This is an excellent training material on developing financial models. This presentation includes the following content
1. Introduction
2. Model development process
3. Planning
4. Business logic design
5. Spreadsheet design
6. Data gathering
7. Testing and developing insight
8. Communicating
9. Managing & Coaching
10. Case excercise
11. Sample financial model (in excel)
This presentation combines several approaches to help you become a more effective engagement leader on financial modeling efforts.
• Perspectives on value of financial modeling for strategists
• Lessons learned shared with the group
• Advice for managing a financial modeling effort
A Sample business model Excel attached with this material
This document also delves into the critical qualities that define a well-developed financial model, emphasizing the importance of high-impact insights that drive strategic decisions. It categorizes the impact of financial models based on their ability to guide business improvements and strategic decisions, highlighting the conditions under which these models are most valuable. This approach ensures that the models are not just tools for analysis, but pivotal in shaping broad strategic directions.
The presentation outlines a comprehensive seven-step process for financial model development, starting from planning and analysis to managing and coaching. Each step is meticulously detailed, providing a clear roadmap for developing robust financial models. It stresses the importance of integrating business logic design and spreadsheet design with data gathering and testing, ensuring that the models are both accurate and insightful. This structured approach facilitates a thorough understanding of the business drivers and enhances decision-making capabilities.
Moreover, the document addresses common challenges in financial modeling, such as the difficulty in "selling" the need for models and the frequent oversight of their potential benefits. It offers practical advice on how to coach clients to recognize the value of financial models, thereby improving communication and decision-making. The inclusion of scenario-based models and sensitivity testing techniques, like tornado charts, further enriches the toolkit for financial analysts, making this presentation an indispensable resource for those aiming to excel in financial modeling.
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Source: Best Practices in Financial Modeling PowerPoint Slides: Dynamic Business Modeling PowerPoint (PPT) Presentation Slide Deck, Documents & Files
This PPT slide presents a Value Lever Analysis tailored for a food manufacturer, illustrating how various operational adjustments can lead to an increase in share price by $1. The central theme revolves around actionable insights that a CEO can leverage to enhance shareholder value.
The analysis is structured around several key value levers. The first lever focuses on increasing the Return on Invested Capital (ROIC) of the existing business, which is crucial for optimizing financial performance. Another lever emphasizes the importance of increasing the operating margin, which can be achieved through various strategies such as raising prices or increasing sales volume.
The slide also outlines specific areas where costs can be reduced, including Cost of Goods Sold (COGS), Selling, General and Administrative expenses (SGA), and advertising costs. Each of these adjustments has a corresponding percentage impact on the overall financials, providing a clear picture of potential outcomes.
Additionally, the analysis highlights the significance of asset management, suggesting that reducing fixed and net plant assets can lead to substantial improvements in financial metrics. The section on working capital management indicates that optimizing inventory and accounts payable can also contribute significantly to enhancing cash flow and overall financial health.
The right side of the slide summarizes the sustained changes needed in each lever to achieve the targeted share price increase, reinforcing the interconnectedness of these factors. This structured approach not only aids in identifying specific actions, but also provides a framework for prioritizing initiatives based on their potential impact on shareholder value.
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