Before moving on to the ways and the
techniques of learning financial modeling it would be good to get a clear idea
about the term. To put it simply, financial modeling is the process of
generating reports about a certain company and are aimed at a selected class of
investors. These reports enable the investors to understand the financial
health of the company and find out if they are worth the investment that the
investors are planning to make. Be it an investment bank, private
equity/venture capital (PE/VC) firms, research firms or corporate , financial
modelling is used everywhere in the financial sphere.
Working around a financial model requires
you to juggle with equations, formulas, multiple variables and mathematical
functions. Therefore it becomes easier to step into the financial modeling job
if you posses a well-crafted number crunching skill, a sound knowledge of
statistics together with a proficiency in tools like Microsoft Excel, SPSS,
SPA, computer languages like C++ and Oracle and an eye for detail . But to
excel in this field you have to learn it well. The basic ways are:
·
By watching tutorial videos.
·
By attending classroom training
sessions which may be payable or absolutely free.
·
By practising and using case
studies.
·
Through distant learning
courses.
In today’s world of technology and
automation where the hard bound documented financial model has given way to
dashboards, MS Excel is a great favourite of the financial researchers. The
only reason is that Excel offers a complicated yet simple platform for
performing the various activities like data mining, creating graphic
representation and studying data through various formulas. So it is quite
needless to say that the sooner you learn the Excel tools the better. Observing
the following steps should help you immensely in the creation of your model
using Excel and VBA.
Take
a pen and a paper-Draw a rough structure of the
model you want to build on a paper.
Concentrate
on the problem-Keep on asking yourself the problem
that your model aims to explain. Take the opinions of as many stake holders of
the model as possible.
Structuring
the logic and syntax with VBA-Be very careful while
using VBA as even a slight mistake on your part can strike a serious note of
discord in your model.
Dealing
with the trickiest part of financial modelling-While
putting in the variables always keep in mind that the value of the independent
variable never changes until it is
manually done. Whereas the dependant variable changes on the basis of the
independent one.
Formatting
the output cells appropriately-If the output cells
are not properly formatted, there is every chance of getting erroneous results.
Documenting
the model works wonders-After the pilot run is
over, record the logic, syntax, functions and formulas in a word document or a
notepad. It has two advantages-
1) When you start working on some other
model or if someone else has to work on your model and get stuck you can always
go back to your model and refer to the common formulas and functions (if there
happens to be any)
2) Or if you feel the need to make some
edits to your model, you can directly go to the required documented record
without wasting any time.
Be
on the constant lookout for bugs and errors-Remember
that your model can become a superb one only through constant monitoring and
updating. Go back to it and try to work out the errors and redundancies from
time to time.
Always
keep in mind that:
·
Getting familiar with the short
cut keys and the inbuilt Excel Help option can save you a lot of time.
·
Decking up your dashboard with
colours, fonts, sizes and shapes and naming the columns and rows appropriately
and clearly make your model more welcoming for future users.
Financial modelling is a lucrative career
and every year crowds of student aspire to enter this field. But the saddest
part of the story is that there is an alarming shortage of skill which creates
a gap between the aspirants and the employers. To fill up this gap you have to
acquire practical knowledge in financial modelling together with learning it
well. Some of the most effective training courses that can provide you the
required hands-on experience are:
FINANCIAL MODELING TRAINING IN DELHI
INDIA
Designed by experienced industrial experts,
our 6-week long training course teaches the students to apply their learnt
concepts in the practical field. Let’s check out the modules.
Week
1-MS Excel, Financial statements, Ratios, Relative
valuation.
Week
2-Financial Modelling , DCF valuation.
Week 3-Merger
Model, Valuation of a company going public (IPO).
Week 4-Capital Budgeting (project
feasibility, decision modelling) DDM modelling.
Week 5-Company profiles, pitch books,
valuation prospects-IPO, M & As, PE.
Week6-IPO pitch book, project
feasibility, case studies , revision.
Written tests and mock interviews are
integral part of the training and take place every week.
THE
FINANCIAL MODELING COURSE OFFERED BY BIWS
Let’s
us see what all you can get here.
·
100 training videos.
·
Lessons covering advanced
operating models.
·
Valuation lessons based on SEC
filings and equity research.
·
Advanced Merger models &
LBO models.
·
A sample pitch book and Power
point tips.
·
Bonus case studies.
·
Life time updates and support.
You receive instant access as soon as you
sign up. Everything is delivered online and shipping charges are free.
Apart from these trainings there is also a
course on THE INVESTMENT BANKING NETWORKING TOOL You would do well to sign up for
it, if you feel that you need to hone your skill in the art of networking. Now
that you have got a brief idea about the different types of courses, it is up
to you to decide which one will suit you best.
