Day 3 - A solid understanding of financial statement accounting, ideally through our Financial Statement Analysis courses.
Day 4 - A solid understanding of financial statement accounting. This day builds on the learning from day 3 but you are not required to have attended the previous days.
Day 5 - Building on days 3 and 4. A solid understanding of financial statement accounting and modeling using a template is required in order to maximize the learning benefits.
Participants will learn how to model and integrate the income statement, balance sheet and cash flow of a fast food business using Excel. In addition to learning the steps necessary to build a three statement financial model, participants will also cover how to build models accurately and efficiently through a series of best practice modeling rules. Participants also learn how to stress-test the assumptions used, to check their work efficiently and to document it.
Through the process of building a more complex three statement model, participants are taught how to model operating cash and calculate interest using average debt and average cash balances. The class will address in detail how to work with intentional circular references. The issue of non-intentional circular references is covered and participants are taught modeling rules that are designed to help avoid them. The session is designed to expose participants to different three statement modeling styles: multi-sheet, tower, and different income statement layouts. Exposure to a mix of modeling styles will help prepare them to work on in-house models or models they may inherit from other finance professionals.
Participants will learn how to build a three statement model using a detailed revenue forecast with price and volume drivers. A full debt schedule, including a cash sweep, is incorporated into the model. In addition to the main class case model, participants are given exercises to help them understand more complex modeling issues (for example, detailed depreciation schedules and working capital items). Common errors are covered from balancing a non-balancing balance sheet to debugging a model that is non-intentionally circular.
Common errors are covered from balancing a non-balancing balance sheet to debugging a model that is non-intentionally circular.
Participants start with an Excel worksheet with two years of historicals of the main case company pre-inputted. The financial statements of the case company are then analyzed, and the latest historical data is cleaned and prepared for the forecasting process. Ratios are calculated and assumptions for each line item in the financial statements are created. The full forecast model is then built. The forecasting techniques for several different items are examined separately, using dedicated Excel files, before being adapted for the case company.
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