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What is Financial Modelling?
Financial modelling is a way through which models are created that contains summarised information on company performance. These models give us inn detail analysis of any particular decision and its impact on the financial status of the company/firm. Any particular fiscal term or financial decision is displayed quantitatively with the help of data/information.
It helps any company to predict/change their future decisions accordingly. A lot of attributes like company forecasting, corporate accounting, decision analysis, etc. are included in financial modelling. In this article, let us see who can take up a course in financial modelling, and what would be one’s expectations?
Who is Eligible for a Financial Modelling Course?
There are no such strict guidelines for taking up this course. One can be a graduate from any particular stream and can take up this course. It is better if someone comes from an accounting background as they will have the prerequisites about accounting & finance analysis which will work as a base for financial modelling.
A lot of work is done on excel or spreadsheets which help in creating a quantitative description of any financial activity. One can find a plethora of courses on the internet and can choose the suitable one. On average, one can complete a financial modelling course in one to three months depending upon the course length.
Key Skills Required for Financial Modelling
Choose a financial modelling course which covers the mentioned topics/skills as these are the most required skills for financial modelling –
- One must be able to work on excel fluently.
- Good accounting skills are required, one must be fully aware of concepts like account statement management, depreciation, revenue recognition, etc. You must be able to read/understand/dissect/manipulate financial statements. You must be able to link the income and cash flow statement with the balance sheet.
- To create a good financial model, one needs to have good forecasting skills, a problem-solving approach, etc. One must be able to present his/her work in a detailed way.
- Good designing skills on applications which are used to create financial models like excel, spreadsheet, etc. The usage of graphs and analysis helps in making the presentation better.
- You need to be aware of various types of financial models like DCF analysis, 3 statement model, Sensitivity analysis model, LBO model, etc. One must know about the situations in which these types of models are used.
- You must have the ability to narrow down a problem into models. You must be able to simplify a problem.
Some key points on financial modeller:
- There is a lot of demand for a financial modeller. According to statistics, the average salary of a financial modeller in India is 9-10 lakhs per annum.
- Besides Investment Banking, financial modellers are demanded in Private Equity, Venture capitalist, Corporate development, Real estate development, etc. There is a lot of diversity in this field and can choose according to his/her preferences.
- It would be a lot comfortable if you are a finance graduate as it will help you in grasping things faster. However, anyone can take up a financial modelling course at any physical institution or an online course like Wall Street Prep, Breaking into Wall Street, Coursera online courses for financial modelling, etc.
Financial modelling is used a lot by firms/companies to forecast their future financial decisions. These models help in finding an in-detail analysis of any financial decision and its loopholes. There are plenty quality courses available online. This article was all about financial modelling and who is eligible for it. I hope it helps!