Financial Modeling

Course Overview

The Financial Modeling course will guide you through step-by-step process to develop earnings forecast models. You will use detailed earnings model templates that are at par with those used by global investment banking firms.

You will get exposure to industry best practices in building earning models from scratch through a series of closely guided exercises and model answers. You will learn how to build a detailed model and many practical examples, such as how to de-bug and balance a complex model through a series of simple steps.

Course Objectives

  • Learn how to extract relevant company information from various filings and subscription data sources
  • Gain in-depth knowledge of best-practice modeling principles and techniques
  • Build a defendable forecast for revenue and cost drivers
  • Build comprehensive financial models from scratch
  • Incorporate sensitivity analysis to arrive at a range of earning estimates
  • Gain practical experience in designing solutions to real-world financial modeling challenges

Course Content

1. Analyzing Financial Statements

The different methods of analyzing financial statements include how to use financial ratios effectively to identify possible anomalies in company financial statements.

2. Understanding Financial Modeling Best Practices

The best practices to adopt to minimize the potential for errors when building an earnings model. Key concepts include a discussion on financial model structure and formula complexity.

3. GAAP to Non-GAAP Reconciliation

The common non-recurring items reported by companies, identify such items in company filings, and adjust them to derive the recurrent earnings for the company.

4. Restating the Income Statement

The steps of restating the income statement reported in a company filing to a standardized format that allows for the calculation of EBITDA and recurrent earnings.

5. Identifying Revenue Drivers

Importance of identifying detailed drivers of revenue for operating companies in various industries. This course includes a case study for participants to identify revenue drivers for an assigned company.

6. Assessing Cost Drivers

It is important to identify detailed drivers of the operating costs for operating companies in various industries. The course includes a case study for participants to identify cost drivers for an assigned company.

7. Understanding Operating Leverage

The basics of operating leverage, as well as the methods that could be adopted to understand the cost structure of a company. In addition, participants will learn how the factors driving revenue growth could impact the earnings of the company.

8. Forecasting Revenue and Operating Cost

A simple two-step approach lessens the complexities of forecasting the earnings for a company. In addition, participants will be provided general guidelines on research for the purpose of arriving at defensible forecasts.

9. Forecasting Income Statement and Balance Sheet

How to analyze model and forecast key line items in the income statement and balance sheet, such as working capital, property and equipment, intangible assets, borrowings, and share repurchases.

10. Balancing the Financial Model

The step-by-step process helps to balance any financial model. This 11-step process can also be used to critique and identify errors in a financial model that prevent it being from balanced.

11. Calibrating Estimates with Consensus

The importance of calibrating assures the forecasts with consensus, and source the data for consensus and broker-specific estimates.

12. Using Scenario Analysis

The importance of conducting a scenario analysis established a detailed scenario analysis sheet in and earning model template.

Course Methodology

The training is going to be highly interactive combination of lectures, group discussions, questionnaires, individual reflections, role plays, simulations and videos.

Target Audience

This course is ideal for equity analysts, corporate finance professionals, portfolio managers, business analysts and the ones who aspire to play their roles in capital market.

Duration

2 Days (08:30–14:30) with appropriate breaks for tea/refreshments and lunch.

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