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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Implementing the referencing framework

Now that you are all caught up with the theory behind each type of referencing framework and know where to use each of them, let's apply that knowledge to a real-life scenario.

Assume that you are a teacher and that you have the marks of the students in an entire class, and you need to sort and divide the data into different groups, based on the following criteria:

• Total marks scored by the student in all languages
• Total marks scored by the student in all sciences
• Overall marks scored

The referencing framework really comes into its own in such scenarios. We can sort our data using the required criteria by following these steps:

1. Open the Marks.xlsx file provided to you, which contains the grades of 66 students who appeared for their midterms. The data will look similar to the following screenshot:
1. Now, we will start sorting the...