Mastering Financial Modeling: A Practitioner's Guide to Applied Corporate Finance - Softcover

Day, Alastair

Softcover

ISBN 10: 027364310X ISBN 13: 9780273643104

Publisher: Ft Pr, 2003

Synopsis

(Pearson Education) A handbook on corporate finance, for the student or practitioner. Offers tools for proficiency in building Microsoft Excel models and applying corporate finance concepts. The CD-ROM contains software introduced in the text, allowing the reader to get started immediately. System requirements not listed. Softcover.

About this title

About the Author

Alastair Day has held executive positions in corporate treasury and marketing, and has developed many models for both internal and external use. His books include Lease and Finance Evaluation, and Executive Briefing: The Financial Director's Guide to Purchasing Leasing (Financial Times Prentice Hall). Day now works as a corporate lessor providing consulting and training services.

From the Back Cover

Financial proficiency has never been more critical to the success of your business, or to the development of your own career.

This is an indispensable guide for anyone who is serious about understanding and applying the latest principles, practices and roles of finance. From capital structure to caps and floors, from random walk to risk management, this book covers the key areas of corporate finance, financial markets and investment management. It delivers an unrivalled combination of new thinking and practical wisdom, direct from the cutting-edge of financial innovation.

Excerpt. © Reprinted by permission. All rights reserved.

Introduction—Who Needs This Book?

I was introduced to Microsoft Excel about 15 years ago when a client asked me to prepare a lease versus purchase analysis to prove that leasing was indeed more beneficial than purchasing. I spent much of the following weekend developing a Basic program to provide an after-tax net present value for both options. The client produced his own Lotus 1-2-3 model and while we both derived similar answers, the development time for the spreadsheet was only a couple of hours.

After this experience, I began to use Lotus 1-2-3 to review funding alternatives, lease pricing and portfolio cash flows. As spreadsheets have become more powerful, I have increased the scope of models and improved my own approach and design, which has had benefits in development time and accuracy. It is this personal approach which is outlined in this book and disk combination.

The success of spreadsheets, especially since the introduction of Office 95, means that most managers have Microsoft Excel as part of their desktop. Yet few receive specific training in modelling procedures just as few business schools teach Excel as a core part of their curriculum. Managers achieve a certain standard, but this means that many spreadsheet models are:

* incomprehensible except to the author
* contain serious structural errors
* not able to be audited without a great deal of effort
* not maintainable or flexible enough to be developed further
* failing in their key objectives

The simplicity of Excel means that models can be written 'on the fly' with no thought to any of the above problems. Excel is a sophisticated tool and I would argue that it should be a core skill for managers to produce clear maintainable applications and be proficient in spreadsheet design. There is much management writing about 'empowering individuals' and providing them with 'decision tools' and Excel can assist in providing solutions.

This is what I call 'Applied Financial Excel,' which brings together:

* financial skills
* modelling
* design methodology

This book will provide managers with an approach not covered in corporate finance textbooks or Excel manuals. The objective here is to write a practical book to help users, rather than yet another book on financial mathematics or Excel functions. The first part of the book discusses design methodology and features for improving model design. The second part of the book provides templates for solving particular corporate finance problems and includes briefly the underlying theory. As added bonus, the book contains a CD containing all the software introduced in the book. The book is aimed at groups with differing levels of responsibility:

* CFOs and finance directors
* financial controllers
* analysts
* accountants
* corporate finance personnel
* treasury managers
* risk managers
* middle office staff
* general managers
* personnel in banks, corporates and government who make complex decisions and who could benefit from a modelling approach
* academics, business and MBA students
How to Use This Book

* Install the Excel application templates using the simple SETUP command. The files are named by subject and referenced in each chapter.
* Work through each of the chapters and the examples.
* Use the book, spreadsheets and templates as a reference guide. There is a complete list of titles together with their relevant chapters in Appendix Three.
* Apply the design methodology to all your models and applications.
* Practise and improve your efficiency and competence with Excel.

Edition details

• Publisher: Ft Pr
• Publication date: 2003
• Language: English
• ISBN 10: 027364310X
• ISBN 13: 9780273643104
• Binding: Paperback
• Number of pages: 384