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

Projecting the balance sheet and profit and loss account

In order to project the financials, you will need to determine the growth drivers for the balance sheet and profit and loss account. Growth drivers are those parameters that best capture the movement in individual items over the years. The nature of the item and your expertise will determine which parameter you select as an appropriate growth driver. An example of a growth driver for turnover is the year-on-year growth or inflation.

You should know that the balance sheet growth drivers are not as straightforward as with the profit and loss. We will cover this in detail in Chapter 5, Understanding the Project and Building Assumptions.

Once the growth drivers have been calculated, you will then need to refer to your notes on the discussions with the management and, in particular, the section heads for their suggestions on...