Building a Model From Scratch in Excel

Participants start with a blank spreadsheet and build a model template. The financial statements of a case company are then analyzed, and the historical data is cleaned and prepared for the forecasting process. Ratios are calculated and assumptions for each line item in the financial statements are created. The full forecast model is then built. The forecasting techniques for several different items are examined separately, using dedicated Excel files, before being adapted for the case company. Complex issues such as minority interest and affiliates are also covered in this session. The full exercise takes 2 days.

• How to set up a model from a blank spreadsheet
• Building a model template, which can be used for all future modeling exercises
• Using styles to control formatting
• Techniques to quickly copy information from a pdf into a spreadsheet
• Identifying relevant information in the company’s financial statements, management discussion and analysis, and notes
• Creating and using reasonably complex models for revenues
• Adjusting historical performance for acquisitions and divestitures
• Analyzing and making reasonable projections for a company’s operating costs, non-recurring items, and other income and expense
  • Creating assumptions and forecasting balance sheet accounts
  • Revenues and costs
  • Fixed assets - capital expenditure and depreciation
  • Intangible assets
  • Operating working capital
  • Provisions
  • Effective tax rate, taxes payable and the various deferred tax items
  • Debt schedule
  • Equity and share repurchases
  • Equity method investments and minority interests
• Building a cash flow statement from scratch
• Documentation techniques and ratio analysis
• Integrity checking