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
1
Section 1: Financial Modeling - Overview
4
Section 2: The Use of Excel - Features and Functions for Financial Modeling
7
Section 3: Building an Integrated Financial Model

Building assumptions

A financial model can be defined as the collection of mathematical assumptions for the purpose of the results, financial position, and cash flow of a business in the future, often with a view to arriving at a value for the business. Building reliable assumptions is critical to the success of your model.

The following is a quick checklist for your assumptions:

  • Based on actual historical figures
  • Realistic
  • Clearly explained
  • Easily verifiable
  • Properly documented
  • Visually distinguishable in your model (usually with a different font) from calculated cells

General assumptions

The overall assumptions of your model are that the business will be profitable and cash flow will ultimately be positive.

You also assume...