Chapter Summaries
Introduction to Financial Modelling
Introduction to Financial Modelling by Liam Bastick begins with an introduction to essential concepts and the importance of financial modelling in business.
In Chapter 1, you’ll learn key Excel functions. This includes SUM, IF, VLOOKUP, and INDEX/MATCH. These functions are crucial for building strong financial models.
Chapters 2 to 5 cover important Excel features and best practices. You’ll learn about absolute referencing, number formatting, styles, conditional formatting, and range names. These chapters also teach data validation, Goal Seek, Solver, and using hyperlinks. Layout tips and time series analysis for forecasting are also included.
Chapter 6 focuses on error checks. This chapter shows you how to build checks into your models to find and fix errors.
In Chapters 7 to 9, you’ll explore practical applications and theory. Chapter 7 offers an example of a model template you can reuse. Chapter 8 discusses financial statement theory, helping you build accurate models. Chapter 9 explains control accounts to ensure your models are complete and correct.
Chapter 10 is a detailed guide to building a complete financial model. It includes setting up the structure, adding sheets, creating and linking financial statements, and detailed modelling of revenue, costs, expenses, capital expenditure, debt, taxation, and equity. The chapter ends with a case study to apply what you’ve learned.
Chapter 11 is about self-review. Learn techniques to check your models and ensure they meet standards.
Chapter 12 teaches ratio analysis. Use financial ratios to assess business performance with your models.
Throughout the book, Bastick provides clear explanations and practical examples. This book is ideal for beginners and those wanting to improve their financial modelling skills. By the end, you will know how to create accurate and effective financial models.
Continuing Financial Modelling
Continuing to Financial Modelling by Liam Bastick begins with a recap of essential financial modelling principles. In Chapter 1, you’ll cover best practices, time series analysis, financial statement theory, and control accounts. This ensures you have a strong foundation.
Chapters 2 to 3 explore advanced analysis techniques. You’ll dive into “What-If” analysis with conditional formulae, scenario analysis, data tables, and sensitivity analysis using tornado charts and simulations. These chapters also include breakeven and variance analysis, which are crucial for dynamic financial modelling.
Chapters 4 to 6 focus on specific modelling applications. You’ll learn about forecasting, including seasonal and cyclical forecasting, revising forecasts, and pro-rating forecasts over time. These chapters also cover modelling inventory, capital expenditure, and debt, including debt sculpting and calculating interest rates correctly.
Chapters 7 to 9 cover valuation considerations, linking models, and efficiency tips. You’ll master deriving the correct cash flow for DCF, considering discount factors, and using the dividend discount model. Practical tips on section numbering, date formats, sheet referencing, and reducing file size are also included to streamline your modelling process.
Chapter 10 looks to the future with advanced Excel features. You’ll learn about dynamic arrays, XLOOKUP, XMATCH, new data types, and StockHistory. These tools will help you stay up-to-date with the latest in financial modelling.
Throughout the book, Bastick provides clear explanations, practical examples, and step-by-step guides. This book is perfect for those with a basic understanding of financial modelling who want to advance their skills. By the end, you’ll be able to create complex and accurate financial models.
