Modelling Financing Options

by Grant Thornton
access120 days access
cpd hours4 CPD hours
price£75+vat

This course will enable you to:

  • Recognise what capital expenditure is and identify the key components to include in your financial model
  • Understand how capital expenditure and other funding requirements are expected to be financed
  • Incorporate and present funding sources into your financial model appropriately
  • Consider the time value of money and how it can be used to assess options in your financial model

No financial model is complete unless it addresses the issue of capital expenditure and financing, but all too often, this is forgotten.

This course will enable you to incorporate financing issues and their implications into your model. It also provides the tools to help you use financial models to assess investment options, for example, when comparing projects with different investments and levels of certainty on expected returns.

Modelling capital expenditure

  • What is capital expenditure?
  • What is required to calculate the capital expenditure requirement?
  • How is the calculation block for the capital expenditure constructed?
  • What real-life factors might need to be considered?

Financing options

  • What do we mean by financing?
  • Why do businesses seek finance?
  • What is the finance likely to be used for?
  • From what sources might finance be obtained?
  • Where in the model should the funding calculations be placed?
  • How accurately do the cash flows associated with the funding need to be predicted?

Funding from internal or external sources

  • Why and when might funding be sought from internal or external sources?
  • What is "circularity" in a financial model?
  • Which ingredients are required to calculate the funding requirement?
  • How do I build a calculation to show the loan balance?
  • What is the structure of the calculation block loan interest?
  • What is the structure of the calculation block for the loan repayments?

Time value of money

  • What is time value of money?
  • What is the importance of time value of money in relation to different financing options?
  • Which ingredients are required to calculate the discounted cash flow?
  • What is the structure of the calculation block for the discounted cash flow?
  • What other methods are used to compare cash flows?

Grant Thornton is one of the world's leading organisations of independent assurance, tax and advisory firms. They specialise in developing, building and reviewing financial models for clients.

Grant Thornton UK LLP specialise in developing, building and reviewing financial models for clients. Over 38,500 Grant Thornton people, across 120 countries, are focused on making a difference to clients, colleagues and the communities in which they live and work. For more information please visit their website.

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