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About the Course:
Financial Modeling requires great skills in Practical
Finance, MS-Excel and Business / Industry analysis. This course is
one-step-solution which precisely covers all these areas and trains you
to build spreadsheet based projections from a blank worksheet.
So, if you are an entrepreneur preparing a business plan
for your potential investors or just a graduate dreaming to work as an
analyst at an Investment Bank, this is the program for you!
This entire Curriculum is divided into 3 different Courses
You are viewing Learn Financial Modeling from Scratch - Part 3
Learning materials include
Course Facilitator (Faculty):
The course is facilitated by Ashutosh Zawar, who is a
rank-holder Chartered Accountant and a Bachelor of Commerce from
University of Pune, India. He is a Co-Founder & Lead Trainer @
Academy of Financial Training. He has over 9 years of experience across
Investment Banking, Project Finance, Consulting and Training.
Ashutosh has over 1,000 hours of professional training experience.
He looks after the e-learning, multimedia content management at Academy
of Financial Training (AFT). He has been instrumental in launching
AFT's new training programs and innovating curriculum across topics such
as Advanced Financial Modeling, Excel, Banking, Corporate Finance.
Before co-founding AFT, he worked with the Project Finance
team at IDFC, a leading financial services company in the Infrastructure
domain and the Investment Banking team at Morgan Stanley. he has worked
on sectors such as healthcare, education, tourism, telecom and energy.
His work profile included operational and financial modeling, business
appraisal, valuation analysis, drafting of terms and commercial
The entire 3 part course takes about 8-10 hours of video-based
learning and 20-30 hours of simultaneous self-practice on MS Excel.
Structure of the Course:
Why take this Course?
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30 day money back guarantee.
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Certificate of completion.
|Section 1: Introduction|
Greetings from Academy of Financial Training (AFT)!!!.
Thank you for choosing AFT for learning Financial Modeling.
This Course is a follow up on the Learn Financial Modeling from Scratch - Part 1 & Part 2 of the Course. Please make sure to check out Part 1 & Part 2 of the Course before you begin with Learn Financial Modeling from Scratch Part 3. Please ignore if already subscribed
Our first video gives you a brief introduction to AFT's 'Learn Financial Modeling From Scratch' Program. Importantly, it guides you to important tools & features of the program that you can use to get a seamless learning experience of the Program.
Wish you All the best & Happy Modeling!!!!
|Section 2: Forecasting Calculations - Taking Stock and Completing Pending Elements|
In this session, we discuss the simplistic way of completing the tax
This method represents a crude and simplistic alternative to creating a
Here, we go through the 3 Financial Statements and note the line
In the Income Statement, the items include Interest Expense and
In the Balance Sheet, Assets side, the items include Cash & Cash
In the Cash Flow statement, the pending calculations include calculation of the Closing Cash balance.
In absence of information on some line items, they are assumed to be equal to previous year.
In this Session, we link some of the line items in the Balance Sheet and complete their forecasts.
These include Term Loan, Deferred Tax liabilities, Capital Lease,
We create a detailed calculation below the PAT Line inside the Income
|Section 3: Specialized Calculations - Cash Balancing Mechanism I|
In this Session, we prepare the schedules for Promoter Loans and Short
We complete the calculations of interest expense, or interest income
We continue to adhere to the Financial Modeling Best Practices i.e.
In this Session, we complete the specialized calculation for Working Capital Finance and Interest thereon.
We understand in detail the concept of Working Capital and funding for
The session ends with total interest calculation and linking of the same into the Income Statement.
We have a useful discussion on how availing additional working capital
Quiz on Specialized Calculations - Cash Balancing Mechanism I
|Section 4: Specialized Calculations - Cash Balancing Mechanism II|
In this Session, we calculate the Closing Cash Balance in our Cash Flow statement and link it into the Balance Sheet.
At the end, we have a balanced Balance Sheet, where
We simulate a negative cash situation by deliberately creating a loss
In this Session, we understand in detail the Negative and Surplus Cash
In real life, the surplus cash is invested by a prudent businessman.
Actual impact of these situations is considered in the Model through our subsequent sessions.
In this Session, we take the first steps in our entire Cash Balancing Mechanism.
From the overall cash available, we reduce the cash flow which will be
After this, we provide for the two possible situations i.e. What if the cash flow post this stage is negative or positive?
In this session, we complete one part of the Cash Balancing Mechanism i.e. How to raise funds in a negative cash situation?
Here, we discuss the order in which funds shall be raised. First, we
We calculate the relevant amounts (disposal of ST Investments,
This calculation creates a circular loop in our model. The session
We have some Quick Excel Tips which allow to create shorter formulas.
|In this session, we complete the remaining part of the Cash Balancing
Mechanism i.e. How to deal with a surplus cash situation? How to utilize
Here, we discuss the order in which funds shall be utilized. First, we
repay the high-cost promoter loans to the maximum extent possible. If
there is still any surplus cash left, then we invest it in Short Term
We calculate the relevant amounts (repayment of Promoter loans and
additions to ST Investments) and link them into the respective
schedules. We also link the Minimum Cash balance into the Balance Sheet.
The target is to forecast a balanced Balance Sheet with Total of Assets
= Total of Liabilities and Equity. The session ends with the summary of
entire Cash balancing mechanism.
The signs are extremely important here. The repayment of Promoter
loans, additions to ST investments result in a cash outflow and have to
be shown accordingly in the Cash Flow Statement.
Quiz on Specialized Calculations - Cash Balancing Mechanism II
|Section 5: Addressing Circularity Issues|
In this Session, we understand in detail, why circular calculations
We simulate the situation by creating an artificial error in our
This process of recovering the model in case of break-down is lengthy and tedious. It
To build a robust model, in our next session, we introduce a switch
When tracing the errors, we have used the keyboard shortcuts for
In this session, we create a Circularity Switch in the Dashboard using CHOOSE function.
For this, we have identify the cells which cause circularity right at
We have to use the CHOOSE function in all these cells such that
Later, when the model breaks down for any reason, after correcting the
This ONE step at the time of building, makes the model highly Robust and can save lot of time later.
When tracing the errors, we have used the keyboard shortcuts for
|Section 6: Forecasting of Items Below the PAT Line|
In this session, we forecast the dividends for our projection period.
Based on the historical trends, we forecast the dividends and link the same in the Income Statement & Balance Sheet.
|Section 7: Specialized Calculations - Income Tax|
In this session, we build a separate calculation schedule for Taxable
Taxable income is different from Profit before Tax (Book Profit or
We set-up the Taxable Profits Calculation. Starting with PBT, we add
We conclude this session by calculating the Taxable Profits post set-off and Corporate Income Tax based on the same.
In this session, we start building the Minimum Alternate Tax (MAT) calculations schedule.
We introduce the concept of MAT and explain the rationale for adopting
We conclude the session with calculation of MAT based on book profits.
In this session, we build the Minimum Alternate Tax (MAT) credits sub-schedule.
We introduce the concept of MAT Credits and how they can be utilized
The MAT credits schedule includes additions, utilization and expiry
We build this schedule and will be forecasting each of the line items in the coming sessions.
In this session, we calculate the additions to MAT Credits and utilization of the same.
In any year, if MAT payable is more than the Corporate Income Tax, the additions to MAT credits are made. They are equal to excess of MAT over Corporate Income Tax.
MAT credits are utilized when Corporate Income Tax is more than
For calculating utilization, we compare the opening balance of MAT
In this session, we conclude the MAT credit sub-schedule with
If such old additions are not fully utilized over last 5 years, then
After completion of MAT schedule, we calculate the Actual tax payable.
We also calculate the deferred tax liability and link it across all the
Specialized Calculations - Income Tax
|Section 8: Special Adjustments|
In this session, we introduce and explain the concept of Negative Arbitrage.
In our existing financial model, we are using the surplus cash to repay
Hence, in this session, we adjust our schedule for utilization of
In a real-life situation, the decision to invest is made based on the
Thus, by including this adjustment, we bring our model closer to real-life situation and practice of prudence.
|Section 9: Conclusion|
This is the final session with an overview of finished version of the
Further, we also explore how additional analyses can be performed on
With that we conclude AFT's 'Learn Financial Modeling From Scratch' Program.
Once again, thank you for choosing AFT. We hope to continue the sharing of knowledge with more programs.
Academy of Financial Training is engaged in providing niche financial trainings to companies, educational bodies and individuals. We have been in operation since ~4 years and have trained 5,000+ candidates and have a range of marquee MNC/corporate clients including companies like GE, Hewlett-Packard, Genpact, Canon, Deutsche Bank, IL&FS, Essar Steel, amongst others. Our strength has been the robust financial training content based on years of research backed by effective delivery provided by trainers with rich work experience in the domain.