Book Image

Hands-On Financial Modeling with Excel for Microsoft 365 - Second Edition

By : Shmuel Oluwa
Book Image

Hands-On Financial Modeling with Excel for Microsoft 365 - Second Edition

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 Excel for Microsoft 365 explores financial modeling terminologies with the help of Excel. Starting with the key concepts of Excel, such as formulas and functions, this updated second edition will help you to learn all about referencing frameworks and other advanced components for building financial models. As you proceed, you'll explore the advantages of Power Query, learn how to prepare a 3-statement model, inspect your financial projects, build assumptions, and analyze historical data to develop data-driven models and functional growth drivers. Next, you'll learn how to deal with iterations and provide graphical representations of ratios, before covering best practices for effective model testing. Later, you'll discover how to build a model to extract a statement of comprehensive income and financial position, and understand capital budgeting with the help of end-to-end case studies. By the end of this financial modeling Excel book, you'll have examined data from various use cases and have developed the skills you need to build financial models to extract the information required to make informed business decisions.
Table of Contents (19 chapters)
1
Part 1 – Financial Modeling Overview
4
Part 2 – The Use of Excel Features and Functions for Financial Modeling
8
Part 3 – Building an Integrated 3-Statement Financial Model with Valuation by DCF
15
Part 4 – Case Study

Asset schedule

A quick recap of our agenda is as follows:

  • Record the historical profit and loss accounts and balance sheet
  • Calculate the historical growth drivers
  • Project the growth drivers for the profit and loss accounts and balance sheet
  • Build up the projected profit and loss accounts and the balance sheet
  • Prepare the asset and depreciation schedule
  • Prepare the debt schedule
  • Prepare the cash flow statement
  • Ratio analysis
  • DCF valuation
  • Other valuations
  • Scenario analysis
  • Fixed assets including plant and machinery, land and buildings, equipment, motor vehicles, furniture, and fixtures

Any asset from which the company will derive economic value over a period of more than one year falls into the category of fixed assets. The period of producing economic value is called the useful life of the asset. Since the asset will be in use for over a year, it would be unfair to charge the entire cost of such an asset to the period in which...