Advance Skill Programme on Financial Modelling
What is Financial Modeling?
In today’s world of extensive data where decisions are highly quantitative based financial modeling has become an indispensable tool. It is the most sought after skill required in the field of investment banking, equity research, project management, commercial banks and mostly all other sectors in the financial services industry. Financial modeling is the art of building a model using excel to depict financial statements and investment analysis. It builds a structure that integrates various statements and schedules to enable decision making. A financial model represents the performance of a business, a project or any other investment.
Financial Modeling edifies you to work with historical information on companies and analyze the company / industry performance on relevant financial parameters. This analysis is then used as an input to build financial models. These models then project the future financial performance of the companies analyzed and hence give us an estimate of the valuation of the companies.
Applications of Financial Modeling in Finance:
- Investment Banking: Financial Modeling is the basic tool of any Investment Banker. It is used to value the company by forecasting its revenues & financials. With the valuation as a foundation the banker can then recommend the buyer or seller on acquisition of funds or investments in funds respectively.
- Equity Research: Financial Modeling aids analysts in investigating an organization’s financial projections, competitor’s projections and other dynamics to determine the risk and estimate the return behind any investment.
- Credit Rating: Financial Modeling enables Credit Analysts to translate historical information such as outstanding debts into growth forecasts. These forecasts then determine the nature and degree of various risks which is then collated to give a rating to a firm.
- Project Finance: Financial Modeling is very useful in assessing the financial viability of a project. It is also the primary tool used to create a funding plan using relevant debt and equity components
- Mergers & Acquisitions: Financial Modeling helps organizations in assessing the value of any company. It hence gives them clarity about any “merge or acquire” decisions by forecasting the revenues, preparing debt schedules and by performing competitors’ analysis.
- Corporate Finance: Financial Modeling is used by companies to assess their own finances and projects. It is hence an input in creating funding plans for corporate projects.
Application of Financial Modeling in non-finance areas:
- Critical Thinking and Analytical Skills: Critical thinking and analytical skills are two of the most important skills required of any manager. These skills are a by-product of your financial modeling training. Preparation of a financial model requires analyzing different options critically. Every model that you create hones these skills further.
- Business Plan Preparation: Another necessary prerequisite for a manager is the preparation of diverse reports such as business plan reports, project reports and revenue/ cost projection reports. Financial Modeling provides you with relevant skills that are helpful to understand business plans for a range of sectors.
- Excel Proficiency: Excel is the staple tool for all quantitative analysis across industries and across departments. In Financial modeling, trains you in Excel right from the start of the course ensuring that you gain reasonable proficiency by the end of the course.
- Decision Making: The daily life of a manager is replete with situations that involve decision making. Financial Modeling helps you in quantifying the situations and hence aid you in decision making by comparing different scenarios.
- Theory to practical: In the past, you may have learnt various topics such as financial statements, accountancy, economics, budgeting and financial management, theoretically. Financial modeling elucidates the practical applications of these theories.
- Lectures 4
- Quizzes 0
- Duration 50 hours
- Skill level All
- Language English
- Students 0
- Assessments Yes