A Career in Financial Modeling in India: An Overview
Every business requires a measure to assess how well it is functioning and growing. The main focus of financial modeling is creating simple and complex financial models to track a company’s growth and performance, thus allowing for smarter financial decisions. Financial modeling is important in ensuring efficient financial management of any business since it provides an overview of future expenses and income. As it becomes more widely used in various industries and businesses, there are multiple Financial modeling courses available for anyone interested in studying the intricacies of this process. People frequently ask, “Is Financial Modeling a Good Career option?” The answer is an unequivocal yes. In today’s competitive work environment, it is one of the top career options in Finance. This article goes into greater detail about different aspects of financial modeling, courses available, as well as how to pursue a successful career in financial modeling in India.
Importance of Financial Modeling
Numerical data expressed in rows, columns, and charts are more understandable and usable than verbose phrases. Thus, a Financial Model is a tabular representation of financial data for a firm or specific investment security or project. And Financial Modeling is the process of creating such models, analyzing them, and forecasting the results.
Financial models are the most straightforward approach to computing performance and express projected outcomes for your business. Depending on the model, they can advise you on the level of risk associated with implementing certain decisions. Financial models can also be used to create an effective financial statement that reflects the company’s finances and operations.
This is necessary when pitching investors, obtaining loans, or calculating insurance needs. The applications are nearly unlimited, but the basic premise is that they assist you to understand where your organization is now, how it has historically performed, and what to expect in the future.
Types of Financial Models for Financial Modeling
Financial models are used to assess a firm’s past or historical performance, measure it against competitors, or estimate/ forecast how the company will perform in the future. Credit analysis, ratio analysis, equity research, and investment banking are all terms used in finance. Let’s look at the major types of financial modeling.
To comprehend a company’s financial success, there are three key statements to consider.
Cash flow statement
Given an audited financial statement, we must create a financial model that connects all three statements. This model is used by banks and other financial institutions to assess the historical financial performance of their corporate borrowers.
Credit Rating Model:
This model is based on the three statement models, which are then extended to do three-to-five-year forecasts and integrate other criteria such as future demand growth in the industry, management strength and quality, collateral quality, existing loan account conduct, and so on.
A credit score is computed as a weighted average of the financial risk score, the management risk score, the business risk score, and the industry risk score. When a firm seeks a loan, the bank evaluates the company’s legitimate borrowing potential and the corresponding interest rate using this model.
Discounted Cash Flow (DCF) Model:
It is a valuation analysis approach that evaluates a company’s worth or value based on predicted future cash flow. Future cash flows must be discounted using a suitable discount rate (which is determined by the company’s capital structure and cost of capital) and then added together to calculate the valuation.
This model is used by investors to determine the true value of a start-up before investing and calculating the share to be purchased. Fundamental analysis is used by stock market investors to determine whether a firm is trading higher or lower than its actual value.
Leveraged Buyout (LBO) Model:
It is likewise a valuation analysis model, but unlike the DCF model, LBO takes into consideration significant debt financing. The goal here is threefold: to adjust the balance sheet for the debt-heavy capital structure, to arrive at an acceptable IRR (internal rate of return), and to arrive at an exit value based on the EV/EBITDA multiple.
When an acquirer company (usually a Private Equity firm) employs a considerable amount of debt to finance the acquisition cost, we must apply this model to evaluate the fair value and exit return of the company being bought, which may be private or public.
Merger and Acquisition (M&A) Model:
We must analyze M&A financing options (such as cash, stock, debt, and hybrid), share swap ratio, control premium, estimated synergy post-M&A, etc. An Investment Banking analyst will use this type of model to calculate the accretion/dilution when two companies decide to merge for potential synergies, increased market share, diversification, etc. or when a company decides to acquire another company.
Comparable Company Analysis (CCA) / Ratio Analysis:
An analyst must select a collection of comparable companies based on a company’s business profile (such as the location it operates in, product and service categories, target consumers, and so on) and financial profile (size of the company, top and bottom line, and so on).
The different types of financial ratios that can be employed across this group of companies are PE Multiple, EV/ EBITDA, P/B ratio (Price-to-Book value), etc. We must utilize CCA or Ratio analysis methods when we do not have enough data to analyze a firm or when we want to understand where a company stands in relation to its peer companies.
Option Pricing Model:
Professional options traders utilize these extremely complicated statistical models. To compute the theoretical value for specific options at a given time, these models take into account a few parameters whose values are known at the moment (e.g., underlying price, strike price, and days to the expiration of an option), as well as forecasts or assumptions on other parameters such as implied volatility.
These models are computationally intensive and employ advanced statistical techniques. To comprehend the value of their options, options traders use these models before taking positions on huge options and constantly recalibrating the value of the underlying options.
We can create different types of financial models based on the goal, requirement, and end-use, as stated above. The financial model’s complexity would vary depending on the situation.
Here is a Guide to Become a Certified Financial Modeler
What Are the Benefits of Learning Financial Modeling?
In today’s corporate world, financial modeling is one of the most in-demand skills. Almost all financial jobs in the corporate sector today require this expertise. Mastering it will provide you with countless opportunities. You can have a successful career in financial modeling in India.
- In recent years, financial modeling has emerged as a critical skill for advancing one’s career in finance. Most corporate finance professions demand knowledge of financial modeling, which means that knowing financial modeling opens up many career options for you. You can have a successful career in financial modeling In India
- Its versatility stems from the fact that it may help with any job responsibility engaged in analyzing a company. Because there aren’t many people who know how to develop a financial model, taking a specialized course will put you ahead of the competition.
- After completing the financial modeling course, candidates are hired by various research firms, banks, financial institutes, insurance firms, and credit rating agencies. Thus, data plays a crucial part in the corporate landscape, and the majority of firms today recognize the importance of data and have numerous openings for certified financial modelers’.
- Financial modeling skills are essential in today’s world, where content data reigns supreme. It is especially important if you intend to pursue a career in equity research, investment banking, venture capital, commercial banking, real estate, or other related fields.
- You will have a strong foundation because of your understanding of financial modeling.
- A financial modeling course will benefit anyone who wishes to put their theoretical knowledge into practice, and working professionals will gain an in-depth understanding and a competitive advantage by being able to contribute to and spearhead financial modeling projects. Thus enabling you to have a successful career in financial modeling in India.
Find here the best Financial Modeling Courses in India
Who Should Learn Financial Modeling?
You can learn financial modeling whether you’re trying to change careers get a promotion or start your own business. By learning this course you can have a successful career in financial modeling in India. The Financial Modeling course does not require any prerequisite qualifications.
However, due to the course’s complexity, students with a background in mathematics, statistics, economics, and finance will find it easier to grasp the concept of Financial Models. Financial modeling is a valuable skill to learn and should be considered by the vast majority of individuals such as
- Graduates or postgraduates, MBA aspirants, working professionals, investors, and entrepreneurs.
- The Financial Modeling course is for anyone interested in learning about finance and getting involved in financial decision-making.
- Financial Modeling is also suitable for individuals with a technical diploma or degree in technical qualification, such as B.Tech or Engineering, who wish to pursue a career in finance.
- The course can also benefit Business planners, strategy decision-makers, Bank Managers, equity researchers, project managers, research analysts, and others who work in the finance department of various businesses. Also, CA (Chartered Accountant), CFA (Chartered Financial Analyst), FRM (Financial Risk Manager), and other commerce graduates.
Scope of Financial Modeling
The Financial modeling course has become the baseline for all finance jobs. Don’t be on the fence about it. Job opportunities in this industry are many, particularly in a country like India, where the economy is expanding rapidly. One can have a successful career in financial modeling in India. The following are some of the most promising career opportunities in this field:
- Financial Analyst
- Business Analyst
- Corporate Finance
- Credit Analyst
- Junior Research Analyst
- Merger and Acquisition Associate
- Investment Banking Analyst or Associate
- Financial Planning and Analysis
- Equity Research Analyst or Associate
- Debt Syndication-Junior Executive
5 Best Institutes offering Financial Modeling Course in India
1. IIM Skills
IIM Skills is a global leader in skill development training. The institute offers substantial education and training programs in a variety of important fields. The career-oriented programs offered here are designed to fulfill the needs of students, new job seekers, homemakers, professionals, and freelancers.
These professional courses combine theory and practicals. IIM Skills’ job-oriented programs are industry-relevant. The curriculum for these course programs has been developed after extensive research to assist students in upskilling with the best education possible. If you learn this course, you can have a successful career in financial modeling in India.
The Financial Modeling Course includes practical projects, hands-on learning, a dedicated placement cell, and job interview preparation. The tool-based experiential learning course is led by experienced experts via live classes and recordings. The educational program provides learners with a globally recognized certification from IIM Skills.
It also provides lifetime access to resource materials and recordings in a Learning Management System that is continually updated. The course introduces students to sophisticated industry tools such as advanced Excel and PowerPoint.
- Digital Marketing Course
- Content Writing Course
- Technical Writing Course
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- SEO Course
EduPristine is a member of Adtalem Global Education, an international education provider based in the United States. As financial modeling is one of the most important and in-demand talents in the finance industry. EduPristine and BSE Institute have collaborated and designed an Advanced Financial Modeling course to comprehensively train students in Financial Model creation.
It provides real-world challenges, encouraging students to apply classroom concepts and prepare for career realities. This course will prepare you for a successful career in financial modeling in India. The EduPristine Financial Modeling course will teach you everything you need to know about MS Excel, from the basics to developing effective financial models, and you’ll be able to build models on your own by the end of the Course.
EduPristine is dedicated to assisting you at every step of the way by providing practical and experiential learning opportunities. You will get Financial Modeling certification from BSE Institute, the course is offered both online and in a classroom setting. EduPristine’s career services assist students to build their confidence and find the right career opportunities in their desired field through soft skills training, resume building training, and other skill enhancing training.
Recommended Read: Financial Modeling Courses in Mumbai
The EY Virtual Academy’s financial modeling certification course is designed to cover all the key topics of financial modeling. A team of senior executives from EY Global member firms and industry experts with vast experience in financial modeling and valuation for diverse sectors designed the program.
Financial modeling skills are among the most sought-after in the financial world. The course trains students to create efficient, robust, and flexible financial models. They can use these models to report and analyze historical data, make future projections, and provide integrated financial statements, important financial ratios, and outputs in a logical, concise, and effective manner.
This course will enable you to have a successful career in financial modeling in India. The course uses examples specifically designed to explain other approaches to computing important financial parameters to assist applicants to comprehend and apply these skills. The program also covers the fundamentals of business valuation, valuation methods, and interpreting valuation results.
The lessons learned from these demonstrations and examples will be supplemented with a comprehensive case study that covers all of the modules. Candidates should be able to create well-structured, robust, and dynamic financial models to do independent business valuations after completing the course. Students will get a “Certificate of Completion” from EY at the end of the program.
4. Corporate Finance Institute (CFI)
CFI is the world’s largest and most well-known platform for finance training, certification, and skill development. CFI provides the leading resource for finance professionals worldwide, including productivity tools, certification, and online training for financial modeling, thanks to top instructors, innovative curriculum designers, and proprietary technology.
A well-rounded skill set and skill competency are required of modern financial professionals and aspiring professionals. With the goal of assisting anyone in becoming a world-class financial expert, they blend theory, application, productivity, and intuitive abilities into a condensed, self-paced program that can be completed at any time and from any location.
They continue where a business school ends, teaching you real-world, on-the-job components of corporate finance. If you learn this course, you can have a successful career in financial modeling in India. The Financial Modeling & Valuation Analyst (FMVA) Certification program at CFI will teach you the essential skills needed for practical financial analysis.
Today, financial models are an important element of the decision-making process in the finance industry. Students learn the best method to structure their models to inspire confidence in the stakeholders engaged in the decision-making process by following their recommended financial modeling courses.
The course can help you master financial modeling abilities, streamline a budgeting and forecasting process, or increase your overall accounting and finance proficiency. The FMVA certification gives all of the necessary abilities, tools, and techniques to become a world-class financial expert. As a result, you will be able to pursue a successful career in financial modeling in India.
Recommended Read: Financial Modeling Courses in Pune
5. Henry Harvin
The Henry Harvin Finance Academy is a well-known institute that teaches professional skills through a hands-on approach. Its mission is to create value by teaching skills-based courses by industry experts from various sectors. The curriculum of Henry Harvin’s Financial Modeling Professional Course is customized and focused on the industry’s current and anticipated needs.
The course has been well-designed by subject matter experts and is tailored to make you ‘Industry ready’ to face the challenges at the workplace. This course will enable you to have a successful career in India. Learn the most in-demand prerequisites for Finance Professionals and master the core skills in all Finance fields.
The curriculum comprises six modules, two case studies, and two complementary modules. This training module teaches advanced financial techniques, financial reporting mechanics, a thorough understanding of income statements, balance sheets, and cash flow statements, the application of financial statements and ratio analysis, and much more.
Henry Harvin offers a 9-in-1 course, as well as 100% placement support for one year after successful completion of the course. The learners will receive a certificate for the Financial Modeling Professional Course, which is recognized globally. As a result, you will be able to pursue a successful career in financial modeling in India.
1. Is it possible to learn financial modeling on my own?
Yes, it is possible to study financial modeling without any formal course. You will, however, need more time and effort than simply enrolling in a course. It takes more effort to learn financial modeling on your own. While there are free tutorials accessible on advanced Excel and accounting, you’ll usually have to do some digging to discover valuable videos or resources, and it can be tough to layer skills as you learn. With well-prepared curriculums, online courses simplify the process. Each class will build on the previous one to help you grow, and it will teach how to generate Excel spreadsheets and use real-world case studies. Online financial modeling courses not only make learning the concepts faster and easier, but they also typically come with a certificate of completion and placement assistance from most Institutes.
2. What is the average salary in India for financial modeling skills?
In India, the average income for individuals with financial modeling skills ranges between 5-12 lakhs per year, depending on the position. The amount grows as you gain experience.
3. Is a certification in financial modeling worthwhile?
There is a certain gap between theoretical concepts taught in universities and the practical knowledge that employers are looking for in candidates. The financial modeling course is created by industry professionals and includes numerous real-world case studies to help bridge the gap. Furthermore, the certification might help you stand out in the hiring process and boost your earning potential. Equity research firms, investment banks, project finance firms, accountancy firms, and credit rating agencies are continuously looking for financial modeling professionals. As a result, obtaining a certification in financial modeling is worthwhile.
Financial modeling is a promising field of finance. With globalization and increased competition, every corporation and investor is attempting to gain a competitive advantage. Financial modeling facilitates the easy monitoring of corporate data. Financial modeling has become a necessity for financial professionals to meet the current demand. It’s nice to be on top of your game, one step ahead of others. If that is your objective, then studying financial modeling is essential for advancing your career in finance. It can jumpstart your career in incredible ways.
It is beneficial to understand the concepts and tools required to gain an advantage in today’s ultra-competitive job market. Financial modeling is one of the most in-demand skills in today’s business environment, where demand exceeds supply. Yes, financial modeling, like other specialized skills, requires expert training and direction. This leads to the study of financial modeling through various well-established courses. The above list includes information on financial modeling as well as the 5 best institutes that offer the course. In today’s scenario, it is preferable to choose a course that takes into account the industry’s future needs and expectations of financial modeling professionals. After all, having in-depth knowledge and confidence will help you to make a cut above the rest.