Why Learning Financial Modelling is a Great Decision?April 27, 2017
The global economy is ever evolving, it’s good to be on top of your game, a step ahead of the others. If that is your goal, then to get a career boost in the field of finance, learning financial modelling is imperative. it will jumpstart your career in incredible ways. It is good to learn concepts and tools required to get an edge in the ultra-competitive job market. Financial modelling is one of the most sought-after skills in today’s corporate world where demand outnumbers supply.
What is Financial Modelling?
Financial modelling is nothing but an analysis of the company’s performance on applicable financial factors.
The intention of the analyst is to accurately forecast the capability in potential earning of an organisation.
There are various theories that exist, a financial analyst tests these theories by creating business events in an interactive format, mainly spreadsheets in excel, this is referred to as a financial model. It usually captures all variables for a particular event. After quantification of these events, formulas are created around these variables.
The spreadsheet is mainly in excel hence proficiency in it is required.
Financial models are mostly used by a financial analyst to understand the company’s performance and to predict its future. Being able to build a financial model is a prerequisite for jobs in investment banking, credit rating, risk management and so on.
One might be a business school graduate, one could also understand theoretically what financial modelling is, but it has been found that there a gap in learning of financial modelling and application. Most of the learning in B-schools is not relevant to latest developments, it is not detailed enough, and financial modelling is generally thought without excel practical experience. So if you are experienced, you might know what to do however would not know how to do it right, in the best technique. For example, you might know what is cash, debt paydown, ways a company can raise revenue. But what big companies really want you to know is how to determine the fair stock price of a company given all their financial statements.
Learn Financial Modelling the Right Way
When financial modelling is understood and applied correctly you will truly understand the fundamentals of the company, and your growth in corporate finance is vast. You will learn that ‘revenue’ is not just an item in the income statement but a combination of many aspects such as sales pipeline, probability of sales conversion, sales channel etc…, you will understand that market expense is combination of detailed data like, channel wise budget, conversion funnels, customer acquisition cost etc.,
In recent years financial modelling has become a predominant talent requirement for career advancement in finance. Most corporate finance roles require the knowledge of financial modelling, which translates that if you know financial modelling it also opens many career choices for you. The reason it is so multipurpose is that it assists in any job role that is involved in analysing a company. There are not many people who know how to build a financial model hence doing a specialised course will give you an advantage over others. A course will help you understand in detail on how to value a company, take a company IPO, issue shares, mergers and acquisitions, advise a company on options pricing or secondary sales, you will have a stronger foundation due to the understanding of financial modelling.
A financial modelling course is for anyone, someone who is pursuing an MBA, done their CA, CFA, or plan too, as it will add on to the theoretical learning in a practical way, and for working professionals as they will get an in-depth understanding and an edge over others, they will be able to contribute and spearhead financial modelling projects.
In recent times, it is not only good enough to simply deliver the past event results and explain what happened to the stakeholders. The explanation does not have any value if it cannot assist in making strategic decisions which will enable real value creation and the hence incremental increase in the valuation of the company and revenue.
Imarticus Learning has designed a Financial Modelling & Valuation Certification program for careers in Corporate Finance across various Financial Services roles like M&A, Private Equity, Equity Research, Business Modelling, Start-Ups, Budgeting, Financial Control and Financial Operations.
It helps to develop a fast-paced career path, which is both financially and professionally rewarding. The global skill sets acquired through a career in financial services enables you to take on a variety of roles and leadership positions across large Corporates, Start-Ups, Investment Banks, Buy Side funds and new age e-commerce companies.