Mastering Cash Flow and Valuation Modelling

Alastair Day has worked in the finance industry for 20 years in treasury and marketing functions. In 1990 he established Systematic Finance as a consultancy and financial lessor concentrating on the computer and communications industries. Alastair has a degree in Economics and German from London University, an MBA from the Open University Business School, and is an associate lecturer in corporate finance with the OUBS. He is the successful author of several books including Mastering financial Modelling, Mastering Risk Modelling and The Financial Director’s Guide to Purchasing Leasing.

• AcknowledgementsAbout the authorConventionsOverviewExecutive summaryWarranty and disclaimer  1 Introduction and overview Scope of the bookModel design methodology Example modelsSummary  2 Functions CategoriesFinanceMathematicsTimeLookupLogicTextOther functionsSummary  3 Model template Design objectivesSystematic design methodCase objectivesTemplatesInput sheetTimelineSummary  4 Historic statements Accounting sheetsIncome StatementBalance sheetAdjustmentsSummary  5 Sales forecast Forecasting objectivesMethodSalesCommon size analysisForecast sheetSummary  6 Assets Fixed assetsExcel functions Existing assetsNew asset depreciationWritten down valueAsset summaryTax depreciationSummary  7 Debt Debt scheduleRequired entriesInterest ratesForecast income statementForecast balance sheetSummary  8 Balance sheet Current assets Non-current assetsCurrent liabilities Long-term liabilities and shareholders’ fundsTaxBalancing itemSummary  9 Cash flow OutlineCash flow statementCash for debt serviceCash waterfallChartSummary  10 Ratios MethodCommon size analysisCore ratios ProfitabilityOperating efficiencyFinancial structureCash flowDebt coverageGrowthMarket ratiosSummary  11 Cost of capital BackgroundCost of debtPreference capitalHistoric cost of equityForecast cost of equityCost of capitalGraphical representationSummary  12 Valuation Cash flowsTerminal value Choice of methodInitial valuation ChartSummary  13 Other approaches MethodBook valueAdjusted book valueMarket valueMultiplesPeer dataSummary  14 Alternative methods MethodAdjusted present value Economic profit Summary  15 Sensitivity OutlineReturnsData matrixScenario managerManual scenariosSummary  16 Optimisation OutlineGoal SeekSolverCoding SolverSummary  17 Reporting ReportingExecutive summaryDashboardDynamic chartsSummary  18 Auditing and reviewModel reviewSelf-checksExcel audits toolsConsistency checksAudit sheetSummary  19 Documentation Documentation NavigationProtection Version checkFinal reviewSummary  Appendices1 Functions list, software installation and licence2 An introduction to Microsoft® Office 2010 (Office 14)  Index