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

Using ratios to find financially stable companies

Let's assume that you are looking to invest in a company that is financially stable and has a good market value. We can find out the best company for this using the following ratios:

  • EPS: This can be useful ratio for finding the best company to invest in because it shows you how much money the company makes as profit for each share that the company sells
  • P/E ratio: This ratio tells you that there might be more growth in the future of the company, and it also shows you how much an investor is willing to pay for a share

We will go through the following steps to use these ratios:

  1. Open the CompanyInvestment.xlsx file, where you will find details about some companies, such as their PAT, number of shares, and the market price of each share, as shown in the following screenshot:
  1. Now, we will calculate the EPS for each company...