using financial modelling excel to make the right choices
TRANSCRIPT
http://www.accessanalytic.com.au/
Using Financial Modelling Excel To Make The Right Choices
Businesses come, and businesses go in today's economy. Any individual that owns a business
knows how important it is to make the right decisions, especially when money is involved. Taking
financial risks can either lead to mass earnings or bankruptcy. A solution like financial modelling
excel, can help businesses make the right choices.
When one speaks of financial modeling, they are speaking of a complete program that helps
individuals come to a decision in regards to
investing in a company. It is a mathematical model
that helps determines the future progress of a
company, financial asset, or investment.
Sure, this can generally be done on paper if one
likes to spend time making countless changes and
has the time to do so. There is another option,
which is to do it in excel. Many have stated that it
offers the calculated speed and accuracy that they
need to come to the right decision.
The question often arises to who needs financial
modeling. Well it's quite simple. It is for the
individual deals with decision making in regards to
money.
Those that are involved in decision planning in the corporate arena will definitely need some type
of model. It is a definite for bankers, those that research equity, and those that are heavily
involved in investments.
There are some steps that are required to get started, with the main one being collecting data.
Information in regards to growth, revenue, and investments is a good place to start. Many people
in corporate America generally believe that their ideas are out of this world and is going to
generate massive amounts of money. However, if an individual was a banker, he would evaluate
the business to see if it would make sense.
One question would be if the projection of revenue is greater than the market size.
If everything makes sense and is reasonable, it's time to dig a little deeper. This is where the
model would come into play. One must think of a structure of analysis. If more cash is generated
from the operation of the business, the business will be better for it. The key concept is money
generated today, is always better than money that can be generated tomorrow.
http://www.accessanalytic.com.au/
As an individual starts putting these
numbers into excel, one must determine
a layout for the financial model.
Individuals need to determine how much
information the model will have. If it's
too large, than multiple sheets may need
to be used. Looking at the assumptions
the model will make is also key. If
readability is important, separate
headers may want to be used for assumptions and calculations. Different fonts may also help with
readability as well.
The creation of logical modules for the model will also be helpful. Be sure to keep balance sheets,
P&L, and cash flow statements separate. It is also important to keep the revenue generation
separate from costs in P&L. It may also be helpful to learn a few shortcuts when dealing with tons
of information. It will keep the project exciting and cut down on boredom. Financial modelling
excel is definitely the first step in making the right choices when it comes to money.
Company Name : Access Analytic Solutions Pty Ltd
Address : Suite 143, Level 1, 580 Hay Street Perth, WA 6000 Australia
Phone Number : 08 6210 8500 (within Australia) or +61 8 6210 8500 (from overseas)
Website : http://www.accessanalytic.com.au/