Unwrapping the Cash Flow Model

Unwrapping the Cash Flow Model (C201) is a one-day practical course that teaches users of financial models the skills and knowledge necessary to find their way through the key elements of models developed by others. This course builds on the concepts and craft taught in Foundation Techniques for TRUE Analysis (C101) and is designed to prepare those involved in key decision making processes - developers, fund managers, advisors and government bodies - for the high level analytical skills taught in Decision Making Using Financial Models (C301).

Unwrapping the Cash Flow Model (C201) is designed for anyone who needs to understand and use cash flow models to assist in decision-making : senior managers and directors of development or fund management, companies, originators, credit analysts, bid managers, portfolio managers, advisors and government officials.

While the course does not teach participants how to build a financial model, model builders – especially those relatively new to structured finance transactions – may find this course useful in preparing them for the more advanced T-series courses

Unwrapping the Cash Flow Model (C201) is an instructor-led course, where participants are taken through the structured review of a full scale cash flow model. Special attention is paid to identifying areas where errors, omissions, over-simplifications or over-complications may be encountered in live business models.

Each module also includes a short exercise to help participants sharpen their hands-on detective and interpretative skills.

Participants will recap on FAST modeling skills and discuss the purpose of examining cash flow models,

The course is organized into 7 modules in four sessions:

1. Where do we start to unwrap the apparent “black box” financial model?
2. The Cash flow cascade as the beating heart of any model
3. Debt Service Cover Ratios
   • How they are calculated
   • Which ratios are useful in which circumstances
   • Common mistakes and misunderstandings
4. Funding calculations
   • Senior debt and bond
   • Mezzanine
   • Drawdown and repayment
   • Debt Service Reserve Accounts
5. Equity investment
   • How returns are calculated
   • Which ratios are useful in which circumstances
   • Common mistakes and misunderstandings
   • Shareholder subordinated debt calculations
6. Capex, depreciation and major maintenance reserve accounts
7. Elements of Taxation

Attendees should be familiar with the concepts and craft taught on Foundation Techniques for TRUE Analysis, C101, or alternatively have attended FAST Modeling Skills (T101).

Attendees will need to bring a laptop with them, ideally one they are accustomed to using, with a Microsoft Windows operating system and a recent version of MS Excel. Laptops may be rented from Financial Mechanics for an additional charge.