Foundation Techniques for TRUE Analysis

Foundation Techniques for TRUE Analysis (C101) is a 1-day foundation course that teaches the fundamental concepts underlying cash flow models and gives participants structured, hands-on experience of their implementation.

Please note that those who need to build financial models should start with the FAST Modeling Skills (T101) course.

C101 is the first in the C series of courses that build in sequential stages to equip participants with the Concepts, Craft, Competency, and Confidence to perform TRUE analysis on the models they use for decision making. TRUE analysis is an effective and time-efficient approach because it focuses on:

TOP-DOWN method - to organize the chaos of complexity

RESULTS - so analytical effort is decision-led

UNCERTAINTY - as understanding its impact is key

EXPLANATORY graphics - a mandatory analytical and presentation tool

Foundation Techniques for TRUE Analysis (C101) is aimed at individuals who use cash flow models to help make critical decisions – lending, investment, bid appraisal, asset monitoring – through the life cycle of cash flow-financed transactions.

Senior managers and directors of development or funding companies, originators, credit analysts, bid managers, portfolio managers, advisors and government officials will all benefit from attending this course.

Please note that no prior knowledge is assumed for C-series courses. All the relevant concepts – from the worlds of accounting, financial management, business mathematics and banking – are explained and related to the tasks of decision making. As well, participants will be taught and practice the modeling-craft skills necessary to navigate, understand, and analyze the model. As a result, participants develop the competency and confidence to use complex financial models to make good decisions swiftly and surely.

Foundation Techniques for TRUE Analysis (C101) is a hands-on workshop style course, with limited lecturing or speaking to PowerPoint slides. Attendees follow the instructor, while building their own simplified financial models on their own computers; in this way they immediately practice what they have been taught.

The emphasis of the course is on learning how to relate the concepts and craft being taught to the specific demands of the attendees’ own jobs. Questions are positively encouraged throughout and no previous knowledge or expertise is required.

The course works on the premise that effective analysis of any complex entity requires an ability to break the entity down into its essential elements. For financial models, this is achieved most quickly and effectively by the participant building his or her own simple model under the expert guidance of the instructor, then using it to perform a straightforward analytical task. This exercise introduces the participant to the material concepts and craft of models that may be encountered in business life.

After being introduced to the concepts behind FAST modeling skills, participants will be guided through preparing the Excel environment for modeling.

Participants will learn how the introduction of structure is of benefit to model users, as they are shown how to impose order onto a blank spreadsheet.

By implementing the concepts and practicing the fundamental techniques introduced during the course, participants will learn the following essential modeling skills and principal elements of a financial model:

• Formula construction
• Navigation techniques
• Time
• Inflation
• Revenues and operating costs
• Fixed assets
• Debt and equity investment
• Quick trend-spotting
• Cash waterfall
• Profit and loss account
• Balance sheet

Finally, participants will use their own model to:

• Construct debt service cover ratio and equity return calculations
• Assess debt capacity and hurdle rate of return

No prior knowledge is required or assumed in order to learn the basic concepts and master the modeling craft necessary to TRUE model analysis

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.