FINANCIAL STATEMENT ANALYSIS AND MODELLING WITH EXCEL

INTRODUCTION
Financial data drives key decisions in the business world of today. Executives, managers, and analysts must be able to interpret financial statements and translate them into actionable insights. This course bridges the gap between theory and practice by combining rigorous financial statement analysis with Excel-based modelling skills. 

Through hands-on exercises, participants will learn to construct models that support forecasting, budgeting, valuation, and performance evaluation, enabling informed business and investment decisions.

COURSE OBJECTIVES

By the end of this course, participants will be able to:

• Interpret and evaluate income statements, balance sheets, and cash flow statements.
• Apply ratio and trend analysis to assess business performance and risks.
• Build structured and dynamic financial models in Excel.
• Develop forecasts, sensitivity, and scenario analyses to support decision-making.
• Perform company valuation and present results effectively to stakeholders.
   

COURSE OUTLINE

Module 1: Understanding Financial Statements

• Overview of financial reporting and accounting principles
• Income statement: revenues, expenses, and profit margins
• Balance sheet: assets, liabilities, and equity structure
• Cash flow statement: operating, investing, and financing cash flows
• Common financial reporting red flags

Module 2: Analytical Tools for Performance Evaluation

• Vertical and horizontal analysis
• Profitability ratios (ROA, ROE, margins)
• Liquidity ratios (current ratio, quick ratio, working capital)
• Leverage ratios (debt-to-equity, interest coverage)
• Efficiency ratios (inventory turnover, asset utilization)
• Practical group exercise: ratio analysis of a real company’s financials in Excel

Module 3: Introduction to Financial Modelling Best Practices

• Principles of good model design (clarity, flexibility, transparency)
• Excel tips & tricks: formulas, functions, shortcuts
• Structuring models: inputs, calculations, outputs
• Linking financial statements in Excel (integrated model setup)

Module 4: Forecasting Techniques and Applications

• Revenue forecasting approaches (top-down vs. bottom-up)
• Expense forecasting and cost behavior analysis
• Building pro forma income statements
• Practical exercise: creating a 3-year forecast in Excel
• Sensitivity analysis: changing key assumptions (sales, costs, interest rates)
• Scenario analysis: best case, base case, worst case models

Module 5: Valuation and Decision Support Models

• Time value of money refresher (NPV, IRR, Payback Period)
• Discounted Cash Flow (DCF) valuation
• Comparable company and multiple-based valuation (P/E, EV/EBITDA)
• Practical exercise: valuing a sample company using DCF in Excel
   

Module 6: Presenting and Interpreting Financial Models

• Building dashboards and charts in Excel for reporting
• Summarizing model insights for management and investors
• Stress-testing assumptions and risk considerations
• Case study: analyzing a company’s financial health and projecting growth