A Practical Guide to Financial Modeling Course
As businesses across the world constantly evolve, grow and merge the importance of estimating future returns and drawing up plausible scenarios becomes a critical component in decision making. This process of creating a summary of earnings and returns to estimate the outcome of a future event and/or decision(s) is called financial modeling.
Financial modeling as a skill set is important for anyone desiring to make a career in finance. Its application primarily is in the accounting, corporate finance, or quantitative finance domain.
Financial Modeling
Financial models are mathematical models (usually created on excel sheets) which can help to perform financial statement analysis and make appropriate decisions for business sustainability. Broadly, financial modeling requires analysis of historical financial data of a company, the results of which are then used to determine company valuations, creditworthiness, and/or stock prices.
It empowers the making of informed decisions backed by data. Entrepreneurs, finance, and even marketing professionals will benefit from building financial modeling scenarios for making new bids, proposing sale decisions, or estimating financial returns over a specified time period.
With varied applications across Investment Banking, Equity Research, Project Finance, Credit Rating, Mutual Funds, and Corporate Finance there is an increasing requirement for skilled professionals acquainted with financial modeling. The top Fortune 2000 companies, financial institutions, and technology companies hire experts with experience and background in financial modeling.
Optimize your finance careers with these in-demand financial modeling skills. To acquire these skills under expert guidance, enroll in our full-fledged Financial Modeling Course.
Types of Financial Models
A variety of financial models are available to choose from depending on the purpose and requirements. The various models can address different types of business scenarios. While the predominant models are focused on valuation, some are created to calculate and predict risk, portfolio performance, or economic trends within sectors. Some examples of financial models are given below:
Project Finance
Feasibility evaluation of infrastructure projects is usually assessed using project finance models which assist in determining the capital requirements and project structure. While the output for a project finance model is uniform and based on standard rules and accounting principles the input varies on a project-specific basis.
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Pricing Models
These models are built to determine the price to be charged for a product. Price is a key factor in the overall marketing strategy for products and services. The input price includes the cost of production while the final price includes a profit component. If the cost of production serves as a benchmark for the lower limit the upper limit is set by consumer perception about the product/service and other factors including competition, demand, etc.
Integrated Financial Statements Model
These are also known as a three-way financial model as they comprise three kinds of financial statements – a) Income statement or profit and loss (P&L) statement, b) Cash flow statement and c) Balance sheet. The models which contain all of these three statements are called integrated financial statement models.
Valuation Models
These models value assets or businesses for the purpose of joint ventures, refinancing, contract bids, acquisitions, or other types of transactions or deals. These models require specialized knowledge of valuation theory. Some examples of these models are the Initial Public Offering (IPO) Model, Discounted Cash Flow (DCF) model, and Leveraged Buyout (LBO) Model.
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Three-Statement Model
These models link the balance sheet, income statement, and cash flow statement into one combined model. These models are the underlying basis for more advanced categories of models like DCF models, merger models, and leveraged buyout (LBO) models.
Reporting Model
These models primarily focus on past performance as they comprise the history of revenue, expenses, and financial statements. In that sense, these are quite different from the other financial models and are not considered real financial models. They are primarily used to create actual versus budgeted reports/performance.
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Consolidation Model
These belong to the category of reporting models. A consolidation model comprises multiple business models added together into a single model for financial analysis. Every individual business unit comprises a single tab with the consolidated tab primarily adding up every business unit.
Courses
Over the last few years, there has been a significant increase in the number of financial modeling courses being offered by institutes – both online and classroom-based. These programs and certifications are now offered by corporate, MOOCs like Coursera, edx, Udemy as well as universities and institutes through classroom training, distance learning, or online mode. Some MNCs like EY and KPMG also offer financial modeling certifications.
Eligibility
In terms of formal pre-requisites, any graduate can pursue these courses. However, a background in finance, statistics, mathematics, and economics will enable participants to grasp the nuances and finer concepts. Participants usually include people having CA, CFA, FRM, MBA, Finance degree, B.Tech, and B.Com degrees.
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Careers in Financial Modeling
Upon completion of the financial modeling course/program, participants would be able to add greater value to their careers in the following fields
- Investment Banking
- Private Equity
- Hedge Funds
- Equity Research (Buy-Side and Sell-Side)
- Asset Management
- Corporate Finance and Strategy
- Private Wealth Management
Course Takeaways
Gain conceptual knowledge on valuation methods, financial management, and ratio analysis. Pick up excel skills (a lot of financial models are built on excel), financial modeling, report writing, and presentation skills. Besides learning financial and excel skills financial modeling also aids in critical thinking and decision making.
Depending on the type of certification/program pursued and the awarding authority the course fee varies. Typically, financial modeling course may cost anywhere between INR 10,000 – 50,000 or higher. The variation in fees is mainly driven by the type of course offering.
Some of the courses may simply be online recordings, some may be live online sessions while others may be classroom or distance learning options. Besides the mode of teaching, training/course materials, mock tests, assignments, and possible internship offerings also determine the price.
Top 10 Financial Modeling Course
- Course on Business and Financial Modeling Specialization offered by Wharton on Coursera
- Become a World-Class Financial Analyst (Corporate Finance Institute)
- Business and Financial Modeling Certification on Coursera
- Business Statistics and Analysis Specialization course offered by Rice University (Coursera)
- IMS Proschool FM certification course
- Online Financial Modeling course by Wall Street Prep
- EY Financial Modeling course
- Beginner to Pro in Excel: Financial Modeling course at Udemy
- Financial Modeling & Analysis Courses by edX (multiple courses)
- Corporate Finance Institute (CFI) online certification programs
The CFI offers diverse online financial programs and courses for 3 – 6 months. Enrolled students are provided the flexibility to complete these programs at their own convenience and time. To avail of the certification students will have to complete all the core and elective courses (13) along with the completion of quizzes and regular assignment assessments. A minimum of 80% passing grade is required in each assessment and passing the FMVA final exam.
Financial Modeling & Valuation Analyst (FMVA) Program
Key Highlights
100 – 200 hours training modules, complete at your own pace
6 months duration
100% online training, lifetime access to CFI library
Hands own exercises, assignments and real-world projects, case-studies
Course Focus
The focus of the course will be on topics of financial modeling, finance, excel, valuation, budgeting and forecasting, presentation and visuals, accounting, strategy.
Course Fees
The courses start at around $497 onwards.
IMS Proschool Financial Modeling Certification Course
The IMS Preschool Financial Modeling certification course in association with the NSE Academy & National Skill Development Corporation (NSDC), Ministry of Skill Development, Government of India, is another alternate certification program. The IMS proschool training program has trained 6000+ students across India and is available in the classroom and online format.
Financial Modeling Course
Key Highlights
Flexible learning options including classroom-based, online, and distance learning
24×7 access to online study material, 70+ hrs training program
Training by industry experts with each faculty member having 7+ years of experience
100% placement assistance
Course Focus
The course will cover topics on excel proficiency, financial statement analysis and ratios, financial management, and corporate finance, project finance modeling, equity research modeling, report writing & sector overview.
Course Fees
The course fee varies from INR 40000 (classroom) to INR 28000 (online) and INR 20000 (distance learning).
Wall Street Prep’s Financial Modeling Packages
A prominent and well-known financial education training provider for corporates and investment banks. Wall Street Prep has a variety of courses but their premium package is the most comprehensive of the lot. The course provides a detailed understanding of financial statements, DCFs, M&As, Comps, and LBO modeling.
Key Highlights
Training program used by leading financial institutions
Self-paced comprehensive training modules
Infinite access to Wall Street Prep’s Online Support
Focus on real-world “on the job” Investment Banking training
Course Fees
Program fee – $499
Grant Thornton’s Certification in Financial Modeling & Valuation
This program is targeted at working professionals and students. Delivered in a mixed format of 5-day classroom training combined with online training the course covers topics of excel, modeling, valuation, visualization, project valuation including P&L, Capex, EPC, GANTT chart, etc.
Key Highlights
40 hours of the classroom session
Study material with access to Grant Thorton LMS
Course Fees
Program fee – INR 27500 plus taxes
EY Financial Modeling Course
E-learning Certification in Financial Modeling and Valuation
An industry offering from one of the Big 4 firms. The course is designed by a team of senior professionals from member firms of EY global and the industry suitable for participants who are finance professionals working in investment banks, equity research, finance managers, CA, FRM, MBA finance, CFA professionals, and candidates. Successful participants are given a completion certificate upon assessment.
Course Focus
The program covers topics on structuring and designing models, sector-specific working of revenue and expense, tax calculation, understanding possible ways to compute line items forming part of financial statements, macros, etc.
Course Fees
The course fee is INR 15000 + GST
MOOC Financial Modeling Course
Business and Financial Modeling (Coursera)
It is a foundational course introducing modeling methods, spreadsheet models, and other applications for analysis, valuation, and more.
Key Highlights
100% online, flexible schedule
No prior experience required
Approximately 6 months to complete with a suggested pace of 2 hours/week
Flexible schedule, deadlines
Certificate upon completion
Course Fees
INR 5765 per month. Total cost may vary depending on the overall time taken by participants to complete the course. The estimated cost based on the average estimated timeframe of 6 months is approximately INR 34590/-
Fin. & Quantitative Modeling for Analysts Specialization, University of Pennsylvania (Coursera)
The course is meant for aspirants of data and business analysis, or for other people who are interested in the acquisition of Finance and Quantitative Modeling.
Key Highlights
100% online, flexible schedule
No prior experience required
Approximately 4 months to complete with a suggested pace of 2 hours/week
Flexible schedule, deadlines
Certificate upon completion
Course Fees
INR 5765 per month. Total cost may vary depending on the overall time taken by participants to complete the course. The estimated cost based on the average estimated timeframe of 6 months is approximately INR 34590/-
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- Financial Modeling Course
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Financial Modeling for Startups & Small Businesses on Udemy
Key Highlights
100% online, flexible schedule
No prior experience required
Approximately 4 months to complete with a suggested pace of 2 hours/week
Flexible schedule, deadlines
Certificate upon completion
Course Fees
Similar to other Udemy course offerings this is one of the cheapest options available at a price of INR 8640/- for the course.
Conclusion:
There is no dearth of institutes, academies, or universities offering financial modeling courses. Those enrolling for these courses have plenty of options to choose from including choices based on the preferred mode of learning, course/program duration, cost, certification recognition, and study materials options.
While the online courses may be suitable for working professionals as they offer flexibility on the learning mode and course duration, those at an early stage of their careers or with limited finance experience may opt for the classroom courses. Participants should opt for a program/institute depending on their overall requirements (e.g., career development, learning new skills, career break for personal development) and budget.
While budget (course fees) may be a determining factor along with the course duration, pursuing an industry-recognized certification program with a proven track record of alumni and placements is a prudent step from a long-term perspective.
Frequently Asked Questions- FAQs
Q1. What are the qualifications required for financial modeling?
If you are looking to pursue a post-graduation course in financial modeling, you must be graduate from a recognized university. There is also certain score criteria that are set by institutions to be eligible to enroll for the course. There are entrance exams that one must clear to enroll for the course.
Q2. Which is better from a career perspective standpoint, CFA or financial modeling?
In financial modeling, the job opportunities are mostly critical and specific. But they are specif. Obviously in CFA the salary is higher compared to financial modeling. But that gets sorted when you get potential job roles that are close to CFA course.
Q3. Is financial modeling a good career choice?
Yes, of course. Specially if you are working in an emerging corporate world. Reason been that they use the excel modeling skills which are more in trend and demand.
