Financial Calculations: Applications

• Time Value of:
  • Present Value (PV) and Net Present Value (NPV)
  • Internal Rate of Return (IRR) and Multiple IRR (MIRR)
  • Using XNPV and XIRR
• Dividends per Share and Cash Flow to Equity
• Effective Yields & Returns

Corporate Financial Analysis

• Profit and Loss versus Balance Sheet Analysis
• Comparable Company Analysis
• Building Block Analysis:
• Vertical, Trend, and Horizontal Analysis
• Liquidity
  • Current, Quick, and Cash Ratios
• Asset Management and Activity
  • AR and AP Turnover
  • Cash conversion cycle
  • Asset Turnover
• Solvency, Leverage and Gearing
  • Debt, Equity, and Times Interest Earned Ratios
• Assessing Profitability Management
  • Profit Margin, Gross Margin, Return on Assets, Return on Equity
• Market and Valuation
  • Price-Earnings and Earnings per Share Ratios
• Modeling the DuPont Identity
  • The Three-Step and Five-Steps Models

Calculating Cost of Capital and Capital Structure

• The Gordon Dividend Model
• Supernormal Growth
• Regression Analysis
• Calculating Cost of Equity and Cost of Debt
• Computing the Expected Return on the Market
• Computing Weighted Average Cost of Capital (WACC)

Financial Statement Modeling

• How Financial Models Work
• Free Cash Flow Measurement (FCF)
• Using FCF to Value the Firm and its Equity
• Sensitivity Analysis
• Discounted Cash Flow Analysis
• Incorporating a Target Debt/Equity Ratio into a Pro Forma Financial Statements
• Modeling Dividends Policy

Model Construction Techniques

• Data Tables Design
• Assumptions and Input Variable Rules
• Regression and Conditional Functions
• Array Functions and Formulas
• Spinner Data Modeling
• List Box Data Modeling
• Option Box Modeling
• Acquiring and Updating Data from the Web & other sources
• User-Defined Functions