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See-Through Modelling: A technical blueprint for financial modelling using lessons learned from PFI

Book Description

Building and maintaining effective financial models See-Through Modelling provides a solid theoretical and practical basis for becoming an advanced financial modeller in Excel. It gives the theory and practical detail necessary to build and maintain a financial model yourself. This is done with particular reference to project finance and by drawing upon the lessons learned from UK PFI. In this book Dominic Robertson covers the key aspects of financial modelling, including: - Financial theory - Modelling theory - Excel theory and techniques - A step-by-step practical guide to building a project finance operating model - Computer set-up and efficient use - Keyboard skills - Macro-economic data collection He also includes key practical techniques such as how to: - Greater strategic vision due to vast forecast flexibility - Lower risk of modelling errors due to standardised modelling - Decrease reliance on individual analysts due to increased ease of model interchange - Clear, detailed and holistic modelling function training outline Learning to build a UK PFI project finance model is an extremely good place to start to learn financial modelling. UK PFI is like the world in miniature with simplified operations and simplified finance but containing all the accounting and cash elements that make for a wide-ranging experience. See-Through Modelling is for finance directors who are looking for a deeper understanding of the dynamics of their enterprise and those who want to understand the benefits of adopting a see-through modelling strategy within their enterprise. It is also an invaluable resource for aspiring financial modellers in general and project finance modellers in particular.

Table of Contents

  1. Cover
  2. Publishing Details
  3. About the author
  4. Preface
    1. What this book covers
    2. Who this book is for
    3. How this book is structured
    4. How to use this book
  5. Introduction
    1. The commercial problem
    2. Operating the asset, after financial close and post-construction
    3. The modelling solution
    4. Lessons learnt from PFI
  6. PART 1: THEORY
    1. Chapter 1. Modelling theory
      1. Definition of modelling
      2. A short history of modelling
      3. The four founding principles of modelling
      4. The modelling mind-set
      5. The body of modelling theory
    2. Chapter 2. Finance theory
      1. Characteristics of a project finance PFI deal
      2. Project finance: interested parties and their needs
      3. The business
      4. The business reporting cycle
      5. The macro-economy
      6. Flows and balances
      7. Accrued and cash: the idea of working capital
      8. Informal definition of the financial statements (for modelling purposes)
      9. The hidden financial statement: the tax calculation
      10. The cash flow waterfall; power at your fingertips and easy navigation
      11. Banking cover ratios
      12. Investor return calculations
      13. Reading the project model
    3. Chapter 3. The language of modelling theory
      1. 1. The modelling language principles
      2. 2. The modelling language rules
      3. 3. The modelling sheets
      4. 4. The modelling building blocks
      5. The FAST + 2 modelling adaptation
      6. The benefits of using FAST
    4. Chapter 4. Excel theory
      1. 1. Setup
      2. 2. Formulae
      3. 3. Keyboard shortcuts
      4. 4. Navigation
      5. 5. Automation
      6. 5. Known Excel issues
    5. Chapter 5. Computer theory
      1. 1. Body posture and eyes
      2. 2. PDFs
      3. 3. WinZip
      4. 4. File naming convention and file control
      5. 5. Backing up and secure file distribution
      6. 6. Skype
      7. 7. VBA Editor
      8. 8. Event Driven Analysis
  7. PART 2: PRACTICE
    1. Chapter 6. Building the model
      1. How to use this chapter
      2. Overview
      3. Steps
    2. Chapter 7. Practical modelling techniques
      1. Techniques for the Shadow phase
      2. Techniques for the Update phase
    3. Chapter 8. Maintaining the investment
      1. Design, application and maintenance
      2. Model control & model naming convention
      3. Running sensitivities
      4. Links and model interface issues
  8. PART 3: FURTHER LESSONS
    1. Chapter 9. Lessons from PFI
      1. Lessons from PFI and structured finance
      2. Successful adaptations to other industries
      3. Topics for further study
  9. APPENDICES
    1. APPENDIX 1. Links and references
      1. The book’s website
      2. Lazuli Solutions, innovative modelling solutions for business decision makers
      3. FAST modelling standard
      4. Other useful links
    2. APPENDIX 2. Dictionary of terminology, units & abbreviations
      1. Modelling terminology
    3. APPENDIX 3. Keyboard shortcuts
    4. APPENDIX 4. Excel functions
    5. APPENDIX 5. Business map or Quick Start sheet
    6. APPENDIX 6. The tree analogy
  10. Lazuli Solutions
    1. Approach
    2. Experience
      1. Lazuli Solutions
      2. PFI
    3. Get in touch with Lazuli Solutions