FAST Modeling Skills

FAST Modeling Skills (T101) is a 2-day course that teaches financial modeling through FAST modeling design and construction techniques, which we introduce in a free 1-hr FAST Mechanics webinar. Each participant will be taught to apply these techniques rigorously, as he or she models a simple business acquisition case study. All of the calculations required to forecast the three primary financial statements -- profit and loss, balance sheet, and cash flow -- are modeled step-by-step, and the target company is valued based upon the present value of forecast dividends.

The course also includes an overview of inflation indexation, modeling depreciation, and deferred tax. Though we will model simple term debt interest and repayment calculations, financing issues are largely absent (see follow-on T-series courses). The course de-emphasizes theory in favor of detailed instruction and hands-on practice with good model design and modeling techniques, which are applicable to a wide variety of modeling topics.

FAST Modeling Skills is aimed at those people who need to build, modify, or run financial models.

FAST Modeling Skills is aimed at those people who need to build or run financial models. For those with no modeling experience, this course provides a solid introduction to real-world financial modeling. For experienced modelers, this course will help the quality and productivity of your modeling.

FAST Modeling Skills is a hands-on course with limited lecturing or speaking to PowerPoint slides. Attendees follow the instructor, while building their own financial models on their own computers; in this way they immediately practice what they have been taught.

Though the course provides a general grounding (or review for the more experienced) of basic financial accounting principles, the main aim of the course is to teach and practice FAST modeling skills, namely producing models that are flexible, accurate, structured, and transparent.

The course covers elements of model design, Excel modeling techniques, and some basic financial accounting principles. Participants will rigorously apply FAST modeling principles to improve their modeling design, style, structure, and productivity.

As participants incrementally construct their models, they will avoid using the mouse in favor of keystroke techniques that will improve both their modeling speed and accuracy. All the while we will progress towards producing a fully-functioning financial model, accommodating subjects such as capital expenditure and modeling straight-line depreciation, deferred tax, the primary financial statements, basic term debt calculations and valuing forecast dividends.

Day 1 includes specific sessions focused on:

• Preparing the Excel environment followed by an initial 'skills and drills' session before we apply techniques to financial calculations.
• Modeling operating revenues and expenses using flags and indexation factors; capital expenditure and depreciation with introduction to the 'balance corkscrew'.
• Roughing out basic P&L using placeholders and introduction to alternative modeling sign conventions; term debt interest and principal repayment calculations.
• Wrap-up completion of skeleton balance sheet and cash flow payment cascade; what's the remaining road map for Day 2?

Day 2 continues to implement FAST modeling techniques through specific sessions focused on:

• Structured approach to reliable indexation factors; forecast price indices vs. contract reference price levels.
• Taxation: actual cash tax paid vs. P&L tax charge and deferred tax; simple introduction of concepts (see T301 "Advanced Tax Modeling" for detailed implementations).
• Share capital account; calculating profit-constrained dividends.
• Present value of shareholder distributions as primary DCF valuation methodology; model flexing and wrap-up on ancillary points raised and topics of interest to participants.

Attendees should have a basic understanding of MS Excel (e.g. syntax of IF statement, purpose of $s for anchoring cell references). They will also need to bring a laptop with them, ideally one they are accustomed to using, with a Microsoft Windows operating system and Microsoft Excel loaded with Analysis Toolpak available. Laptops may be rented from Financial Mechanics for an additional charge.