The Handbook of Financial Modeling

The Handbook of Financial Modeling: A Practical Approach to Creating and Implementing Valuation Projection Models

The ability to create and understand financial models that assess the valuation of a company, the projects it undertakes, and its future earnings/profit projections is one of the most valued skills in corporate finance. However, while many business professionals are familiar with financial statements and accounting reports, few are truly proficient at building an accurate and effective financial model from the ground up. That’s why, in The Financial Modeling Handbook, Jack Avon equips financial professionals with all the tools they need to precisely and effectively monitor a company’s assets and project its future performance.

Based on the author’s extensive experience building models in business and finance—and teaching others to do the same—The Handbook of Financial Modeling takes readers step by step through the financial modeling process, starting with a general overview of the history and evolution of financial modeling. It then moves on to more technical topics, such as the principles of financial modeling and the proper way to approach a financial modeling assignment, before covering key application areas for modeling in Microsoft Excel.

Designed for intermediate and advanced modelers who wish to expand and enhance their knowledge, The Handbook of Financial Modeling also covers:

• The accounting and finance concepts that underpin working financial models;
• How to approach financial issues and solutions from a modeler’s perspective;
• The importance of thinking about end users when developing a financial model;
• How to plan, design, and build a fully functional financial model;
• And more.

A nuts-to-bolts guide to solving common financial problems with spreadsheets, The Handbook of Financial Modeling is a one-stop resource for anyone who needs to build or analyze financial models.

What you’ll learn

• Key financial modeling principles, including best practices, principles around calculations, and the importance of producing clean, clear financial models
• How to design and implement a projection model that allows the user to change inputs quickly for sensitivity testing
• The proper way to approach a financial modeling assignment, from project planning all the way through to the documentation of the model’s findings and effectiveness
• How to model in Microsoft Excel, including how to set up an Excel environment, how to format worksheets, and the correct application of various modeling formulae
• The skills and knowledge they need to become more proficient financial modelers and differentiate themselves from their professional competitors.

Who this book is for

Written in a clear, concise manner and filled with screen grabs that will facilitate readers’ comprehension of the financial modeling process, The Handbook of Financial Modeling is appropriate for intermediate to advanced financial modelers who are looking to learn how to enhance their modeling proficiency.

Table of Contents

Chapter 1. Financial Modeling: An Overview
Chapter 2. Financial Modeling Best Practices
Chapter 3. Modeling Functions and Tools
Chapter 4. Planning Your Model
Chapter 5. Testing and Documenting Your Model
Chapter 6. Designing and Building Your Model
Chapter 7. The Model User: Inputs
Chapter 8. An Introduction to Finance and Accounting for Modelers
Chapter 9. Managing and Evaluating a Business for Modelers
Chapter 10. The Implications and Rules of Accounting for Modelers
Chapter 11. Financial Based Calculations
Chapter 12. Logical and Structural Based Calculations
Chapter 13. How to Capture Document and Track Assumptions in Your Model
Chapter 14. Modeling to Give the User Transparency
Chapter 15. Model Testing and Auditing
Chapter 16. Modeling Handover Dos and Don’ts.
Chapter 17. Case Study: Building a Full Life Cycle Model
Chapter 18. Additional Tools and VBA for Financial Models
Chapter 19. What is the Future of Financial Modeling?
Chapter 20. Keyboard Shortcuts
Chapter 21. Finance and Accounting Glossary
Chapter 22. Readymade Functions
Chapter 23. Sample Outputs
Chapter 24. Housekeeping
Chapter 25. References