A concise and practical guide to financial modeling in Excel

InThe Essentials of Financial Modeling in Excel: A Concise Guide to Concepts and Methods, veteran quantitative modeling and business analysis expert Dr. Michael Rees delivers a practical and hands-on introduction to financial modeling in Excel. The author offers readers a well-structured and strategic toolkit to learn modeling from scratch, focusing on the core economic concepts and the structures commonly required within Excel models.

Divided into six parts, the book discusses the use of models and the factors to consider when designing and building models so that they can be as powerful as possible, yet simple. . Readers will also find:The foundational structures and calculations most frequently used in modeling, including growth- and ratio-based methods, corkscrews, and waterfall analysisWalkthroughs of economic modeling, measurement, and evaluation, and the linking of these to the decision criteria. These include breakeven and payback analysis, compounding, discounting, calculation of returns, loan calculations, and othersStructured approaches for modeling in corporate finance, including financial statement modeling, cash flow valuation, cost of capital, and ratio analysisTechniques to implement sensitivity and scenario analysisCore aspects of statistical analysis, including data preparation, manipulation, and integrationThe use of approximately 100 Excel functions within example modeling contextsFurther Topics Sections, which introduce advanced aspects of many areas, in order to provide further benefit to more advance readers, whilst presenting the truly essential topics separately. Examples of these include introductions to PowerQuery and PowerPivot, as well as advanced waterfall structures

An invaluable, all-in-one blueprint for learning financial modeling in Excel, this book is ideal for beginning and intermediate financial professionals and students seeking to build and reinforce essential topics in financial modeling.

Michael Rees is Professor of Finance at Audencia Business School in Nantes, France. He has over 30 years experience in senior roles at leading firms in finance and strategy consulting, including JP Morgan, Mercer Management Consulting, and Braxton Associates. He has also worked as an independent consultant and trainer, advising clients in private equity, auditing and consulting, finance, banking, insur­ance, pharmaceuticals, and other industries.

About This Book

The Author

Dedication

PART I: INTRODUCTION TO MODELING

Chapter 1: Modeling and Its Uses

Chapter 2: Principles of Model Design

PART II: ESSENTIALS OF EXCEL

Chapter 3: Menus, Operations, Functions and Features

Chapter 4: Sensitivity and Scenario Analysis

PART III: GENERAL CALCULATIONS AND STRUCTURES

Chapter 5: Growth Calculations for Forecasting

Chapter 6: Modular Structures and Summary Reports

Chapter 7: Scaling and Ratio-driven Forecasts

Chapter 8: Corkscrews and Reverse Corkscrews

Chapter 9: Waterfall Allocations

Chapter 10: Interpolations and Allocations

PART IV: ECONOMIC FOUNDATIONS AND EVALUATION

Chapter 11: Breakeven and Payback Analysis

Chapter 12: Interest Rates and Compounding

Chapter 13: Loan Repayment Calculations

Chapter 14: Discounting, Present Values and Annuities

Chapter 15: Returns and Internal Rates of Returns

PART V: CORPORATE FINANCE AND VALUATION

Chapter 16: The Cost of Capital

Chapter 17: Financial Statement Modeling

Chapter 18: Corporate Valuation Modeling

Chapter 19: Ratio Analysis

PART VI: DATA AND STATISTICAL ANALYSIS

Chapter 20: Statistical Analysis and Measures

Chapter 21: Data Preparation: Sourcing, Manipulation, and Integration