Building Financial Models with Microsoft Excel: A Guide for Business Professionals, Second Edition
- 2h 47m
- K. Scott Proctor
- John Wiley & Sons (US)
- 2010
A financial model is a quantitative representation of a company’s past, present, and future business operations. Companies of all types and sizes use financial models every day to analyze and plan their business activities. Financial models serve as the foundation and basis of standard financial accounting reports, including the balance sheet, the income statement, and the statement of cash flows.
While many business professionals are familiar with the "output" of financial models, namely consolidated financial statements, few are truly adept at building an accurate and effective financial model from the ground up. Building Financial Models with Microsoft Excel addresses this real, immediate, and significant issue like no other book. Written in a straightforward and accessible manner, it is a comprehensive resource for business professionals with a beginner or intermediate level of experience in both Microsoft Excel and finance or accounting.
Building a financial model is a logical, step-by-step process, where each component builds upon or feeds into another component. Building Financial Models with Microsoft Excel–organized to closely follow this process–is divided into three major parts.
Part One of Building Financial Models with Microsoft Excel introduces the concepts of budgets and financial models, and covers the steps involved in building the master budget –as well as its two key elements, the operating budget and financial budget. You’ll learn the fundamentals of the budgeting process and how various components of a master budget relate to one another. The master budget template provided in this part of the book serves as a road map for building each individual component of the financial model.
Part Two of this book deals with a company’s consolidated financial statements and free cash flows. It provides you with a guide to building these statements from scratch, based upon the operating and financial budgets of a company. The final part of Building Financial Models with Microsoft Excel–Part Three–deals with several important topics, including: various ways to analyze a financial model; the concept of valuation; and capitalization, or ownership, charts.
Filled with in-depth insights and easy-to-understand instructions, Building Financial Models with Microsoft Excel is a practical guide to understanding and creating fully functioning financial models.
About the Author
K. SCOTT PROCTOR, CFA, is the Director of Investor Analytics at SNL Financial, a financial information provider. Mr. Proctor was also a founding Principal of Vawter Capital, a private equity investment firm that focuses primarily on early- to mid-stage, entrepreneurial, privately held, technology-oriented enterprises in the healthcare, communications, and financial services industries. Mr. Proctor also served as the acting CFO of Illuminis, an Intel- and MCI-funded healthcare information systems company. He earned his BA, MBA, and MS (Management Information Systems) from the University of Virginia.
In this Book
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Foreword
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Overview of Budgets and Financial Models
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Operating Budget—Assumptions, Sales, and Collections
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Operating Budget—Cost of Goods Sold, Inventory, and Purchases
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Operating Budget—Operating Expenses
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Operating Budget—Income Statement
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Financial Budget—Capital Budget and Cash Budget
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Financial Budget—Balance Sheet
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Consolidated Financial Statements
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Free Cash Flows and Dashboard
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Sensitivity Analysis
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Contribution Margin Analysis
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Financial Ratios Analysis
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Valuation
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Capitalization Chart
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Answers to Chapter Questions
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About the CD-ROM
