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Modeling Financial Statements: B10.3304

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Disclaimers Prerequisites Bio Overview Help Materials Assignments Grading Schedule

 

Video introduction as suggested by the Stern School

Overview

Various management disciplines teach you how to analyze and forecast parts of a business. Building on this foundation, this course will help you weave your forecasts into coherent spreadsheet-based pro-forma financials. Modeling and projecting comprehensive financial statements provides a reality check on the forecasts, enables "what if" analysis, provides an integrated view of the business, and is a key step in valuation.

 

The course will start from conceptual examples that illustrate the key intuition and explain linkages between financial statements. It will then build on these examples to forecast the financial statements of real companies.

 

This course is highly relevant to if you are pursuing any career that requires you to understand or build models. Examples of such careers are investment banking, private equity, buy-side or sell-side research, credit research, corporate finance, and valuation. First year and second year students can both take this course. Those who took it in their first year have told me that this course gave them a significant competitive edge during their interviews and summer internships.

Disclaimers

Prerequisites

Help and Office

Materials and Course Design

Assignments

Exams and Grading

Important computer tips for the final

Schedule

 

Module Topic
1
  • Deriving cash flows, enterprise or unlevered cash flows
2
  • Building blocks of models; Linking cash flow forecasts to value
3
  • Designing models, Customers; Suppliers, employees, and other expenses
4
  • Multiperiod models: Long-term accruals and deferrals
5
  • Excel tools for scenario analysis; Capacity: PP&E and depreciation
6
  • Modeling taxes
7
  • Modeling financing, Time value of money and bonds
8
  • Integrative analysis
9
  • Which cash flows should one discount, Integrated models, Prioritizing assumptions in models; sensitivity analysis
10
  • Adjusting models for capitalized leases
11
  • Mergers and acquisitions