Financial Modeling on Excel Complete finance course on Excel
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If you are interested in finance careers, such as Private Equity, M&A, financial controling or financial management, you’ve likely realized that one key skill is indispensable across all these finance fields: it’s financial modeling.
Financial modeling is the cornerstone of finance, underpinning essential tasks such as developing Business Plans, generating reports in Excel, and valuing companies. The ability to create reliable and well-structured financial models is therefore crucial if you aim to pursue a career in corporate finance.
This is why many job interviews include technical cases on Excel. Within 30 minutes to an hour, employers can assess candidates by providing them with a computer and specific instructions, effectively identifying the top 10% who excel in financial modeling.
This comprehensive finance course on Excel will provide you with the knowledge, techniques, and best practices to create clear, well-structured models that meet the high standards of investment banks, Private Equity firms and financial management teams.
In this training, you will learn the standards and rules of financial modeling to produce professional, rigorous, optimized, and error-free outputs. You will be guided through designing a complete financial model with various investment and development scenarios for a company, including a debt schedule with multiple financing tranches, a Sources and Uses table, a clear Business Plan, and valuation using the transaction comparables method based on a normative EBITDA. Finally, we will calculate the IRR and analyze it according to investment exit parameters.
If these concepts are unfamiliar to you, we will cover them before diving into financial modeling in Excel. This course revisits essential finance fundamentals and the necessary knowledge you must master if you are interested in financial controlling, financial analysis, or transactional careers (PE, M&A, TS).
Instructor Introduction:
My name is Yassine, and I am the founder of a corporate finance training organization that has helped thousands of students and recent graduates prepare for interviews in Private Equity, investment banking, and consulting firms in Transaction Services, Valuation, and Financial Restructuring.
I am also a former Associate in Private Equity, having worked for two years in two different investment funds in Paris on small-cap operations across various sectors, including hospitality and real estate, tech and media, and renewable energy.
Additionally, I was a senior consultant in Valuation and Financial Modeling at EY, where I worked on multiple financial models in transactional contexts and investment projects.
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IntroductionThis comprehensive course on financial modeling on Excel will provide you with the knowledge, codes, and best practices to be able to create a clear, well-structured Excel model that meets the expectations of investment banks, Private Equity funds, and financial management teams.
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Overview and structure of the financial modeling course
Introductory video: Let's get to know each other before we start the financial modeling.
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Available resources for the course
This is the general structure of the course.
We'll look at what financial modeling is. Why it's so important and why finance juniors have such a hard time with these technical subjects.
We'll look at best practices in financial modeling.
Then I'll show you a complete Excel model.
I'll share my screen with you and we'll rebuild the Excel file together. The aim is to guide you step by step as you learn.
With a model of 6 - 7 tabs, you'll have seen the vast majority of modeling topics. I'll show you how to build the model and try to get you involved too, with quizzes at the end of each section.
I'll share tips throughout the videos on how to become a good financial analyst and build the best Excel models.
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Why this course is valuable?
Before I get to the heart of the course, I'll summarize in this short video the reasons that led me to build this course.
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Navigating between sessions in the course
Feel free to watch some videos at x1.25 or even x1.5 speed if you are familiar with the concepts presented in these first introductory sections. You can return to x1.0 speed when modeling on Excel.
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What is financial modeling?
In this video, we'll look at what financial modeling is and why we use Excel rather than any other spreadsheet program.
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What is financial modeling used for?
Financial Modeling can serve several purposes:
Represent an operational/accounting/financial situation.
Facilitate decision-making (after studying a situation): (invest, lend) or (sell, buy machines, raw materials, accumulate more stock, raise debt, manage cash flow, etc.).
Simulate and forecast multiple scenarios.
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How different players in finance can use this skill?
take a look at how entrepreneurs, business leaders, CFOs, bankers, consultants and private equity or VC investors use financial modeling.
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Assessing financial modeling fundamentals
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Guidelines for the appearance and structure of your model
In the previous section, I told you that the aim of financial modeling is to use an Excel file to clearly summarize a financial, operational or accounting situation.
In this session, we'll focus on the adverb "clearly" and the rules to follow to get the best Excel model.
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Transforming your model through simple actions
In this video, I'm going to show you how, by applying a few of the financial modeling rules I've presented, you can totally transform your income statement and quickly give your Excel document a much more professional look.
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Adjusting tab layout for improved clarity
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Modifying cell formats to enhance the model's presentation
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Taking a step back from the template approach
In the next few videos, I'm going to introduce you to each of the tabs of the financial model before we rebuild them together.
I'm going to present each tab 1 by 1. Their purpose, the role of each tab and an outline of their structure.
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Creating a clear and user-friendly multi-scenario financial model
Here we'll see how to structure our assumptions tab and, above all, how to create a multi-scenario Excel model with a single button.
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Creating a Sources & Uses table to provide an overview of the operation
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Building the debt tab, including debt schedule and interest calculations
This Excel tab alone is worth a course in financial modeling.
In our model, I gave you 2 debt tranches to practice with, and obviously, each of these tranches will have different characteristics.
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The main tab: Developing the Business Plan and calculating IRR
The Business Plan is a document (generally designed on Excel or Google sheet) that presents the company's financial forecasts over 3 to 5 years. Let's see how to build it.
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The business valuation tab: Determining company value
The company valuation tab will enable us to set the EBITDA multiple at which we will buy our company. We'll see in detail how this list of companies and the company's EBITDA will enable us to value our target.
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Assessing modeling standards
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Before starting: preparation and necessary steps
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Tab structure: how to efficiently organize the assumptions tab
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The basics of our multi-scenario model: understanding the concept and its import
The multi-scenario model, a must-have for finance and controlling models.
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The first assumptions of the model: initial input and data required
Here we complete the assumptions in our Excel file.
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Debt assumptions for Tranche A: specific assumptions regarding debt for TrancheA
Let's fill in the bank credit assumptions.
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Debt assumptions for Tranche B: specific assumptions regarding debt for TrancheB
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Multi-scenario assumptions: how to handle different scenarios in financial model
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A simple button to change the whole model: tips and tricks to simplify the model
Here's how to create a dynamic Excel template. A single button changes the entire template.
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Other assumptions of the business plan: additional assumptions to consider
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First assessment
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Applying the concepts and skills learned in the previous sections
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Study of our comparable companies: analyzing the sample of comparables
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Understanding the organization of the tabs related to business valuation
We turn to our company valuation tab and commence our financial valuation process. In doing this, we pay attention to the pitfalls that must be avoided.
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determining the criteria for selecting the most relevant comparables
How do you choose the best comparables for a company valuation exercise? That's what we'll be looking at in this video from the Financial Modeling course.
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showcasing the valuation results based on the transaction comparables method
Here we'll finish the exercise and see how to clearly present our company valuation.
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Understanding and choosing the appropriate valuation multiple for the model
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Construction of the Sources & Uses table
Let's build the Sources and Uses tab of our Excel model.
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Setting up the debt schedule and necessary calculations
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Understanding the calculation of interest on bank debt
Before modeling our debt, let's see how to calculate bank interest.
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Building the model for an amortizing debt tranche (1/2)
Let's model our first tranche of bank debt: the amortizing tranche.
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Building the model for an amortizing debt tranche (2/2)
Let's model our first tranche of bank debt: the amortizing tranche.
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Modeling the "bullet" debt tranche
let's model our second tranche of bank debt: the bullet tranche.
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Creating a comprehensive overview of the bank debt schedule
Let's build the bank debt summary table.
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Top line forecast: forecasting the company's revenue
We begin the financial modeling of the main tab: the Business Plan tab.
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Estimating operating expenses and EBITDA
We continue modeling the income statement, tackling operating expenses up to EBITDA.
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Determining EBIT and income before tax
We continue with D&A, EBIT and pre-tax income.
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Completing and fine-tuning the projected income statement
Here we see how to model corporate income tax. The P&L is completed by arriving at net income.
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Building the cash flow statement for future periods
Financial modeling in Excel with the cash flow statement.
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Analyzing the cash flow statement
Financial Analysis Video: We step back to examine this crucial financial statement. How can we analyze and interpret the cash flow statement?
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Determining the normative EBITDA based on model inputs
Let's calculate normative EBITDA and see how useful it is.
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Evaluating the net financial debt and leverage ratio
We now calculate the net financial debt. We'll then see how it can be used to obtain the Equity Value.
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The bridge from Enterprise Value to Equity Value
In this video, I show you how to move from Enterprise Value to Equity Value.
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Determining the CoC multiple and IRR for the investment
We're nearing the end of our Excel model. Here we calculate our investment performance indicators, in particular the IRR.
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Exploring the sensitivity of the IRR to different variables
After calculating our IRR, we sensitize it according to 2 major parameters of our exit valuation.
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Adjusting the model to achieve a desired target IRR
Let's move on to the next questions to see more Excel financial modeling techniques and tips.
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Modifying the EBITDA to achieve a specific target IRR
Final modeling video to conclude the model.
