#### 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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# Preparing ratio analysis

With the preparation of a cash flow statement, we now have the core content of a set of financial statements. These financial statements, now referred to as a statement of financial position, statement of comprehensive income, and cash flow statement, along with explanatory notes and schedules, are distributed to shareholders of the company and government. It is also these financial statements that are available to other interest groups such as investors and holders of the debt capital of the company.

The financial statements provide a significant amount of information about the company and its results for the period under review. However, on their own, they are not adequate for decision making. Ratio analysis provides an in-depth look at the details behind the figures. The following screenshot is an example of a set of ratio analysis:

By looking at the...