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The document outlines the concept of financial modeling, describing it as a numerical representation of an entity's financial aspects used for decision-making. It details who can create financial models, their purpose in business, and the characteristics of a good model. Additionally, it emphasizes the skills needed for effective modeling and the learning approach for mastering these skills, culminating in course completion and placement opportunities.

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Dev Ramnani
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23 views11 pages

M0+ +Goal+Setting

The document outlines the concept of financial modeling, describing it as a numerical representation of an entity's financial aspects used for decision-making. It details who can create financial models, their purpose in business, and the characteristics of a good model. Additionally, it emphasizes the skills needed for effective modeling and the learning approach for mastering these skills, culminating in course completion and placement opportunities.

Uploaded by

Dev Ramnani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Orientation and Goal Setting

Financial Modelling
What is a financial model

A numerical of some (or all) of an entity’s


representation financial aspects operations

⮚ It is a data-driven planning tool for making a financial decision.

How is it made
⮚ It is made with the help of a spreadsheet or a dedicated financial software

Simple example of a model to estimate


monthly savings of an entity
Who makes financial models
⮚ Anyone and everyone can make a financial model, for example
⮚ A student calculating if their pocket money will be enough to pay EMI on a new phone
⮚ A married couple evaluating the decision to buy a house or rent one

⮚ However, it is a mandatory skill for anyone in the field of finance

⮚ The following Finance roles are among the most active users of financial models
⮚ Investment bankers and other types of banking professionals
⮚ Equity researchers
⮚ Financial planning advisors
⮚ Private Equity and Venture Capital professionals
⮚ Hedge fund managers
⮚ Corporate finance executives
⮚ Project finance professionals
Why are financial models made

⮚ They are made to assist in decision making and planning


⮚ Typical business uses of Financial modelling include

• Used to estimate the attractiveness of a


Business valuation business or compare it to its peers

• Used to estimate if a stock is over / under


Stock valuation valued or its sensitivity to various changes

Project evaluation/ • Used to decide project viability, decide on


strategic planning budget allocation or scenario testing
What does a model look like?

⮚ A simple model would have one or


two excel sheets
⮚ An intermediary model would have
multiple interlinked sheets
⮚ A complex model would have many
interlinked sheets with macros

⮚ Depending on the audience, these


models would also have detailed
comments or even a separate report
What a “good” model should aim for

• Assumptions behind the model should be realistic


Realistic • Else “Garbage in Garbage Out”

• Careless errors can lead to erroneous financial decisions


Error-free • Avoid “bad habits” when creating models

• Changes in assumptions are inevitable in todays world


Flexible • Model should allow any level of change to be factored

• Changing an input should visibly result in output change


Easy to use • Keep notes to prevent losing control over your model

• Others should also be able to use your model


Self-explanatory • Acid test is if they can do so without your guidance
Skills needed for a “good” model

Part of the Course

Fundamentals
Financial
of Corporate Forecasting Software Skills
Analysis
Finance

Industry
Soft Skills &
Knowledge & Problem Solving Quantitative
Continued
Attention to Attitude Skills
Learning
Detail

Will come through practice & dedication


Learning approach
⮚ Theoretical frameworks
⮚ Able to apply theory to make realistic assumptions and correctly handle financial
information

⮚ Active learning
⮚ Able to convert theory into practice through developing real models in Excel under the
supervision of faculty members in form of Class & Home Assignments.
Course completion

Move to
Placement
Clear the
Placement
Eligibility Test
Clear external
certification
exam (NSE)
Clear internal
certification
exam
Complete the
modules with
required criteria
LMS & Placement Portal

⮚ Link to LMS (Moodle) - https://prolearn.proschoolonline.com/

⮚ Link to Placement Portal - https://enroll.proschoolonline.com/login


THANK YOU

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