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

Illustrative example

Some of the many errors found in source data include partial summarization of the data and grouping of some field headers. In this example, we are going to clean and transform data using various tools, including Unpivot.

You are given a dataset of sales per salesperson in two regions. The dataset includes a number of anomalies, including subtotals and headers in more than one row, as shown in Figure 5.11. You are asked to prepare a pivot table from the data.

(Sample data is available for download to give a more hands-on experience.)

Figure 5.11 – Sales by salesperson, by product, and by region

Use the following steps to load the table into Power Query, transform the data, and finally load it back into Excel as clean data ready for further analysis:

  1. The first step is to convert the data into a table.

Since the data has multiple header rows (see Figure 5.12), you will have to uncheck the option that says My...