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Introduction
This application driven 1-day programme leads delegates through selected advanced Excel functions and procedures pertinent to the construction of financial models, explaining the function or procedure and their uses.

Thereafter delegates will be introduced to best modelling principles and practices and will study in-depth the construction of a financial model, including model structure, key variable inputs, a complete set of financial statement outputs, key results, and techniques to analyse alternative model scenarios and sensitivities.

The latter part of the course will focus on investment decision making and improving corporate financial performance.

This is a very hands-on, non-intimidating, course - delegates work through various exercises under the supervision, and with the help, of the facilitator to get to grips with the nuances of effective financial modelling.

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Who Should Attend

  • All executives who receive financial models and wish to validate or manipulate same
  • All executives involved in the construction and use of spreadsheets and financial models, including budgets, projections, evaluations, cash flows, projects, etc.

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Pre Requisite(s)

Delegates should be familiar with Microsoft Excel (though not necessarily expert in the use thereof, as any relevant Excel function pertinent to an exercise will be discussed prior to tackling the exercise).

Excel knowledge required:
Basic & Intermediate Excel skills, including:
  1. Moving around the spreadsheet & workbook
  2. Inserting & deleting rows and columns
  3. Inserting text & formulas
  4. Copying and constructing formulas
  5. Formatting cells
  6. Basic Excel functions - calling and using Excels functions
  7. Making cell addresses absolute

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Outcomes

On completion of this practical, hands-on training course, delegates will:
  • Be able to build well-structured, flexible financial models
  • Be able to apply many of the advanced functions and techniques available in Excel
  • Understand, create, and use scenarios, data tables, sensitivity tables, goal-seeking, etc.
  • Be able to apply what they've learnt in the calculation of Wacc, NPV, IRR, loans, free cash flow and break-even points
  • Have at their fingertips a comprehensive reference manual and worked examples relating to the building of financial models

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Course Content

Applied Excel Techniques
  • Useful tips.. - focus on specific tips
  • Quick steps and tests to understand/verify model structure and integrity
  • Choose
    • Choose - Exercise
  • Creating Views
  • Data Tables
    • Data tables - Exercise
  • Data Validation
  • Drilling down - Hyperlinking
  • Formula Auditing Toolbar -Evaluating formulas
  • Formulas- auditing, copying, displaying, locating, making absolute, naming
  • Goalseeking
  • Grouping & Outlining - Collapsing rows and columns
  • If Statements - Logical tests, multiple (nested) if statements
  • Inflating Values
  • Max and Min
  • Naming cells, ranges & formulas
  • Naming formulas
  • Pivot Table Reports
    • Pivot Table Exercise - Interpreting volumes of data
  • Pivot Tables - Consolidating data from multiple ranges
  • Protecting data in spreadsheets
  • Protection - Hiding formulas
  • Using "masks"
Financial Modelling
  • Types of financial models
  • Example of a deterministic model
  • Model Structure
  • Steps in developing a financial model
  • Structuring your model
  • The integrity of the model
    • Detailed Study of "Highway Model"
  • Discounted cash flow
  • Discounted cash flow over unequal periods
    • Exercise - Which project produces the best yield?
  • Free Cash Flow
  • Measuring the return on investment
  • Project Ratios
  • Debt Service Cover ratio
  • Sensitivity analysis
  • Creating a sensitivity graph
  • Creating Scenarios
  • Comparing Scenarios
  • Scenario Summary
    • Exercise - Sensitivity analysis - Highway model
    • Exercise - Creating Scenarios in Highway model
    • Exercise - Creating a data table in Highway model

Investment Decisions
  • Choosing between alternatives capital investment options
    • Optional exercise - Lease or Buy - Anticipating change

Improving Corporate Performance
  • The Weighted Average Cost of Capital (WACC)
  • The cost of shareholders' funds
  • Leverage - How it affects returns
  • Profitability, Activity and RONA
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