We have great pleasure in presenting First edition “Financial Modelling” written for students of PG courses. The related matters are written in a simple and easily understandable.
This volume is an attempt to provide the students with thorough understanding of Financial Modelling. We have presented the subject matter in a systematic manner with liberal use of charts and diagrams where ever necessary so as to make it interesting and sustain students’ interest.
Contents –
Module – 1 Spreadsheets Foundations for Financial Modelling
Introduction
Principles of Financial Modelling
Structure
Transparency
Consistency
Spreadsheet Environment for Finance Professionals
Cell Referencing (Relative, Absolute, Mixed)
Essential Spreadsheet Functions for Finance
Logical: IF, AND, OR
Lookup: VLOOKUP, HLOOKUP, XLOOKUP
Financial: NPV, IRR, PMT
Statistical: AVERAGE, STDEV
Date and Time Functions for Financial Timelines
Formatting Standards
Error-checking Techniques
Building Assumption Sheets
Calculation Blocks
Model Documentation
Version Control
Review Questions
Fill in the Blank
Multiple Choice Question (MCQs)
Short Answer Questions
Long Answer Questions
Module – 2 Financial Forecasting & Valuation Models
Introduction
Understanding Financial Statements for Modelling
Revenue Forecasting Techniques (Growth-based, Driver-based)
Cost and Margin Modelling
Working Capital Forecasting
Capital Expenditure
Depreciation Schedules
Free Cash Flow (FCF) Computation
Discounted Cash Flow (DCF) Valuation Model
Terminal Value Estimation
Relative Valuation Basics (P/E, EV/EBITDA Models)
Model Validation
Cross-checks
Review Questions
Fill in the Blank
Multiple Choice Question (MCQs)
Short Answer Questions
Long Answer Questions
Module – 3 Decision Models, Scenario & Sensitivity Analysis
Introduction
Scenario Analysis (best, base, worst cases)
Sensitivity Analysis using Data Tables
Goal Seek and Solver for Optimization Problems
Break-even Analysis
Profitability Modelling
Capital Budgeting Models (NPV, IRR, Payback)
Risk-adjusted Decision Modelling
Dashboard Creation for Financial Models
Interpreting Results for Managerial Decision-making
Review Questions
Fill in the Blank
Multiple Choice Question (MCQs)
Short Answer Questions
Long Answer Questions
Practical Exercise
