Financial Modeling In Excel For Dummies, 2nd Editi On

Turn your financial data into insightful decisions with this straightforward guide to financial modeling with Excel 

Interested in learning how to build practical financial models and forecasts but concerned that you don’t have the math skills or technical know-how? We’ve got you covered! Financial decision-making has never been easier than with Financial Modeling in Excel For Dummies. Whether you work at a mom-and-pop retail store or a multinational corporation, you can learn how to build budgets, project your profits into the future, model capital depreciation, value your assets, and more. 

You’ll learn by doing as this book walks you through practical, hands-on exercises to help you build powerful models using just a regular version of Excel, which you’ve probably already got on your PC. You’ll also: 

• Master the tools and strategies that help you draw insights from numbers and data you’ve already got 
• Build a successful financial model from scratch, or work with and modify an existing one to your liking 
• Create new and unexpected business strategies with the ideas and conclusions you generate with scenario analysis 

Don’t go buying specialized software or hiring that expensive consultant when you don’t need either one. If you’ve got this book and a working version of Microsoft Excel, you’ve got all the tools you need to build sophisticated and useful financial models in no time! 

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 2

Beyond the Book 3

Where to Go from Here 3

Part 1: Getting Started with Financial Modeling 5

Chapter 1: Introducing Financial Modeling 7

Defining Financial Modeling 7

What it is 8

Who uses it 9

Why it matters 10                                                              

Looking at Examples of Financial Models 10

Project finance models 11

Pricing models 12

Integrated financial statement models 12

Valuation models 12

Reporting models 13

Chapter 2: Getting Acquainted with Excel 15

Making Sense of the Different Versions of Excel 15

A rundown of recent Excel versions 16

Focusing on file formats 23

Defining Modern Excel 23

Recognizing the Dangers of Using Excel 25

Capacity 26

Lack of discipline 27

Errors 28

Looking at Alternatives and Supplements to Excel 31

Chapter 3: Planning and Designing Your Financial Model 35

Identifying the Problem That Your Financial Model Needs to Solve 35

Designing How the Problem’s Answer Will Look 39

Gathering Data to Put in Your Model 45

Documenting the Limitations of Your Model 46

Considering the Layout and Design of Your Model 47

Structuring your model: What goes where 49

Defining inputs, calculations, and output blocks 50

Determining your audience 51

Chapter 4: Building a Financial Model by the Rulebook 53

Document Your Assumptions 53

Create Dynamic Formulas Using Links 59

Only Enter Data Once 61

Model with Consistent Formulas 62

Build in Error Checks 64

Allowing tolerance for error 66

Applying conditional formatting to an error check 67

Format and Label for Clarity 68

Chapter 5: Using Someone Else’s Financial Model 71

Considering Templates for Building a Financial Model 72

Why templates can be appealing 72

What’s wrong with using templates 72

Why you should build your own model 74

Inheriting a File: What to Check For 75

Meeting a model for the first time 76

Inspecting the workbook 77

Using Audit Tools to Find and Co