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Package 3: Advanced Financial Modeling

Package 3: Advanced Financial Modeling

Take everything to the next level as we build upon the basic & core concepts to cover the fundamental financial modeling concepts that one must be master in order to perform the minimum financial analysis required. We will make you "super-stars" in Excel and modeling techniques by plowing deep into building robust, integrated models and properly analyzing the results of our models.

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Last 10 posts

Add-ins issue
I could not install the Add-ins as my excel prompts "not responding"

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by Xerxes Noel O.

added 3 years ago

why Revolver is reduced after you put 6000$ in cash in 2006 ? Please answer urgently thank you
why Revolver is reduced after you put 6000$ in cash in 2006 ? Please answer urgently thank you

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by Long N.

added 5 years ago

gordon growth number
Hi for the gordon growth number g say using global GDP growth rate of 2%, 1. has this already included inflation? 2. if yes, then you just add the global inflation rate? 3. If you were to include inflation, then does that mean you need to adjust your whole model (projection of 3 financial stat... Read More

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by Elvina J.

added 6 years ago

including inflation in the model
Hi, when projecting a listed company for long short funds so I guess you won't have access to management unless through participating in earnings call, 1. How do you include inflation in the model? Is this at both the revenue and costs side? Is it necessary to do that? Not sure if listed companies... Read More

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by Elvina J.

added 6 years ago

measuring capital charge
Hi from the course, I see that you are using total capital to calculate capital charge. I was reading up on Damodaran's explanation on this as well and don't understand that, can you elaborate? "In cases where firms alter their capital invested through their operating decisions (for example, by usin... Read More

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by Elvina J.

added 6 years ago

Negative EVA
Hi I revised the calculation on EVA using Rirchard S's method as per the prior thread below, however this yields negative EVA through the projection years hence TV as % of TEV is >100%, I guess this renders EVA useless in valuing the company right? Which also means from EVA perspective, it is re... Read More

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by Elvina J.

added 6 years ago

DCF - can you project with a change in capital structure
Hi When pitching a stock for long/short funds: 1. Say the company has debt repayment schedule, in addition to using trading comps, I thought of using DCF as a sanity check or to extrapolate a few data points for valuation. Say the management announced debt repayment schedule in the next few yea... Hi When pitching a stock for long/short funds: 1. Say the company has debt repayment schedule, in addition to using trading comps, I thought of using DCF as a sanity check or to extrapolate a few data points for valuation. Say the management announced debt repayment schedule in the next few years of your 5 years projection. I understand that DCF keeps the capital structure constant (which is also it's flaw in valuation method), is it recommended to project such debt repayment and any other planned equity changes during the projection? 2. Follow up question to the above, assuming there is a change in the capital structure during the projection, then for diluted share outstanding for your valuation, I assume you would include the exercisable options or securities at that terminal year using implied share price as exercise price (which is ok even though there is circular) right? 3. If you recommend changing the capital structure through the projection as above, if I were to pitch the stock to a fund, and I assume the fund take minority stake, does it mean projecting FCFE is more relevant than FCFF in the DCF? (since you are an equity investor hence you get whatever that is paid to you after debt holders are paid off). Is that right? 4. If you keep capital structure constant through the projection, you should yield the same implied share price whether you use FCFF or FCFE in DCF right (hence you can use this method as a way to check errors in your projection if you dont get the same implied share price using both methods)? 5. What if you project a capital structure that is not constant through DCF, would DCF using FCFF vs FCFE yield a different implied share price? 6. If you were to project a different capital structure in the DCF, does that render DCF method useless meaning is it better to use other valuation methods e.g. trading comps like 1-year forward or 2-3 year forward multiple? 7. Practical application of DCF: I understand that some hedge fund folks have the impression that DCF is useless due to too many theoritical assumptions that could impact on the valuation greatly, although in some case I think it can be used if there is a lack of trading peer comps, am I right? Just wanted to get your opinion on the limitation. For pitching stocks, are there any methods that you think are less useful? (e.g. residual income, liquidation value is also less useful unless the company is in distress or you are projecting the share price to go to 0) 8. Is it realistic to project the share price to go to 0 e.g. Blue Apron for example? From what I know (correct me if I'm wrong), troubled companies hardly reach 0 share price (maybe Bear Stearns?). Share price tends to go to very depressed price and stay there for a long time before they decide to privatize it. Read More

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by Elvina J.

added 6 years ago

residual income (application in real life) - 4 questions
Hi 1. is there a scenario where residual income will be helpful in valuing a publicly listed company? 2. What would be the objective of using residual income in such scenario? 3. is this method more useful for valuing certain sectors? 4. would it be helpful in valuing any listed company in... Read More

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by Elvina J.

added 6 years ago

mid month convention for real estate (new capex)
why do you use month 7 for year 1 and then month 8 for year 2 to 5? Why not use month 8 for year 2, month 9 for year 3 etc?

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by Elvina J.

added 6 years ago

mid month convention for real estate (new capex)
why do you use month 7 for year 1 and then month 8 for year 2 to 5? Why not use month 8 for year 2, month 9 for year 3 etc?

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by Elvina J.

added 6 years ago