#### 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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# Applying the Referencing Framework in Excel

Let's assume that a worksheet in Microsoft Excel is divided into over 1 million rows and over 16,000 columns. The rows are labeled 1, 2, 3, and so on, up to 1,048,576, and the columns are labeled A, B, C, and so on, up to XFD. The rows and columns intersect to form over 16 billion cells in one worksheet.

However, since a cell is identified by the columns and rows that intersect to form it, each cell has a unique identification, which is conventionally written as the intersecting column and row names. Thus, the UV column and row 59 form the UV59 cell. There is no other UV59 cell on that worksheet, of that workbook, on that computer. This feature forms the basis for the referencing framework in Excel. This chapter will talk about the various types of referencing frameworks and how to implement each one of them in order to simplify...