7 Financial Models for Analysts, Investors and Finance Professionals

Theory and practical tools to help investors analyse businesses using Excel

Paul Lower

• Publisher: Harriman House
• Year: 2019
• ISBN:
  9780857195777
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Finanzbuchhaltung

Financial models in Excel allow investment analysts and other finance professionals to take the laborious number crunching out of financial analysis and forecasting. Models help them to gain meaningful insights into the way that a business is working and focus attention on areas to improve bottom-line results. They can also be used as powerful tools to test the potential impact of various risks on business performance.In this brand new guide, financial modelling expert Paul Lower presents step-by-step instructions for seven spreadsheet models that will help the user to gain a better understanding of the financial data coming out of a business.These seven models can be used to:1. Assess how a business is performing on key financial indicators.2. Produce sales and cost forecasts.3. Create a cash flow forecast.4. Understand the impact of product price changes on profitability.5. Assess potential investment decisions.6. Check the sensitivity of key financial measures to risk events.7. Produce a business valuation.The book also includes downloadable spreadsheets of the author's original Excel models and introductory chapters about best practice when modelling in Excel.With this suite of seven tools, a financial analyst will be equipped to use Excel to achieve a deep understanding of a business and its financial data.

Preface

The 1970s was a decade of profound change. The oil price increase that resulted from regional conflicts in the Middle East and the formation of the Organisation of Petroleum Exporting Countries (OPEC) ushered in a period of stagnating economic growth and high levels of price inflation (stagflation), breaking what had been a sustained period of post-war prosperity in the developed economies. Another significant change in the closing years of that decade was the early-stage development of personal computers that would eventually kill off the expensive mainframe and mini computers then in use in the largest companies.

In 1978, I was working as a Management Accountant for a company that used computing technology spun-off from the US space programme to produce high-quality analysis of the seismic data coming out of the geophysical exploration for oil. I arrived at the office reception area one day to find a dozen large boxes each emblazoned with a large graphic of an apple. The finance department was allocated one of the Apple II computers that had been shipped in these boxes. The Regional CEO had ordered the machines and when we asked him what he wanted us to do with ours, he told us that he had no idea, but he expected that we would think of something. Some of the more adventurous finance team members clubbed together and bought a book on programming in BASIC (one of the earliest programming languages) and we took our first fumbling steps in using computers to do the basic numerical grunt work that was still been done by...