
- Calculate costs and revenues
- Decide which time periods you need to use and when and where to use flags
- Create understandable and useful reports
About the course
Every financial model is built on the same foundations: an understanding of its purpose, who it is for, and its scope. This course explains how to set up the Excel spreadsheet and complete the initial steps of building a financial model, structuring calculations, and looking into costs and revenues, time periods, cash balances and reporting.
- Setting up a Financial Model
- Who uses a financial model?
- How should I set up a financial model?
- What are the MS Excel settings for financial model building?
- What should be included in a template?
- How should I incorporate FAST principles?
- Costs and Revenues
- What are the different ingredients required to calculate the operating costs?
- What would the concept diagram look like?
- How do I build a calculation that I can use to model the operating costs?
- What would be different in the revenue calculation?
- How do I build a calculation to quickly model the revenue?
- Time Periods
- Why is the concept of time important in modelling?
- What time periods should I use?
- What do I need to know about flags?
- Which ingredients are required to calculate the forecast period flag?
- Cash Balances
- Why is the cash balance particularly important?
- What is a "balance corkscrew"?
- What should I know about interest?
- How is interest calculated?
- What will the recipient want from the summary report?
- Should I use the same rules for building output sheets?
- How do I construct the output sheet?
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