Introduction to Financial Modeling

This two-day course provides a hands-on introduction to three essential classes of financial models: corporate finance models, risk management models, and structured finance models. Participants will be introduced to the theory, accounting and technical implementation of all three types of models.

Applications covered for each class of model are: • Corporate finance: ratio analysis of financial statements; pro-forma projections; entity and project valuation • Risk management: discount rate risk; probabilistically-measured risk • Structured finance: mortgage-backed securities (MBS); generalized asset-backed securities (ABS)

01-May-2012 -- 02-May-2012New YorkUSD$2475
NY Institute of Finance - Midtown9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ Anthony Webster; ] Tue Wed Level: Basic

11-Dec-2012 -- 12-Dec-2012New YorkUSD$2475
NY Institute of Finance - Midtown9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ Anthony Webster; ] Tue Wed Level: Basic

CPE CREDITS
14.0
Anyone who needs a basic understanding of the main financial models in use today. This includes: managers who are exposed to one or more of these model types; workers making a career transition into finance, or into a new area of the finance industry; recent graduates who want to jump start their career growth in the finance industry; and students who are new to finance or modeling.
No advance preparation required.
Students will be able to:
  • Read and understand financial statements
  • Compute ratio analysis models, and interpret them and their limitations
  • Create and interpret pro-forma projections
  • Understand the basic mechanics of discounted cash flow (DCF) valuation methods
  • Create DCF-based valuation models
  • Understand the meaning of ''risk'' and ''reward'' in a financial context
  • Understand the characteristics and limitations of discount-rate risk measures
  • Understand the basic concepts of probabilistically-measured risk
  • Create discount-rate risk and probabilistically-measured risk models, and understand their limitations
  • Understand the basic framework of structured-finance models
  • Create simple MBS and ABS models, and how to measure the risks and rewards of these securities
Attendees must have a solid knowledge of Excel.
  • Financial Modeling for Corporate Finance - Evening
  • Insurance Company Financial Modeling
  • Introduction to Simulation for Financial Professionals
  • Using Excel to Solve Financial Problems
    • Day 1 - Introduction and Corporate Finance Models
    Introduction to the Three Kinds of Models

      Accounting Basics

      • Introduction to ''the language of finance''
      • Reading financial statements: cash flow statement, balance sheet and income statement

      Corporate Finance Models

      • Ratio analysis models -- computing and interpreting
      • - Model assumptions and limitations
      • Pro-forma projections -- creating and interpreting
      • - Model assumptions and limitations
      • Introduction to discounted cash flows (DCFs)
      • - Time value of money and cash flow mechanics
      • - Introduction to the DCF valuation method
      • - Creating and interpreting DCF-based valuation models
      • - Model assumptions and limitations

    Day 2 – Risk Modeling and Structured Finance Models
    Risk Models
    • Introduction to ''risk'' and ''reward'' in a financial context
    • Key characteristics and limitations of discount-rate risk measures
    • Creating and comparing discount-rate risk models
    • Understanding key assumptions and model limitations
    • Essential aspects of statistics and probability for financial modeling
    • Basic models of probabilistically-measured risk
    • Creation of probabilistically-measured risk models
    • • Understanding key assumptions and model limitations

    Structured Finance Models

    • Introduction to structured finance: lending against cash flows

    A Basic Mortgage-Backed Security Model

    • Aggregating the assets
    • Modeling the basic cash flows
    • Modeling prepayments and defaults
    • Measuring risk

    A Basic, Generalized Asset-Backed Security Model

    • Considering the included assets
    • Modeling the basic cash flows
    • Modeling prepayments and defaults
    • Measuring risk

    Clients who register for this course will receive a complimentary 4-month subscription to FT.com. The Financial Times is the world's most respected financial newspaper, providing a broad assessment on finance, business and the industrial sector. The move to the electronic version follows an ongoing review of our environmental responsibilities as a global business and as part of the Pearson group. FT.com also has features that are not available in hard copy, such as: Special Reports, Alphaville, editor blogs, education sections and much more! Subscriptions will start within 6-8 weeks of the start of class and are limited to one subscription per client. (Please note: as of May 1, 2011, the electronic subscription replaces the hard-copy 3-month Financial Times subscription.)

    Lunch is included for all students taking day classes.