Financial Modelling … What’s That?
Business modeling is a structured approach to decision analysis in order to understand the drivers (inputs) and outcomes (outputs). Typically it is done using Excel as this is a ubiquitous product.
How?
We use Excel to hold all the inputs of a decision and how they relate and calculate an output. For example you might be trying to decide how much money you need to save in order to buy a house in 3 years. The inputs would be your salary, % saving, interest rate on savings and deposit required for a house.
Why Is It Useful?
Many decisions we face regarding money are too complicated to do accurately on the back on an envelope. There are many inputs : Income assumptions, cost assumptions, tax assumptions, financing assumptions and timing assumptions. Additionally all of these are uncertain, in other words there is a range from minimum to maximum on each of these inputs. All of these impact the outcome and so have the potential to change the decision.
Using Excel to do the calculations in a structured way can give you greater clarity on which as the major drivers and which as the least important. This additional information enables you to focus you activity in the most value adding area and in the long term make better decisions.
Why Do I Need A Course?
If you have lots of input and lots of outputs and lots of decision critieria some models can get messy and difficult to use and difficult to change. We all know our bosses want to know about the impact of (a) on Monday and (b) on Tuesday and then (a) again on Wednesday. Woudn’t it be great if you knew all the tricks of the trade to enable you to manage this complexity so that all the analysis your boss is after is easier and more efficient to do. Your boss will be so impressed and your company will make better decisions and so make more money.
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