WES Trainings

Financial Modelling & Decision Making

Course Outline

Day - 1

Introduction to Financial Modelling

  • What is Financial Modelling?
    • Definition, purpose, and key components of financial modelling
    • Importance of financial models in decision-making and business strategy
    • Types of financial models: forecasting models, valuation models, and budget models
  • Introduction to Excel for Financial Modelling
    • Excel functions and shortcuts critical for building financial models (SUMIF, VLOOKUP, INDEX/MATCH, etc.)
    • Using Excel tools for financial analysis: pivot tables, charts, and conditional formatting
  • Key Financial Statements and Their Role in Modelling
    • Overview of the income statement, balance sheet, and cash flow statement
    • How these financial statements are used to build models and project future performance
Day - 2

Building a Basic Financial Model

  • Setting Up a Financial Model
    • Creating a model framework: inputs, assumptions, calculations, and outputs
    • Developing financial projections: revenue forecasts, expenses, and profits
    • Forecasting cash flows and understanding working capital
  • Key Financial Ratios and Metrics
    • Calculating and interpreting key financial ratios: profitability, liquidity, efficiency, and solvency ratios
    • Using financial ratios in decision-making and assessing business performance
  • Building a Profit & Loss (P&L) Statement Model
    • Projecting revenue and expenses
    • Modelling operating income, EBITDA, and net income
    • Developing sensitivity analysis for various assumptions (e.g., sales growth, cost structure)
Day - 3

Advanced Financial Modelling Techniques

  • Valuation Models
    • Discounted Cash Flow (DCF) analysis: Discount rate, terminal value, and NPV
    • Comparable company analysis and precedent transactions
    • Using multiples for business valuation (P/E, EV/EBITDA, etc.)
  • Scenario Analysis and Sensitivity Testing
    • How to model different scenarios (best case, base case, worst case)
    • Sensitivity analysis: testing how changes in key assumptions impact financial outcomes
    • Developing risk models and understanding the impact of external factors (interest rates, market conditions)
  • Financial Modelling Best Practices
    • Structuring and organizing your financial model for clarity and accuracy
    • Common mistakes to avoid in financial modelling
    • Improving the accuracy and reliability of financial forecasts
Day - 4

Decision-Making Using Financial Models

  • Using Financial Models for Strategic Decision-Making
    • Applying financial models to make decisions about investment, cost reduction, and growth strategies
    • Making data-driven decisions for business expansion, new product development, and capital expenditures
  • Risk Management and Capital Budgeting
    • Evaluating investment projects using financial models: Payback period, IRR, NPV, and ROI
    • Capital budgeting decisions: determining whether to proceed with a project or investment
    • Managing risk and uncertainty in decision-making
  • Scenario-Based Decision-Making Exercises
    • Practical exercises where participants apply financial models to make real-world business decisions
    • Case studies of corporate financial decisions and their outcomes
Day - 5

Evaluating and Optimizing Financial Models

  • Model Evaluation and Refinement
    • Evaluating the reliability and performance of financial models
    • Testing for accuracy, consistency, and completeness
    • Optimizing financial models for scalability and future adaptability
  • Advanced Decision-Making Frameworks
    • Integrating financial modelling with decision-making frameworks like SWOT, PESTEL, and cost-benefit analysis
    • Using decision trees and Monte Carlo simulations in financial decision-making
  • Building a Robust Financial Model for Business Planning
    • Combining financial models with business strategies to develop long-term growth plans
    • Creating dashboards for continuous monitoring and decision-making
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