2-DAY PUBLIC SESSION | 3-DAY VIRTUAL SESSION
Financial Modeling Boot Camp
Program Outline
This is an An Interactive Workshop - Bring a Laptop
In this interactive workshop, you will be supplied an instructor-developed modeling template. From the first brick to a total enterprise model, you'll develop a strong grasp of model building that is difficult to obtain from a book! Explore structure, algorithms, data tables, graphs and other critical components — hands-on, in class! You'll understand the interaction of model components and you'll have the ability to confidently perform analytical work using your model. What's more, you'll take this skill back to the office to share with your co-workers and staff.
I. Course Overview and Introductions
In this important course introduction, we’ll discuss why financial modeling is important, the strategies you need to incorporate to create a solid financial model, how you need to “think” and what tools you will need to construct a complete working model.
A. Instructor/Student Introductions
1. Determining skill levels
2. Student’s goals
3. Course goals and direction
B. What is and why Financial Modeling
1. Linked/Integrated Financial Statements
2. Historical/Future Projections
3. Operating and Financial Assumptions
C. The Art and Science of Accurate Financial Modeling
1. Model like an Analyst, think like a Managing Director
2. Financial Market Awareness
3. Clients Needs
4. Strategic Analysis
5. “Outside the box” Due Diligence
6. Original/Thoughtful Research
D. Relevant Financial Websites and Support Groups
1. Yahoo Finance
2. SmartMoney Marketmap
3. Google Alerts
4. Relevant Industry Websites
5. Bookmark File
II. A Thorough Review of Accounting Principles Implied in Financial Modeling
A financial model is an interactive representation of financial statements, interwoven into a seamless, interactive valuation tool, providing you an automated method for calculating accurate assumptions. In this segment, we’ll review all of the key financial concepts and accounting principles that you need to understand, what each represents and how each piece interacts and affects your modeling techniques and valuations.
A. Balance Sheet Components
B. Income Statement Components Review
C. Statement of Cash Flows
D. Ratio Calculation and Analysis
E. EBITDA vs. Earnings vs. Cash Flow
F. Market Capitalization vs. Book Value
G. Key SEC Filings and Source Documents
H. Importance of Footnotes
III. Excel Functions/Skills and Financial Modeling
In this hands-on section, working with the instructor, you’ll cover key Excel functions, understanding what modeling tools are available in Excel, short cuts you can use, customizations that you’ll want to make. You’ll end by knowing the capabilities of Excel and how to navigate and work comfortably.
A. Color Coding – Making Spreadsheets Understandable
B. Using Cumulative Checks and SUM Bars to Avoid Errors
C. Yes/No Triggers for Alternate Transaction Scenarios
D. Working with Circular References
E. Catching Errors in Formulas
F. Using MIN and MAX for Optional Debt Repayment Formulas
G. Using Custom Number Formats
H. Formatting Numeric Values as Text
I. Mixing Links and Text via ‘&’ Function
J. Converting Numeric Values using the TEXT Function
K. Tracking Precedents/Dependents in Native Excel
L. Jumping to Newly Defining Names
M. Creating Data Tables to Automate Repetitive Calculations
N. Using OFFSET to Run Scenario Analyses
IV. Building the Financial Model
It’s time to incorporate your skills and financial knowledge. In this segment, you’ll create in class a working model. With the instructor, you’ll incorporate your financial statements, find the “bugs”, problem solve, enhance your model, use polishing techniques and ultimately create a presentable and reliable model.
A. Setting up and Building the Integrated Financial Model from Scratch
1. Linking of Income Statement, Balance Sheet, Statement of Cash Flows
B. Establishing the flow of a Financial Model
1. Historical & Projected Operating Assumptions
a. Computing Revenue Growth
b. Calculating Cost of Goods Sold
c. Depreciation of Capital Expenditures
d. Amortization of Intangibles and Financial Costs
e. Capital Expenditures of Long Term Assets
2. Analysis of Working Capital Assumptions
a. Accounts Receivable % of sales, As A Measure of Collection Prowess
b. Days Receivable, And Its Relation to Sales Growth
c. Inventory % of COGS, Measuring Inventory Obsolescence
d. Inventory Turns, Measuring Management Efficiency
e. Calculating Prepaid Expenses % of COGS
f. Accounts Payable % of COGS, and Its Relation to Financial Float
g. Calculating Accrued Expenses % of COGS
3. Latest Balance Sheet
4. Income Statement (Historical and Projected without Average Interest)
5. Forecasting the Balance Sheet – Up to Debt & Cash
6. Creating a Cash Flow Statement
7. Understanding and Creating A Debt Schedule – Sources and Uses of Funds
8. Completed Forecast, Balance Sheet, Income Statement, Cash Flow Statement
C. Valuation
1. Discounted Cash Flow (DCF) Valuation Using Excel’s Table Function to Calculate Valuation Ranges
2. Using Comparable Company Analysis as a Method of Relative Evaluation
3. Using Precedent Transactions as a Basis for Takeover Values
4. Calculating Enterprise Value For Valuing Firms According to the Indirect Method
5. Computing Free Cash Flow for Use in Enterprise Valuation
6. Using the Capital Asset Pricing Model to Estimate Equity Discount Rates
7. Calculating Weighted Average Cost of Capital To Properly Estimate Enterprise Value Discount Rates
8. Using Implied Multiple Analysis To Develop Valuation Intuition
D. Advanced Modeling/Valuation Techniques
1. Using Scenario Analysis To Model Best, Worst and Standard Business Cases
2. Using Operating Buildup to Create Detailed Revenue and Expense Projections
3. Average Interest – the only valid circular reference in a Financial Model
4. Sensitivity Analysis to Determine Model Robustness
E. Checks and Balances to Eliminate Errors and “Rookie” Mistakes
F. Creating a Summary/Creating Cover Page
G. Recap of Websites and Support Groups
Engaging Case Studies and Group Exercises
Not only intense, this class can also be fun. You’ll enjoy working with other members of the group on in-class exercises and participate in discussions of some interesting case studies. You will enhance your working knowledge of modeling by enjoying instructor-lead group exercises and discussions of “real-world” examples and business situations that help enforce what you’re covering and cement your understanding of the various course topics.
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