Financial Modelling Masterclass

This course provides an introduction to building integrated three statement corporate forecasting models in Microsoft Excel.

Participants will put together a model for a simple invented company in a series of steps, showing how to link the Income Statement, Balance Sheet and Cash Flow Statement and to create schedules for debt, PP&E, working capital and equity.

The course demonstrates how to integrate a revolving facility to help balance the model and how to deal with circularity caused by including interest in the model. Excel best practice and power user tips are integrated through the modules of the course.


This course is suitable for anyone new to Financial Modelling.

Learning Outcomes

  • What historic data is needed and why
  • How to make the key assumptions that will drive the model
  • Formatting best practice
  • List a variety of revenue streams for banks
  • Examine some of these sources of money
  • Summarise the changing business model for banks
  • How to simplify the historic statements to focus on key accounts
  • How to link schedules to the balance sheet and income statement
  • Why you don’t need to include the historic cash flow statement
  • Why top-line growth is a key assumption
  • How to use EBITDA or EBIT margin as a key driver
  • How to model COGS, depreciation and SG&A
  • Why we ignore interest at this stage of the model
  • How to model the tax expense line
  • How to identify lines that don’t need to be modelled
  • How to plug in the AFS, goodwill and pension lines
  • How to set out a non-current assets schedule for PP&E and intangibles
  • How to model the drivers for these accounts
  • How to include a BASE table for retained profits
  • How to set out an operating working capital schedule
  • How to forecast receivables, inventory and payables
  • How to calculate net OWC and change in OWC
  • How to set out a simple debt schedule
  • How to model non-material ‘other’ accounts
  • How to add share of net profit to the income statement
  • How to show share of NAV in the balance sheet
  • How to deduct share of net profit in the income statement
  • How to show share of NAV in the balance sheet
  • Which cash flows should be included in CFO
  • How to calculate the relevant cash flows, getting the sign right every time
  • How to link the CFI to the non-current assets schedule
  • How to incorporate proceeds of disposals and associate dividends
  • How to include dividends in the CFF
  • How to add a conditionally formatted balance check to the balance sheet
  • How to add debt and cash to the balance sheet
  • How to decide the minimum cash float needed
  • How to calculate the cash flow available to repay debt
  • How to add a revolving facility
  • How to link the revolver into the balance sheet and cash flow statement
  • How to add interest calculations for circular and non-circular models
  • Why we add a circularity switch
  • How to add a circularity switch in Excel
  • Enabling iteration
  • How to use a fixed/ sticky/ variable cost approach to drive EBIT
  • Assessing the effect on operational leverage
  • How to add ‘management’, ‘bank base’ and ‘stressed’ scenarios using =CHOOSE()
  • How to include key outputs panel next to the scenario choice switch for ease of use
  • Add key ratio calculations to assess the performance of the business

Course Content

Unit 1 – Setting up a cop

Unit 2 – Good Excel practice and circularity

Unit 3 – Entering historical data and simplifying the balance sheet

Unit 4 – Income statement – above the line

Unit 5 – Income statement – below the line

Unit 6 – Balance sheet accounts that don’t change

Unit 7 – Balance sheet – calculations for PP&E and retained profit

Unit 8 – Balance sheet – operating working capital

Unit 9 – Balance sheet – long-term debt, ‘other’ assets & liabilities

Unit 10 – Balance and joint ventures

Unit 11 – Non-controlling interests

Unit 12 – Cash flow statement – operating cash flows

Unit 13 – Investing cash flows and financing cash flows

Unit 14 – Balancing the balance sheet

Unit 15 – Cash available to repay debt

Unit 16 – Adding a revolving facility

Unit 17 – Interest calculations

Unit 18 – Circularity switch

Unit 19 – Fixed and variable costs

Unit 20 – Scenario analysis

Unit 21 – Ratio analysis

This Course Includes

  • Learn: 21 micro-learning on-demand videos
  • Apply: 21 hands-on practical exercises and projects
  • Requirements: Access to a computer with an internet connection
  • Accessibility: Access on PC, mobile or TV
  • Certification: Certificate of completion with CPD record


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Why study with Alpha?

Innovation and creativity born from experience

We are thought leaders in instructional and learning journey design and holistic solution architects. We have extensive finance and investments experience combined with skills application to deliver performance improving results. We develop immersive learning environments that maximize time to productivity, support talent retention and added value to improving quality of hires.

Knowledge Exchange Evangelists

We are focused on mining the embedded organisational intellectual capital for the benefit of the next generation. We create and curate best in class practice gathered from our experience with the leading financial institutions. We design our programmes with the end in mind – what results are you trying to achieve with this intervention? What metrics will we set ourselves to achieve that?

Generation Proof

Quality and innovation, using current market and industry best practices, have made us a trusted partner in delivering dynamic and motivating training for the financial and capital markets. Our programmes are generation proof and responsive to evolving learner needs and styles. Our solutions use a multi-stakeholder engagement strategy that expands beyond relationships between the learner and learning provider. We create connections with managers, peers and the wider business to drive impactful return on investment..

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