#### 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
Another Book You May Enjoy

# Excel – the ideal tool

The following features make Excel the ideal tool for any data:

• Understanding data: No other software mimics human understanding the way Excel does. Excel understands that there are 60 seconds in a minute, 60 minutes in an hour, 24 hours in a day, and so on to weeks, months and years. Excel knows the days of the week, months of the year, and their abbreviations, for example, Wed for Wednesday, Aug for August, and 03 for March! Excel even knows which months have 30 days, which months have 31 days, which years have 28 days in February, and which are leap years and have 29 days. It can differentiate between numbers and text, it also knows that you can add, subtract, multiply, and divide numbers, and we can arrange text in alphabetical order. On the foundation of this human-like understanding of these parameters, Excel has built an amazing array of features and functions that allow the user to extract almost unimaginable detail from an array of data.
• Navigation: Models can very quickly become very large, and with Excel's capacity, most models will be limited only by your imagination and appetite. This can make your model unwieldy and difficult to navigate. Excel is wealthy in navigation tools and shortcuts, it makes the process less stressful and even enjoyable. The following are examples of some of the navigation tools:
• Ctrl + PgUp/PgDn: These keys allow you to quickly move from one worksheet to the next. Ctrl + PgDn jumps to the next worksheet and Ctrl + PgUp jumps to the previous worksheet.
• Ctrl + Arrow Key (→↓←↑­): If the active cell (the cell you're in) is blank, then pressing Ctrl + Arrow key will cause the cursor to jump to the first populated cell in the direction of the cursor. If the active cell is populated, then pressing Ctrl + Arrow key will cause the cursor to jump to the last populated cell before a blank cell, in the direction of the cursor.