At the end of the course, students are expected to be able to set up an operating model (income statement, balance sheet, and free cash flow statement), a DCF, sensitivities, a merger model, and a LBO model (advanced class only) meeting the level of standards required by investment banks.
Introduction to the basic modeling rules and recap of the main accounting principles:
- Recap of basic accounting concepts used to build a financial model
- Introduction to the principles of modeling and practice through exercises
- Presentation to common Excel shortcuts used in modeling
- Presentation of the ‘choose’ and ‘offset’ functions
- Introduction to circular references and their use in interest calculation.
Creation of an operating model and of a DCF:
- Creating an operating model and a DCF step by step
- Sensitivities around the WACC and the long term growth rate
- Sensitivities around the EBIT margin and the growth rate.
Creation of a merger model:
- Creating a merger model step by step
- Accretion / dilution analysis.
Creation of a LBO model:
- Creating a LBO model step by step
- Return calculations for PE funds.