Financial Modeling Foundations
Learning objectives
Describe financial modeling basics.
Review the three financial statements used in financial modeling.
Explain how to create corporate financing models.
Explore the valuation process in financial models.
Apply complex modeling features in Excel to a scenario.
Identify the key components in a buyout model.
Introduction
Financial Modeling Basic
What is financial modeling?
What is Financial Modeling? At its core, financial modeling is really just a business form of wha...
Why is financial modeling important?
Why should you care about financial modeling? In the next few minutes, I'll explain what financia...
Business questions and financial models
Financial modeling lets us evaluate very specific sets of circumstances and make decisions based ...
Data for a model
Effective financial modeling is driven by data, but different types of models require different k...
Sources of data
Identifying the data you need for a financial model is just the first step. You also need to actu...
Gathering data from FRED for Excel
While many financial models may not require special data, some do. In particular, if you're makin...
Getting started with the project
Building a financial model requires getting your hands dirty by actually demonstrating what will ...
Excel tips for financial modeling
Financial modeling is really as much an art as it is a science, but there are some basic tips tha...
Corporate Financial Modeling: Three Statement Financial Model
Foundations of the model
The art of financial modeling, mostly relates to making assumptions about the future performance ...
Linking financial statements
The first step in many financial models is linking the different financial statements together. I...
Three-statement financial model
One of our first tasks in building out a financial model, especially a three-statement financial ...
Setting source parameters
While building out the income statement and the balance sheet portion of the three-statement fina...
Assumptions in financial statements
Building financial models really starts when we begin making assumptions about what's going to ha...
Forecasting in financial statements
Once we've gone through and built out our financial assumptions based on the historical figures, ...
Putting it all together
Once we've made a set of forward-looking assumptions about how we think the firm's revenue, cost ...
Improving model quality
Once you've finished building your three-statement financial model, there are a few things you ca...
Evaluating Corporate Financial Models: Three-Statement Model
Financial modeling strategies
Building out a financial model is not as hard as it seems. Let's take a step back and look at the...
Sensitivity analysis and financial models
If we've built our financial model correctly, when we get done, the whole model should be tied to...
Adding visuals to a financial model
While there a lot of different ways to build financial models, one of the great features that's u...
Investment Models: DCF Model
Financial valuation models
Business valuation is a common task in the investments world, and a financial model is the typica...
Cash flows in the valuation model
One of the tasks that you'll probably run into if you're trying to build a financial model is the...
Terminal value in a valuation model
When valuing a company, a key part of the valuation is not just the cash flows that'll be generat...
Interpreting a DCF model
In addition to financial models built around the three different major financial statements, we'l...