Financial+Modeling+PPT汇.ppt

Introduction to Financial Modeling Brought to you by: The EDS Financial Trading and Technology Center Teaching Assistants The Financial Modeling Class Initiated by the Department of Finance and Assembled by FTTC Proctors Two classes – 1 hour + 1 hour exercise Financial Modeling I (w/ exercise) Financial Modeling II (w/ exercise) Conducted two or three times per semester Class Outline Introduction to Financial Modeling Definition Types of Models Used Format Tips for Modeling in Excel Structuring the Model Making the Model Easy to Use Some Excel Tools and Keyboard Shortcuts Example Build-out of Several Financial Models DCF DDM WACC Comparables QA Break Practical Exercise (1 hour) What Does a Financial Model Do? Compute many different types of finance problems Bond immunization Portfolio weightings Equity valuations Valuations of mergers, acquisitions, or divestitures Forecast financial performance Earnings growth Profitability Options Analyze different economic and financial scenarios Options payoffs given different expirations Sales growth given different economies/business cycles Profitability given different product demand quantities Types of Financial Models (Investment Banking) Dynamic Forecast Model Merger Consequences Model - Mergers, acquisitions, divestitures Leveraged Buy-Out (LBO) Model Discounted Cash Flow (DCF) Model Recapitalization Model Some Examples of Financial Models Some Examples of Financial Models Some Examples of Financial Models What Makes a GOOD Financial Model? Flexibility: Design the model so that it can be modified easily. ?? Tip: any assumption that was made to create the model, such as revenue growth, or discount rate, should be easy to change Visibility: Create the model under the premise that anyone should be able to review/audit and understand it quickly. ?? Tip: refrain from embedding hard coded data in formulas or hiding/grouping rows/columns Organization and Design: Organize workbook so that worksheets flow together log