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

Ratio Analysis

In order to assess a company, most people immediately look at its profit history. While this is one of the indicators that should be considered, it could be a mistake to make a decision based solely on that information. As we saw in Chapter 7, Cash Flow Statement, profits do not always equate to cash, and even the most profitable company can fold if the profits are not backed up by cash flow.

Ratio analysis looks at the profitability, liquidity, asset management and efficiency, debt management, and market value of a company. Each ratio takes two strategic items from financial statements and examines the relationship between them in order to gain some insight into the company's profitability, liquidity, and so on.

In this chapter, we will cover the following topics:

  • Understanding the meaning and benefits of ratio analysis
  • Learning about the various kinds of...