Learn Financial Modelling before Stepping Into the Finance World

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.

Remember, Financial Modelling is a skill that gets better and sharper with practise and experience.   So friends, there are no shortcuts. It is only hard work and dedication that can help you realize your dream of becoming a triumphant industrial expert.