Duration: 5 days
Rollout format: Online/Virtual
Basic analytical Background
What is a financial model?
A financial model is simply a tool that’s built in spreadsheet software such as MS Excel to forecast a business’ financial performance into the future. The forecast is typically based on the company’s historical performance, assumptions about the future, and requires preparing an income statement, balance sheet, cash flow statement, and supporting schedules (known as a 3 statement model). From there, more advanced types of models can be built such as discounted cash flow analysis (DCF model), leveraged-buyout (LBO), mergers and acquisitions (M&A), and sensitivity analysis. Below is an example of financial modeling in Excel.
Learn how to build dashboards that aggregate time series and financial statement information into intuitive, useful and actionable insights. Predict future values based on financial forecasting models to do scenario planning.
What is a financial model used for?
The output of a financial model is used for decision making and performing financial analysis, whether inside or outside of the company. Inside a company, executives will use financial models to make decisions about:
- Raising capital (debt and/or equity)
- Making acquisitions (businesses and/or assets)
- Growing the business organically (e.g., opening new stores, entering new markets, etc.)
- Selling or divesting assets and business units
- Budgeting and forecasting (planning for the years ahead)
- Capital allocation (priority of which projects to invest in)
- Valuing a business
- Financial statement analysis/ratio analysis
- Management accounting
N:B This qualification has been designed to provide the student with a national certificate and multiple certifications, both locally and internationally recognized by industry for maximum employability.