Financial Modeling: Learn In 9 Easy Steps (Video Series)
Table Of Contents
Financial Modeling: Learn In 9 Easy Steps
Financial modeling is a comprehensive process that involves creating a detailed and dynamic representation of a company's financial performance. It serves as a vital tool for decision-making, enabling stakeholders to analyze the past, assess the present, and predict future performance.
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The process is typically broken down into structured steps, from establishing the model framework and analyzing historical data, to projecting revenues, costs, and other key financial elements such as depreciation, working capital, and debt. Ultimately, the goal is to balance the balance sheet and ensure that all financial assumptions and projections align, offering a reliable forecast that guides strategic planning and investment decisions.
In this 9 part video tutorial series, learn from industry expert Dheeraj Vaidya, CFA, FRM, how to create a financial model and make precise projections.
Financial Modeling: Step-By-Step
- Step 1 - Creating The Structure: Establish the framework and assumptions for the financial model.
- Step 2 - Analyzing Historicals: Review past financial data to understand performance trends.
- Step 3 - Projecting Revenues: Forecast future income based on historical trends and market factors.
- Step 4 - Projecting Costs: Estimate future expenses based on historical data and anticipated changes.
- Step 5 - Projecting Depreciation: Calculate future depreciation based on asset schedules and usage.
- Step 6 - Working Capital: Forecast changes in working capital to assess liquidity and operational efficiency.
- Step 7 - Completing Cash Flows: Consolidate all sources and uses of cash for accurate liquidity projections.
- Step 8 - Projecting Debt: Estimate future debt obligations and their impact on cash flow and balance sheet.
- Step 9 - Balancing the Balance Sheet: Ensure that assets, liabilities, and equity are properly aligned.
