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Introduction
This application-driven, hands-on practical 3-day program initially provides delegates with useful Excel tips & tricks to help speed up the building of their models, and then leads them through various financial modelling techniques, using Excel as the tool.

The first day is spent discussing various aspects of project finance, including sources of finance, contractual implications, making investment decisions, project parlance and terminology and alternative valuation methods. It assumes that delegates are involved in the financial sector or in corporate financial activities, have a working background of project modelling and evaluation.

Days 2 and 3 focus on the basic nuts & bolts of financial model preparation and structure, and provides the delegate with useful modelling techniques than can be immediately applied in the work place in the project evaluation environment.

The latter two days will be spent on demonstrating various techniques, interspersed with short hands-on exercises for certain of the more useful areas to reinforce the examples presented. Participants will build a complete project model, from first principles, in various stages over the two days.

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Who Should Attend
  • Financial officers, planners, middle and senior management in project evaluation
  • Persons involved in the construction of project financial model

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    Outline
    Over the three days of the course we will discuss various aspects of project financial modelling using Excel spreadsheet techniques, covering most of the useful features so far as they affect the everyday preparation of models.

    Participants will pick up a number of useful tips and some interesting techniques to aid in their own endeavours.

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    Course structure

    On completion of this practical, hands-on training course, delegates will:
    • Be able to build well-structured, flexible project 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 project financial models

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    Outcomes
    • 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
    • Be able to apply Excel's Solver in the preparation of optimisation models
    • Have a basic understanding of regression analysis and Monte-Carlo simulation
    • Have at their fingertips a comprehensive reference manual and worked examples relating to the building of financial models

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    Course Content
    Introduction


    Some useful tips
    Structuring your model
    Model Structure
    The integrity of the model
    Creating your own formats
    Creating conditional formats
    Validating data
    Displaying messages using an IF statement

    Model 1

    Building a 20-year project model
  • Toll road project exercise 1

    • Using =SUM to accumulate data
    Using "masks"
  • Toll road project exercise 2

    • Calculating Loan capital and Interest payments
  • Toll road project exercise 3 - Comparing results and calculating the loans

    • Contribution
    Extracting positive and negative balances
  • Toll road project exercise 4 - Preparing an Income Statement
  • Toll road project exercise 5 - Preparing a Cash flow Statement and Balance Sheet

    • Creating hyperlinks to schedules
    Choosing between alternatives
  • Exercise - Choosing between alternatives

    • Inflating values
    Inflation rates and drawdowns

    Model 2

    Background to the New Product Project model
    Exercise 1 - Inflation rates and drawdowns
    Example of a loan with delayed repayments
  • Exercise 2 - Calculating the Primary Loan

    • Free cash flow
    Example of calculating free cash flow
    Project ratios
  • Exercise 3 - Calculating the Debt Service Cover Ratio

    • Calculating the loan limit (based on the DSCR)
    The cash flow "waterfall"
  • Exercise 4 - Calculating the waterfall
  • Exercise 5 - The financial statements

    • Discounted Cash Flow
  • Exercise - Which project produces the best yield?

    • Measuring the return on investment
  • Exercise 6 - Calculating the returns

    • Using the "Offset" function in Excel
    The Weighted Average Cost of Capital (WACC)
    Sensitivity analysis
    Recording a Macro
    Creating a sensitivity graph
    Data tables
  • Exercise 7 - Data Tables

    • Enhancing the New Product Project model with a sensitivity table and data table
    Creating Scenarios
    Comparing Scenarios
    Scenario summary
  • Exercise 8 - Setting up scenarios in the project

    • Exercise (optional)
  • Calculating the cash flow of a project financed by a loan and by investors

    • Uses of the Ctrl key
    Equivalents in Excel 2007

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