Hands-On Financial Modeling with Microsoft Excel 2019 | Packt (2024)

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  1. Free ChapterSection 1: Financial Modeling - Overview
    • Section 1: Financial Modeling - Overview
  2. Introduction to Financial Modeling and Excel
    • Introduction to Financial Modeling and Excel
    • The main ingredients of a financial model
    • Understanding mathematical models
    • Definitions of financial models
    • Types of financial models
    • Alternative tools for financial modeling
    • Excel – the ideal tool
    • Summary
  3. Steps for Building a Financial Model
    • Steps for Building a Financial Model
    • Discussions with management
    • Building assumptions
    • Building a template for your model
    • Historical financial data
    • Projecting the balance sheet and profit and loss account
    • Additional schedules and projections
    • Cash flow statement
    • Preparing ratio analysis
    • Valuation
    • Summary
  4. Section 2: The Use of Excel - Features and Functions for Financial Modeling
    • Section 2: The Use of Excel - Features and Functions for Financial Modeling
  5. Formulas and Functions - Completing Modeling Tasks with a Single Formula
    • Formulas and Functions - Completing Modeling Tasks with a Single Formula
    • Understanding functions and formulas
    • Working with lookup functions
    • Utility functions
    • Pivot tables and charts
    • Pitfalls to avoid
    • Summary
  6. Applying the Referencing Framework in Excel
    • Applying the Referencing Framework in Excel
    • Introduction to the framework
    • Relative referencing
    • Absolute referencing
    • Mixed referencing
    • Implementing the referencing framework
    • Summary
  7. Section 3: Building an Integrated Financial Model
    • Section 3: Building an Integrated Financial Model
  8. Understanding Project and Building Assumptions
    • Understanding Project and Building Assumptions
    • Understanding the nature and purpose of a project
    • Conducting interviews
    • Building assumptions
    • Summary
  9. Asset and Debt Schedules
    • Asset and Debt Schedules
    • Understanding the BASE and corkscrew concepts
    • Asset schedule
    • Approaches to modeling assets
    • Debt schedule
    • Creating a loan amortization schedule
    • Summary
  10. Cash Flow Statement
    • Cash Flow Statement
    • Introduction to the cash flow statement
    • Items not involving the movement of cash
    • Net change in working capital
    • Balancing the balance sheet
    • Creating a quick cash flow statement
    • Summary
  11. Valuation
    • Valuation
    • Absolute valuation
    • Relative valuation – comparative company analysis
    • Summary
  12. Ratio Analysis
    • Ratio Analysis
    • Understanding the meaning and benefits of ratio analysis
    • Learning about the various kinds of ratios
    • Interpreting ratios
    • Understanding the limitations of ratio analysis
    • Using ratios to find financially stable companies
    • Summary
  13. Model Testing for Reasonableness and Accuracy
    • Model Testing for Reasonableness and Accuracy
    • Incorporating built-in tests and procedures
    • Troubleshooting
    • Understanding sensitivity analysis
    • Using direct and indirect methods
    • Understanding scenario analysis
    • Creating a simple Monte Carlo simulation model
    • Summary
  14. Another Book You May Enjoy
    • Another Book You May Enjoy
    • Leave a review - let other readers know what you think

About thisbook

Financial modeling is a core skill required by anyone who wants to build a career in finance. Hands-On Financial Modeling with Microsoft Excel 2019 explores terminologies of financial modeling with the help of Excel.This book will provides you with an overview of the steps you should follow to build an integrated financial model. You will explore the design principles, functions, and techniques of building models in a practical manner. Starting with the key concepts of Excel, such as formulas and functions, you will learn about referencing frameworks and other advanced components for building financial models. Later chapters will help you understand your financial projects, build assumptions, and analyze historical data to develop data-driven models and functional growth drivers. The book takes an intuitive approach to model testing and covers best practices and practical use cases.By the end of this book, you will have examined the data from various use cases, and have the skills you need to build financial models to extract the information required to make informed business decisions.

Publication date:
July 2019

Publisher
Packt

Pages
292

ISBN
9781789534627

In this section, you will understand the meaning of financial modeling with Excel, including an overview of the broad steps to follow in building an integrated financial model.

This section comprises the following chapters:

  • Chapter 1, Introduction to Financial Modeling and Excel
  • Chapter 2, Steps for Building a Financial Model

Read more

About the Author

  • Shmuel Oluwa

    Shmuel Oluwa is a financial executive and seasoned instructor, of over 25 years, in a number of finance related fields, with a passion for imparting knowledge. He has developed considerable skill in the use of Microsoft Excel and has organised training courses in Business Excel, Financial Modeling with Excel, Forensics and Fraud Detection with Excel, Excel as an Investigative Tool, Accounting for Non-Accountants, Credit Analysis with Excel amongst others. He has given classes in Nigeria, Angola, Kenya and Tanzania but his online community of students covers several continents. Shmuel divides his time between London and Lagos with his pharmacist wife. He is fluent in 3 languages. English, Yoruba and Hebrew.

    Browse publications by this author

Latest Reviews(2 reviews total)

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09 September 2019Trusted Customer

Good, but it could be better if step by step expain.

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30 August 2019chenhau fang

Hands-On Financial Modeling with Microsoft Excel 2019 | Packt (2024)

FAQs

What is the best practice for financial modeling in Excel answer? ›

Best Practices for Financial Modeling in Excel

Consistency in structure and formulas. Error checking and auditing for data accuracy. Version control to track changes in collaborative projects. Sensitivity analysis to assess model responses to varying inputs.

Can you use Excel for financial modeling? ›

Financial Modeling is a tool to understand and perform analysis on an underlying business to guide decision-making, most often built in Excel.

Is Excel good for financial analysis? ›

Microsoft Excel is a powerful tool that is essential for finance professionals. It allows users to organize and analyze financial data, create complex financial models, and present financial information clearly and concisely.

How do I create a financial model in Excel from scratch? ›

How to build a financial model in Excel in 5 steps
  1. Input historical data. Most financial models require historical financial data to function. ...
  2. Calculate ratios and metrics. ...
  3. Include financial assumptions. ...
  4. Build a forecast. ...
  5. Determine valuation.
Jun 24, 2022

How long does it take to learn financial modeling on Excel? ›

The time it takes to learn financial modelling varies based on individual factors. Prior knowledge, learning resources, practice, and the complexity of the models all matter. While some might grasp the basics in a matter of weeks, mastering financial modelling can take several months to a year or more.

How to learn financial modeling from scratch? ›

Below are the commonly followed steps to build a financial model:
  1. Past Financial Data and Assumptions: ...
  2. Start With the Income Statement: ...
  3. The Balance Sheet: ...
  4. Develop the Supporting Schedules: ...
  5. Complete the Balance Sheet and Income Statement: ...
  6. Cash Flow Statement: ...
  7. DCF Analysis: ...
  8. Sensitivity Analysis and Scenario:
Apr 7, 2024

What is the best tool for financial modelling? ›

Best Financial Modelling Software
  • Jirav. ...
  • Quantrix. ...
  • Cube. ...
  • Oracle BI. ...
  • Synario. ...
  • IBM Cognos. ...
  • Mosaic. ...
  • Hyperion. Hyperion is a cloud-based Modelling Software that helps businesses and organisations create and manage Financial Models, plans, budgets, and reports.
Mar 21, 2024

How is MS Excel used as a tool in financial modelling? ›

MS Excel is an unparalleled tool for financial modelling; it helps make projections, analyse and predict financial data, and make outcome evaluations of financial decisions. Apart from being an excellent financial modelling tool, MS Excel is also a handy analysis and financial planning tool.

Is Excel enough for accounting? ›

Excel is an excellent accounting tool for a self-employed individual or a very small business with only basic accounting requirements because it is simple to use yet infinitely malleable.

Why does finance still use Excel? ›

Excel spreadsheets gained early traction in the banking industry because they're easy to use, easy to learn, and give non-computer experts the power to perform complex data analysis at scale.

Where can I get data for financial modeling? ›

Financial Statements

This data comes straight from the companies themselves, so it's usually very reliable. The three financial statements that you're likely to use in financial modeling are: If you're working on a public company model, the public company's 10-K and 10-Q filings are your data sources.

What is the difference between financial model and Excel? ›

Cost. In most cases, a software-based financial model will be cheaper to set up and amend than an Excel-based model, unless using a simple template. The reason for this is that the software can interrogate your data much more easily and has a pre-set directory of calculations and assumption types.

What are the 3 financial statements Excel model? ›

What is a 3-Statement Model? In financial modeling, the “3 statements” refer to the Income Statement, Balance Sheet, and Cash Flow Statement. Collectively, these show you a company's revenue, expenses, cash, debt, equity, and cash flow over time, and you can use them to determine why these items have changed.

Which choice is a best practice in financial modeling? ›

Financial modeling best practices
  • #1 Clearly define objectives and assumptions.
  • #2 Keep it simple and transparent.
  • #3 Use consistent and error-free formulas.
  • #4 Implement sensitivity analysis.
  • #5 Include error checks and validation.
  • #6 Document assumptions, methodologies, and outputs.
  • #7 Regularly review and update.
Mar 14, 2024

What is the best practice in financial modeling to distinguish between input and formula output cells? ›

One of the simplest and most basic Financial Modeling Best Practices and formatting strategies is to utilize consistent and recognizable colour schemes to signify different sorts of cells and data. As an example: Blue = It indicates inputs or any hard-coded data, such as historical values, assumptions, and drivers.

How do you do best practices in Excel? ›

21 Expert Excel best practices & tips
  1. Think about the order of worksheets. Put different kinds of data on different worksheets. ...
  2. Keep your timeline consistent. ...
  3. Label columns and rows. ...
  4. Avoid repetitive formulas. ...
  5. Avoid hiding data. ...
  6. Keep styling consistent. ...
  7. Use positive numbers.

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