Base Library

1 Introduction
1 How Can Managers Assure that the Decision Papers which They Receive Are Not Already Flawed and Fau
2 How Can Applied Tasks Be Modeled Clearly and in a Structured Manner?
3 How Can Macros Be Used in the Modeling Process?
4 How Can Financial Modeling Be Used in Applied Work in Finance?
5 How to Create Financial Models for Investment and Financing?
6 How to Create Financial Models for Corporate Finance?
7 How to Create Financial Models for Portfolio Management?
8 How to Create Financial Models in the Field of Derivatives?
9 Who Needs a Deep Understanding of Financial Modeling?
10 How Can I Demonstrate My Financial Modeling Skills?
2 Financial Modeling Standards
1 Executive Summary
2 Introduction, Structure, Learning Outcomes and Case Study
3 Foundations of Financial Modeling
3.1 What Are Models and What Is Financial Modeling?
3.2 Analyzing the Model Requirements and Defining a Task List
3.3 Structuring Financial Models in Modules
4 Current State of Financial Modeling in Theory and Applied Work
4.1 Literature on Financial Modeling
4.2 Different Approaches – Identical Aims
5 Financial Modeling Standards
5.1 Top-10 Financial Modeling Standards
5.2 150 Financial Modeling Standards
6 Implementing the Top-10 Financial Modeling Standards with Reference to an Example
6.1 Define the Modeling Purpose
6.2 Separate the Problem into independent Subsections (Modules)
6.3 Provide a Graph of the Flow of Data and the Model Structure
6.4 Separate Inputs from Outputs
6.5 Choose a Unified Layout for the Worksheets
6.6 Use Unified Formatting
6.7 Avoid Complex Formulas and Use Only One Type of Formula
6.8 Avoid Circular References
6.9 Work with Control Functions
6.10 Present the Results Professionally
7 Summary
Notes
Further Reading
3 Model Review
1 Executive Summary
2 Introduction, Structure and Learning Outcomes and Case Study
3 Fundamentals of Model Review
3.1 The Term ``Model Review''
3.2 Steps in the Model Review Process
4 Errors in Financial Models
4.1 Qualitative Errors
4.2 Quantitative Errors
5 Error Detection – Recognizing and Finding Errors
5.1 Logic Inspection
5.2 Tests
5.3 Analysis Tools
6 Examples of Applications of Analysis Tools
6.1 Brief Market Overview of Analysis Tools
6.2 Model Review with Microsoft Excel
6.3 Model Review with Operis Analysis Kit (OAK)
7 Control Calculations
7.1 Control Calculations that Show the Concrete Numerical Deviation
7.2 Binary Control Calculations
8 Measures to Assess the Plausibility of the Results
8.1 Sensitivity Analysis
8.2 Scenario Analysis
9 Documentation
10 Summary
Notes
Further Reading
4 Workshop Excel Part I
1 Executive Summary
2 Introduction, Structure, Learning Outcomes and Case Study
3 Why Study Excel?
4 Developing a Financial Model
4.1 Defining the Task List
4.2 Identifying the Key Tasks
4.3 Visualizing Abstract Relations with Bubble Charts
5 Visual Display of a Financial Model
5.1 Structuring a Financial Model
5.2 Documenting a Financial Model
5.3 Structuring Large Financial Models Ergonomically
5.4 Borders and Lines: Providing Structure to the Data
5.5 Using Colors to Highlight Important Elements
6 Side Note: Using Key Combinations and the Ribbon to Work in Excel
6.1 Key Combinations and Sequences in Excel
6.2 Different Types of Key Combinations in Excel
7 Summary
Further Reading
5 Workshop Excel Part II
1 Executive Summary
2 Introduction, Structure, Learning Outcomes and Case Study
3 Creating a Prototype in Excel
3.1 The Formula Sheet – The Translator
3.2 Use of Formulas
3.3 Activating Add-ins
3.4 Making Use of Additional Functions
3.5 Using Names to Improve Clarity of the Formulas
3.6 Comments
4 Sending Signals to the Management
4.1 Signaling with Colors: Conditional Formatting to Create Information
4.2 Text as Signal: Providing Informative Messages
5 Data Collection
5.1 Secure Data Gathering
5.2 Importing Internal Data
5.3 Importing External Data: Working with Security Prices from the Internet in Excel
6 Analysis Stage: Sensitivity and Scenarios
6.1 Sensitivity Analysis Using Data Tables
6.2 Scenarios with the Scenario Manager
6.3 Goal Seek
6.4 Solver – Goal Seek for Challenging Tasks
7 Testing the Performance of a Financial Model
7.1 Formula Auditing: Checking the Flow of Data and Formulas
7.2 Support from Error Checking
7.3 Formula Evaluation: Formula Assessment Step by Step
8 Summary
Notes
Further Reading
6 Workshop Excel Part III
1 Executive Summary
2 Introduction, Structure, Learning Outcomes and Case Study
3 Presenting Insights and Recommendations
3.1 Recommendations for the Presentation of Charts
3.2 Creating Simple Charts in Excel
3.3 Dynamic Charts
3.4 Selecting a Suitable Chart
4 Summary
Further Reading
7 VBA Workshop
1 Executive Summary
2 Introduction, Structure and Learning Outcomes
3 Why Study Programming with VBA?
4 Generating Excel Software Solutions
4.1 Preparing Excel for Macros
4.2 Possibility 1: Creating Applications with the Macro Recorder
4.3 Possibility 2: Programming with VBA
5 Variables and the Most Important Data Types
5.1 Declaring a Variable
5.2 Conventions for Variable Names
6 Process Flow Models and Charts
6.1 Process Flow Models
6.2 Flowchart
6.3 Hierarchy Chart
7 The Most Important Language Elements of VBA
7.1 Programming with Branches
7.2 Loops
7.3 Programming Cells and Ranges
8 Comfortable Input and Output Using Dialogue Fields
8.1 Reading Data with the InputBox
8.2 Data Output with the MsgBox
9 Programming Your Own Dialogues
9.1 Steps Needed to Create Your Own Dialogue
9.2 Control Elements
10 Creating Charts with VBA
10.1 Information needed and Types of Diagrams
10.2 Useful Programs for Diagrams
11 Tool Kit: Practical Excel Tools for Modeling
11.1 Programming Headers and Footers
11.2 Transferring Comments to a List
11.3 Creating a Table of Contents
11.4 Protecting Cells with Formulas
12 Summary
Further Reading
8 Investment Appraisal
1 Executive Summary
2 Learning Outcomes, Definitions, Model Structure and Case Study
3 The Term Investment and Methods of Investment Appraisal
4 Static Investment Appraisal Methods
4.1 Cost Comparison Method
4.2 Profit Comparison Method
4.3 Average Rate of Return
4.4 Static Payback Period Method
4.5 Comparison and Assessment of the Static Investment Appraisal Methods
5 Dynamic Investment Appraisal Methods
5.1 Net Present Value Method
5.2 Internal Rate of Return Method
5.3 Annuity Method
5.4 Comparison and Assessment of the Methods of Dynamic Investment Appraisal
6 Summary
Literature and Suggestions
9 Financing
1 Executive Summary
2 Learning Outcomes, Definitions, Model Structure and Case Study
3 Fundamental Rules of Financing
3.1 The Golden Rule for Balance Sheets
3.2 The Relationship between Equity and Debt and the Leverage Effect
4 Analysis of Key Figures
4.1 Key Return Figures
4.2 Key Figures about Financial Structure
4.3 Key Figures on the Asset Structure
4.4 Key Figures for the Capital Structure
4.5 Key Figures for the Structure of Earnings
4.6 Cash Flow Key Figures
5 The Ordinary Capital Increase
5.1 Assumptions Concerning the Ordinary Capital Increase
5.2 Calculating the Values on the Balance Sheet
5.3 Calculating the Value of the Subscription Rights
6 The Long-Term Loan
6.1 Assumptions Concerning the Long-Term Loan
6.2 The Annuity Loan
6.3 The Amortizable Loan
6.4 The Bullet Loan
6.5 Comparison of the Various Types of Repayment
7 Bonds
7.1 Assumptions for the Bond
7.2 Analyzing the Bond from the Issuer Perspective
7.3 Analyzing the Bond from the Investor Perspective
7.4 Present Value Method for Known Spot Rates
7.5 Analysis of the Present Value Method
7.6 Risk Analysis
8 Short-Term Financing Using the Example of the Supplier Credit
8.1 Interest on the Supplier Credit
8.2 Granting a Supplier Credit
8.3 Delaying Payment on a Supplier Credit
9 The Cash Flow
9.1 Basics
9.2 Calculating the Gross Cash Flow from Operating Business Activities
9.3 Calculating the Operating Free Cash Flow
9.4 Calculating the Net Cash Flow
9.5 Control Calculations
10 Financing via Shortening of the Capital Commitment Period
10.1 Premises when Shortening the Capital Commitment Period
10.2 Reducing Receivables
10.3 Inventory Reductions
11 Summary
Notes
Literature and Suggestions for Further Reading
10 Corporate Finance Part I
1 Executive Summary
2 Introduction, Structure, Learning Outcomes and Case Study
3 Overview of the Methods of Company Valuation
4 Company Valuation Using Discounted Cash Flow Models
4.1 Basics of Corporate Planning
4.2 WACC Approach
4.3 Period-Specific WACC Approach
4.4 APV Approach
4.5 Equity Approach
4.6 Sensitivity Analysis
4.7 Scenario Analysis
4.8 Company Valuation for Professionals
5 Summary
Notes
Literature and Suggestions
11 Corporate Finance Part II
1 Executive Summary
2 Introduction, Structure, Learning Outcomes and Case Study
3 Company valuation Using Market Capitalization and Book Value
3.1 Overview of Market Capitalization
3.2 Overview of Book Value
3.3 Valuation Process with Market Capitalization and Book Value
4 Trading Multiples
4.1 Overview of Trading Multiples
4.2 Valuation Process with Trading Multiples
5 Transaction Multiples
5.1 Overview of Transaction Multiples
5.2 Comparison of Trading Multiples and Transaction Multiples
5.3 Valuation Process with Transaction Multiples
5.4 The Football Field Graph
6 Summary
Notes
Literature and Suggestions
12 Portfolio Management Part I
1 Executive Summary
2 Introduction, Structure, Learning Outcomes and Case Study
3 Portfolio Management
4 Return
4.1 Discrete Return
4.2 Continuous Return
4.3 Comparison between Continuous and Discrete Return
4.4 Returns for Different Time Periods
4.5 Calculation of Prices based on the Different Types of Returns
5 Risk
5.1 The Term Risk
5.2 How to Estimate Risk
5.3 Categories of Risk
5.4 Volatility
5.5 Variance
5.6 Standard Deviation
5.7 Risk Measures for Different Time Periods
5.8 Moving Volatility
5.9 Covariance
5.10 Coefficient of Correlation
5.11 Semi-variance
5.12 Value at Risk
5.13 Beta Factor
6 Summary
Notes
Literature and Suggestions for Further Reading
13 Portfolio Management
1 Executive Summary
2 Introduction, Structure, Learning Outcomes and Case Study
3 Overview of Active and Passive Portfolio Management
3.1 Introduction to the Topic
3.2 Solving Optimization Problems with the Excel Solver
3.3 Matrix Operations in Excel
4 Active Portfolio Management
4.1 Absolute Optimization
4.2 Relative Optimization
5 Passive Portfolio Management
5.1 Quadratic Optimization
5.2 Constrained Regression
5.3 Linear Optimization
5.4 Summary of the Results for Passive Portfolio Management
6 Summary
Notes
Literature and Suggestions for Further Reading
14 Derivatives
1 Executive Summary
2 Introduction, Structure, Learning Outcomes and Case study
3 Options Basics
3.1 Terminology and Types of Options
3.2 Differentiating Features of Options
3.3 What are the Value Drivers in Option Pricing?
4 Option Pricing
4.1 Basics of Option Pricing
4.2 Models for Determining the Option Price
5 What Is Involved in the Four Basic Option Strategies?
5.1 Long Call
5.2 Short Call
5.3 Long Put
5.4 Short Put
6 Fundamentals of Futures
6.1 What Are Futures?
6.2 Which Futures Contracts Are Essential in Applied Work?
7 Pricing of Futures Contracts
7.1 Index Futures
7.2 Interest Rate Futures
7.3 Currency Futures
7.4 Commodity Futures
7.5 Futures on Single Stocks
8 What is involved in the Basic Futures Strategies?
8.1 Long Futures
8.2 Short Futures
8.3 Spreads
9 Conclusions and Outlook
10 Summary
Notes
Literature and Suggestions
Index
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