CERTIFIED FINANCIAL MODELING MASTERCLASSTMCERTIFIED FINANCIAL MODELING MASTERCLASSTM

Certified by the international Academy of Business and Financial Management (IABFM)Recognised in over 145 countries by 560 training providers, universities, colleges and business schools.

CFMTM

Who should attend?

This highly practical qualification has been specifically designed for: 9 Directors & Senior Managers

9 Financial Controllers & Managers

9 Financial, Business & Investment Analysts

9 Strategic, Business & Financial Planners

9 Risk & Treasury Professionals

9 Accountants

9 Middle Office Staff

9 Commercial Managers

9 Commercial Bankers

9 Portfolio Managers

9 Model Auditors

9 Company Controllers

9 Insolvency Professionals

9 Corporate Valuation Specialists

9 Project Finance Professionals

9 Economists & Quants

9 Transaction Advisors

9 Business Development Managers

9 Marketing Managers

By attending this practical and informative course, you will be able to:

9 Improve your skills in financial analysis techniques

9 Identify your applicability to assess the financial health of your organization

9 Understand how to interpret financial statements

9 Understand the complete range of techniques used in forecasting and projecting financial statements and managing them

9 Learn the most effective ways to design and structure your financial models

9 Analyze cutting edge techniques for estimating cost of capital and capital budgeting

9 Develop skills and an appreciation of shareholder value and its contemporary application to corporate performance

9 Enable management to make truly uniformed decisions

9 Become a Certified Financial Modeler

Course Overview and Objective

Certified Financial Modeling (CFM) Masterclass is a highly interactive course designed to teach a practical understanding of effective financial modeling. The course covers 20 major subject areas and utilises a variety of training techniques. Through real-life case studies, the emphasis will be on practical and pragmatic approaches.

The course has been designed to strengthen model structuring skills. By adopting a structured design strategy, better models can be developed in less time and with greater accuracy – thus streamlining processes, enabling sound decision and increasing profits!

CFMTM Course OutlineCFMTM Course OutlineDay TwoModeling Applications Effective Design of a Financial Model

y Basic Principles y Elements of financial models y inputs and outputs y financial statements y schedules Suggested framework y Key modeling tips

Principles of Risk and Return y Volatility y Capital structures y Weighted Average Cost of Capital (WACC)

Forecasting y Approaches to forecasting y Analysing historical data to identify components y Long-term trends y Cyclical variations y Seasonal variations y Random variations y Introduction to modeling time series analysis

Exercise: Participants will use historical data for a company to prepare a revenue forecast

Forecasting Financial Statements y The fundamentals of using sound judgment y Forecasting the income statement y Forecasting the balance sheet y Forecasting the cash flow statement y Evaluation of the reliability of forecasts y Exercise: Participants will be provided with historical

company data from which they will model the forecasting of financial statements.

Cost-Volume-Profit (CVP) Analysis y Determining fixed and variable costs y Calculating break-even point y Constructing CVP graph

Exercise: Using a pre-built model, participants will calculate the break-even point for sales, and then construct a CVP graph.

CFMTM

Day One

Spreadsheet Design Principles What is a Financial Model?

y Differentiate versus financial statements

y Differentiate versus business models

y Differentiate versus business cases

y Various definitions

Review of Spreadsheet Building Concepts y Importance of good spreadsheet building habits

y Types of spreadsheet errors

y Practices to detect and prevent spreadsheet errors

y Seven good spreadsheet building habits

Exercise: Participants will be provided with a rudimentary spreadsheet which is designed for preparing a Profit and Loss account. They will examine the spreadsheet to identify and correct any errors.

Exploring Functions in a Spreadsheet Model

y General Format and use

y Selected financial functions

y Selected statistical functions

y VLOOKUP and other logical functions

Exercise: Participants will be provided with a template that uses a number of Excel functions.

Sensitivity Analysis

y What is sensitivity analysis?

y How is it performed?

y “Add-in” products available

Exercise: Participants will perform a sensitivity analysis on a spreadsheet model and create a sensitivity diagram.

CFMTM

Day ThreeThe Principles of Corporate Finance

Cost of Capital y The time value of money concept

y How to calculate future values

y Concepts of the cost of capital

y Calculating the Weighted Average Cost of Capital (WACC)

y Cost of debt (various elements of debt and how to calculate)

y Cost of equity

y Using then WACC in financial models

Project Appraisal and Decision Making y The principal of Discounted Cash Flow techniques

y Alternative methods of project evaluation

y Why use cash flows

y Identification of relevant cash flows (revenues and costs)

y Calculating project returns

y Understanding the nature of risk and its effect

y Building risk into a project appraisal Exercise: Participants will be provided with case studies relating to a number of Middle East companies where they will able to model the cash flows, calculate the appropriate discounting factor, and calculate the expected return.

Optimisation Techniques in Financial Modeling y Elements of optimization techniques

y Understanding and using linear programming

y Using the Solver facility in Excel to solve linear programming problems

Exercise: Participants will use linear programming and the Solver facility in Excel to solve a problem of resource allocation between competing projects with different rates of return and different risk characteristics.

Day FourThe Principles of Business Valuation. An Art or a Science?

y Why value a company? y What methods are commonly used for M & A and in what circumstances?

* Market value * Asset/book value * P/E ratio based valuations * Valuation using comparables and other multiples

Exercise: Participants will be provided with a case study company which they will use to establish the value of a company using a number of different approaches.

Free Cash Flow and Business Valuation

y Why is free cash flow important – the Warren Buffet approach?

y How is FCF calculated from the financial statements? Two simple approaches

y FCFF and FCFE

y Using forward FCF estimates to value a business

Exercise: Participants will be provided with a valuation template which they will use to model the FCF of two separate businesses in order to derive an enterprise value and then test a number of different scenarios.

Other Practical Applications – Leasing

y What are the different types of leases and what are the advantages, including taxation implications?

y Lessees and lessors

y Developing a model comparing the lease versus buy option from the lessee’s perspective

y Developing a model from the lessor’s perspective

y Practical problems associated with leveraged leases.

Exercise: Participants will be given a lease proposal for which they will need to design and develop an appropriate model to decide the best option from purchasing, leasing or borrowing to fund the asset.

Value at risk (VaR) - Extended Risk Analysis

y What is VaR – example based upon a credit portfolio?

y Why has VaR become the accepted methodology for assessing risk?

y Can it be applied to all risks?

y Has VaR performed successfully in 2008-9?

y Can it be applied in periods of stress?

y Using Excel to calculate VaR

Exercise: Participants will be asked to calculate the VaR of a range of assets in a diversified asset portfolio

CFMTM Course OutlineCFMTM Course Outline

Day FiveMonte Carlo Simulation, Macros, and User-Defined Functions Introduction to Spreadsheet Macros y Understanding the nature of macros

y Using the Excel macro recorder to create macros

y Editing and enhancing recorded macros

y Identifying and correcting errors in macros

y Attaching macros to command buttons

Exercise: Participants will create a simple macro and attach the macro to a command button. They will then examine a prewritten macro that is not operating as intended. They will use the facilities of Excel to debug and attempt to correct the error(s) as appropriate.

Monte Carlo Simulation y The nature and uses of simulation techniques

y The way Monte Carlo Simulation works

y Reviewing statistical measures and how to calculate them

y Mean, variance, standard deviation

y Probability distributions and the normal distribution

y Running a simulation and interpreting results

y Exploration of a basic program to perform Monte Carlo Simulation

CFM Examination*

*Only those who successfully complete the exam will receive the Certified Financial

CFMTM Course OutlineCFMTM Course Outline

Financial Model Auditing/Review y Why audit?

y Excel’s auditing tools

y Automated testing tools: role, purpose and limitations

y Demonstration

y Model documentation

Automated Model Generation Tools y Overview: purpose, advantages, disadvantages

y Demonstration