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- Week 1. Introduction and general principles
- Financial modeling process covers many issues related to the content of your model: forecasts, costs, investments, reports, and charts. During the work your attention will be focused on this data, and meantime the model will be generating thousands of cells with numbers and ratios, going through revisions and even being passed from one analyst to another. You should adhere commonly accepted rules and approaches to keep your model error-free, neat, and transparent. By the end of this module you will be able to setup your first model and add some elements that will serve as building blocks for the content for the model.
- Week 2. Assumptions.
- It is your assumptions that define reliability of your analysis, so the assumptions are one of the most important parts of a model. They fulfil two roles: provide data for the calculations and reports and link the model with research and analysis supporting your forecast. Every project is unique; there is no standard template for assumptions that fits them all. By the end of this module you will be able to create correct and transparent model for expected sales, costs, and CAPEX of a project.
- Week 3. Reports and financing.
- Financial reports help you present the projects in a standardized form which makes all communications with investors and partners easier and faster. By the end of this module you will be able to work with three main financial reports and understand relations between project assumptions and those reports, choose a target capital structure, model a loan and generate an acceptable schedule to repay the loan.
- Week 4. Analysis and presentation.
- Discounted cash flow analysis is a vital part of financial models for any capital investment – therefore the whole model is often called DCF model. Now, when we have a complete forecast of our project, we are ready to answer the key question – is it profitable?
However, one answer for one scenario is not enough. No project goes exactly as it was planned. In the model, we describe not certain future cash flows, but just a scenario that we believe is the most probable outcome of the project. Life can change these chances, and other participants of the project can see those scenarios differently.
By the end of this module you will be able to calculate such important indicators as NPV or IRR, as well as to analyze the income expected beyond the range of your model, perform a fully-fledged what-if analysis and present a broad range of possible scenarios in one model.
- Week 5. Capstone project.
- This capstone project module will give you a taste of what financial analysts go through in real life when developing a financial model. You will choose a real or fictious project, collect necessary data and build a model from a template provided here. Finally, you will be required to submit your model for peer evaluation.