Spreadsheet Models: Cashflow, Net Present Value and Pricing

In this course, we use good spreadsheet modeling practice to build three types of spreadsheet model - a pricing decision model; a cashflow statement; and a project lifecycle analysis using discounted cashflows.

This course is a companion to my course Building a Spreadsheet Forecasting Model which covers the structure for building a spreadsheet forecasting or planning model. You do not need to have completed that course to undertake this course. 

The focus of this course - Spreadsheet Models: Cashflow, Net Present Value and Pricing - is practical examples of some of the most important spreadsheet models.  

There are many types of financial model that can be built using Microsoft Excel. These include:

1. A Project Finance Model. Large projects will use a financial model as a basis for budgeting and to forecast outcomes, including cashflows to match debt repayment.
2. A Pricing Model. The price charged for products or services is part of the “marketing mix” for the operation. Pricing has a significant impact on demand and, therefore, profitability.
3. A Cashflow Model and Integrated Financial Statements. A financial model can be built to integrate the cashflow, profit and loss and balance sheet statements. These models can easily become very complex, and the challenge is to keep to the principle of keeping it simple and flexible.
4. A Valuation Model. A valuation model will be built to assess the value of a business or business unit, or potential new business opportunity. In the case of a business acquisition, the seller will present a model that maximises the value of the business; and the potential buyer will critically analyse that model to determine its feasibility and to establish their own valuation. The model may also be required to illustrate how debt raised for the purchase will be serviced.

Spreadsheet Models: Cashflow, Net Present Value and Pricing will provide learners with the skills they need to develop a flexible spreadsheet models for all of these scenarios. 

This course assumes a good basic knowledge of Microsoft Excel, but advanced knowledge is not necessary and, as with the previous course, Macros and visual basic are avoided.

1. Finance staff
2. Managers
3. Students of business finance and management

1. The guiding principles of spreadsheet model building
2. The work involved in getting ready to build a spreadsheet model, including identifying stakeholders and defining the problem that the model will address
3. How to develop models for pricing decisions including identifying the profit-maximising price for a business
4. How to build a cashflow model to support a wide variety of business situations
5. How to extend the cashflow model to include an Income Statement and Balance Sheet
6. The project lifecycle
7. How to select an appropriate discount rate for use in Net Present Value Analysis
8. How to compare projects using Net Present Value
9. How to apply the Discounted Cashflow Valuation Model to business projects
10. How to compare investment opportunities

There are no pre-course requirements.