The sustainable growth rate (SGR) measures how fast a firm can grow without infusing any additional external equity and without borrowing additional funds i.e. keeping the leverage constant. Continuing with our chocolate business example: Suppose your chocolate business is 2 year old and experiencing a good acceptance in the market. Now you as the owner [...]

Case to Consider If you invest in XYZ shares (assume that we are listed) you can generate an average year on year return of 25%. If I see any other stock, I would not be able to generate more than 20%. Would you invest in XYZ stocks? If it had been the good old pre [...]

Just Dial is a leading local search engine providing users of its “Just Dial” search service with information and user reviews from its database of local businesses, products and services across India. Its search service is available to users through multiple platforms. As one of the first companies to offer local search services in India, [...]

Both Groupon and Zynga are coming up with big IPOs. Groupon make us skeptical about multi-billion dollar valuation and claims because of their business model. We aim to check both the firm’s claims using the Financial Modeling approach.

Pristine is pleased to inform you about its extensive program on "Financial Modeling & Valuation” using Excel . The objective of the training is to help the candidates to prepare Integrated Financial Models in Excel to enable decision making in areas like, Corporate Finance, Equity Valuation, Credit Analysis/Appraisal, Investment banking, Project Appraisal, M&A, etc. Pristine [...]

The Asset Schedule shows the outflow of cash from the balance sheet, which is registered in the P&L, of the company. You will be basically learning how to put the costs of buying the assets in the statements. The cost of buying the asset is recognized through a term called Depreciation. This depreciation is added to the last year’s accumulated depreciation and also recognized in the P&L account. So you will be learning how the asset schedule is built and linked with P&L and Balance Sheet.

We are continuing our series of Financial Modeling in Excel.

Once you calculate your Ratios, then the next step is to forecast your projections. Please note that while making projections, make suitable assumptions and keep adding them to the Assumptions sheet. This makes it easier for the reader/auditor to validate the forecasts. Click Read More to view the rest of this entry.

After establishing the cash flows via Indirect Method it becomes all the more essential to analyse these figures year on year using different ratios. You can download a sample excel model containing the formulas for all the ratios. To view the model, click Read More.

Indirect Method: Most companies choose this method to statement of cash flows at any given reporting period as it uses accrual accounting information to present the cash flow statement. CFA candidates and all those who aspire to become financial modelers should understand the Indirect method to master the concepts of equity valuation. Click here to download an excel sheet which highlights how to use this method.

What is financial modeling? Financial modeling is creating a complete program/ structure, which helps you in coming to a decision regarding investment in a project/ company. Financial models are abstract representations of a financial decision making. Now these decisions can be derived on a simple piece of paper or in tools such as Excel, MATLAB [...]