Book Image

Hands-On Financial Modeling with Microsoft Excel 2019

By : Shmuel Oluwa
Book Image

Hands-On Financial Modeling with Microsoft Excel 2019

By: Shmuel Oluwa

Overview of this book

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.
Table of Contents (15 chapters)
Free Chapter
Section 1: Financial Modeling - Overview
Section 2: The Use of Excel - Features and Functions for Financial Modeling
Section 3: Building an Integrated Financial Model

Balancing the balance sheet

The closing cash balance will be posted to the balance sheet as cash and cash equivalent under current assets. However, it is important to note that the balance could be negative, in which case, it should be reflected as an overdraft under current liabilities. Since you don't know which it is going to be, especially as it may change as a result of subsequent modifications, you need to build your model in such a way that the cash balance is posted to cash and cash equivalents if it is positive and to overdraft if it is negative.

Usually, when you need to model a situation that depends on a logical question (one that results in a true or false answer), the first thing that springs to mind is the IF statement. For example, say the cursor is in cell J35, cash and cash equivalents, and you wish to relate this to the calculated cash balance from the...