#### 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.
Preface
Free Chapter
Section 1: Financial Modeling - Overview
Introduction to Financial Modeling and Excel
Steps for Building a Financial Model
Section 2: The Use of Excel - Features and Functions for Financial Modeling
Formulas and Functions - Completing Modeling Tasks with a Single Formula
Applying the Referencing Framework in Excel
Section 3: Building an Integrated Financial Model
Understanding Project and Building Assumptions
Asset and Debt Schedules
Cash Flow Statement
Valuation
Model Testing for Reasonableness and Accuracy
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# Absolute valuation

It is widely accepted that the most accurate way to value an enterprise is by absolute valuation using the discounted cash flow (DCF) method. Crucially, this method considers the time value of money. It also considers the cash flow throughout the projected life of the enterprise. This adheres closely to the definition of an enterprise's worth as the total amount of cash flow it can generate.

The DCF method includes technical concepts and calculations. We will attempt to simplify those concepts, but nevertheless, you will not have to repeat most of the complex computations required to derive some of the parameters necessary for the valuation. There will always be resources available for you to refer to, and you will certainly create your own database of resources, which you can tap as required.

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