# 6-8 Short Financial Modeling Decisions Utilized by Companies

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Course topics1
2Course Topics Financial modelingOverviewFinancial modeling has become the course of advanced finance, excels skills and comprehensive knowledge used to understand financial models. This course is different from other course as it isknown as university course. Financial modeling is recognized The aim of following course IntroductionA financial model used to build excels to estimate business performance in finance in future. Theestimation is simply leads to companies past performance, presumptions about future and requirement in preparation of income statement, cash flow statement and balance sheet and three statement models. From thesis, latest models of various types can be made such as discounted cash flow analysis, leveraged buyout, mergers and acquisitions and sensitive analysis. Financial model output is used to make decisions and financial analysis performance, both inside and outside of company. Company inside executives will consider financial model in decision making: 1.Capital raising in debt or in equity form2.Acquisition of business assets
3Course Topics 3.Business growing organically included new stores opening, entering into new market segment.4.Estimation of future and budgeting.5.Value relevance in business6.Allocation of capital prioritizing projects.Objectives of financial modelingThe main objective of financial model is the success of foreign investment made by investors. Financial modeling helps the corporate management in decision making and also financial analysis preparation:1.Valuing a business2.Capital raising3.Business growth4.Acquisition making5.Selling assets and divesting business units6.Allocation of capital7.Forecasting and budgetingWhat characteristics have sound financial model?The good financial model implies:Understandability: The transparencies of designs used are easy to understand.
4Course Topics Reliability: Control checks used to error free excel so that error Easy to use: Instead of too much struggling to make simple results from bad model using the financial model one can produce the analysis.Key issues: The key issues focused on financial model are not to waste much time in immaterial items development.How to build financial modelsHistorical results and assumption:The first step of financial model building is withdrawing the previous income statements of firm.The statements are designed in excel format to cover the information of financial statement. The forecasted decision Balance sheet:Through income statement balance sheet can make. Calculation covered the account receivable and payable and accounting should be done according to them.Supporting schedulesDebts schedule and interest schedules are prepared in this step. The debt schedule releases the past recorded data and increases debts and deducts the payment done. Interest is calculated on the remaining balance.

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