Building Financial Models

by John Tjia

McGraw-Hill Education | June 17, 2009 | Hardcover

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The ability to effectively create and interpret financial models is one of the most valued skills in corporate finance--from Wall Street to Main Street. Now, the acclaimed guide to designing, building, and implementing valuation projection models is fully revised and expanded to keep finance and accounting professionals competitive in today's marketplace.

This second edition of Building Financial Models continues the tradition of its predecessor by providing a hands-on approach to creating a core model that is supported by broad coverage of cornerstone accounting and finance principles. Additionally, this updated volume features:

  • Entirely new coverage of discounted cash flow (DCF) modeling
  • Excel formulas for making powerful calculations within the spreadsheet
  • In-depth explanations of both the principles and mechanics of projection models

    Building Financial Models helps readers practice good thinking and apply sound knowledge of their tools--two key attributes to producing robust and easy-to-use models. This practical guide takes you step by step through the entire process of developing a projection model, with a full chapter dedicated to each phase. By the end, you will have a working, dynamic spreadsheet financial model for making projections for industrial and manufacturing companies.

    Furthermore, this Second Edition provides the vocabulary and syntax of model building so you can tailor core models to fit any size company and allow for quick input changes to test sensitivity. The companion website www.buildingfinancialmodel.com offering example spreadsheets will give you a head start on developing your own models.

    A flexible and successful financial projection model does more than just add numbers--it explains the complex relationships between those numbers and illuminates ways to use those associations to add value to an enterprise. Building Financial Models is the only book you need to create and implement a fluid financial projection model that is both state of the art and user friendly.

Format: Hardcover

Dimensions: 464 pages, 9.3 × 6.5 × 1.32 in

Published: June 17, 2009

Publisher: McGraw-Hill Education

Language: English

The following ISBNs are associated with this title:

ISBN - 10: 0071608893

ISBN - 13: 9780071608893

Found in: Finance and Investing

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– More About This Product –

Building Financial Models

Building Financial Models

by John Tjia

Format: Hardcover

Dimensions: 464 pages, 9.3 × 6.5 × 1.32 in

Published: June 17, 2009

Publisher: McGraw-Hill Education

Language: English

The following ISBNs are associated with this title:

ISBN - 10: 0071608893

ISBN - 13: 9780071608893

About the Book

The most up-to-date guide available for designing, building, and implementing valuation projection models

"Building Financial Models" has been widely acclaimed by accounting and finance professionals for its insight into determining a company's current value and projecting its future performance. Building on this tradition, the updated and expanded Second Edition helps readers develop a financial model, complete with entirely new material on discounted cash flow (DCF) modeling. Professionals will find this guide invaluable for both its practical, step-by-step approach to creating a core model and its broad coverage of model mechanics and foundational accounting and finance concepts.

Table of Contents

1.A Financial Projection Model
2.Best Practices in Modeling
3.Starting Out
4.Your Model-Building Toolbox: F Keys and Ranges
5.Your Model Building Toolbox: Functions
6.The Role of Cash in Modeling
7.Balancing the Balance Sheet
8.Income Statement and Balance Sheet Accounts
9.Putting Everything Together
10.The IS and BS Output Sheets
11.The CF sheet
12.Ratios: Key Performance Indicators
13.Forecasting Guidelines
14.The Cash Sweep
15.The Cash Flow Variation for Cash Sweep
16.Recording macros
17.Discounted Cash Flow Valuation
18.On-screen controls
19.Bells and whistles
20.Writing a macro in visual basic for applications

From the Publisher

The ability to effectively create and interpret financial models is one of the most valued skills in corporate finance--from Wall Street to Main Street. Now, the acclaimed guide to designing, building, and implementing valuation projection models is fully revised and expanded to keep finance and accounting professionals competitive in today's marketplace.

This second edition of Building Financial Models continues the tradition of its predecessor by providing a hands-on approach to creating a core model that is supported by broad coverage of cornerstone accounting and finance principles. Additionally, this updated volume features:

  • Entirely new coverage of discounted cash flow (DCF) modeling
  • Excel formulas for making powerful calculations within the spreadsheet
  • In-depth explanations of both the principles and mechanics of projection models

    Building Financial Models helps readers practice good thinking and apply sound knowledge of their tools--two key attributes to producing robust and easy-to-use models. This practical guide takes you step by step through the entire process of developing a projection model, with a full chapter dedicated to each phase. By the end, you will have a working, dynamic spreadsheet financial model for making projections for industrial and manufacturing companies.

    Furthermore, this Second Edition provides the vocabulary and syntax of model building so you can tailor core models to fit any size company and allow for quick input changes to test sensitivity. The companion website www.buildingfinancialmodel.com offering example spreadsheets will give you a head start on developing your own models.

    A flexible and successful financial projection model does more than just add numbers--it explains the complex relationships between those numbers and illuminates ways to use those associations to add value to an enterprise. Building Financial Models is the only book you need to create and implement a fluid financial projection model that is both state of the art and user friendly.

From the Jacket

The most up-to-date guide available for designing, building, and implementing valuation projection models

This updated and augmented second edition of Building Financial Models provides a state-of-the-art method for creating projection models that will accurately determine a company's valuation today and its earnings and profits tomorrow.

Complete with brand new material on discounted cash flow (DCF) modeling and an accompanying website with example spreadsheets, Building Financial Models is the most comprehensive guide to real-world projection modeling available.

Globally recognized by accounting and finance professionals for its proven step-by-step approach, this hands-on road map to projection model design and implementation features:

  • An overview of projection models--what they are, how they are used, and how they vary between industries
  • In-depth explanations of the accounting and finance concepts that underpin working financial models
  • Detailed directions for using spreadsheet software to create dynamically powerful financial models
  • Clear strategies for producing and using a projection model that allows the user to change inputs quickly for sensitivity testing

    Building Financial Models is a single, go-to resource that offers unparalleled depth of coverage and breadth of topic.

    Get started on Building Financial Models now to develop the skills you need to stay competitive in today's corporate finance arena.

About the Author

John S. Tjia is a founding partner of TMG Associates, LLC, a consulting firm that specializes in financial modeling for corporate finance. A former vice president at JPMorgan Chase, he has taught modeling and valuation classes to hundreds of analysts and associates.