Financial Modeling & Valuation: Analyze & Forecast

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Overview

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Build practical financial modeling and valuation skills by creating a complete financial model based on the real-world case of Big Books Corp. In this hands-on course, you'll progress from analyzing historical financial performance and forecasting revenues to constructing integrated financial statements and performing business valuation using Excel. You'll learn how to forecast revenue, SG&A, capital expenditures, depreciation, amortization, working capital, debt, and equity while linking the income statement, balance sheet, and cash flow statement into a dynamic financial model. As you advance, you'll calculate key valuation metrics including Free Cash Flow to the Firm (FCFF), Free Cash Flow to Equity (FCFE), Net Present Value (NPV), Discounted Cash Flow (DCF), WACC, enterprise value, equity value, EV/Revenue, and EV/EBITDA to evaluate business performance and compare companies. Designed for learners interested in financial modeling, valuation, corporate finance, equity research, and investment analysis, this course emphasizes both model construction and interpretation. Rather than focusing only on formulas, you'll understand how financial assumptions influence forecasts, valuation outcomes, and business decisions. By the end of the course, you'll be able to build, analyze, forecast, and interpret comprehensive financial models while applying both intrinsic and relative valuation techniques to assess company performance with confidence.

Syllabus

Introduction and Revenue Forecasting

This module introduces learners to the business structure of Big Books Corp and lays the foundation for constructing a robust financial model. It begins by examining the company's revenue streams and segment-wise performance over time. Learners will explore how to apply growth assumptions for forecasting sales and understand the fundamental purpose and strategic significance of financial models. The module then transitions into calculating total revenue across segments and preparing for cost-based modeling. By the end of this module, learners will be equipped to evaluate historical performance, forecast future revenues, and contextualize financial modeling in real-world investment analysis.

Operating Expenses and Linkages

This module focuses on the operational expenditure elements that influence profitability within a financial model. Learners will explore techniques to project SG&A expenses using rational, defensible assumptions and link those expenses with revenue in a structured income statement. The module also covers key asset components such as Gross PPE and capital expenditures, introducing the logic of depreciation and segment-wise Capex forecasting. By the end of this module, learners will be able to structure interconnected expense and asset flows within a cohesive financial framework.

Depreciation and Amortization

This module builds on capital expenditure modeling by introducing learners to the concepts and calculations behind depreciation and amortization in financial forecasting. It begins with deriving capital expenditures from PPE values and walks through asset-specific depreciation schedules, including machinery and automobiles. The module then transitions into amortization of intangible assets and explains how these non-cash expenses are linked into financial statements. By the end, learners will understand how to generate, validate, and integrate depreciation and amortization schedules into a comprehensive financial model.

Cash Flow and Working Capital

This module introduces learners to the process of constructing the cash flow statement and managing working capital within a financial model. It begins by guiding learners through the indirect method of building the cash flow statement using data from the income statement and balance sheet. The module then transitions into the fundamentals of working capital — including its components, historical linkage, and forecasting logic — culminating in the understanding of the cash conversion cycle and the impact of changes in current assets and liabilities on overall cash flow. By the end of the module, learners will be equipped to analyze, project, and integrate working capital effectively in dynamic financial models.

Equity and Financing Activities

This module focuses on modeling equity and debt-related components of a financial model, particularly the capital structure. Learners begin by forecasting share repurchase activities and understanding their effect on treasury stock and shares outstanding. The module then transitions into handling other assets and liabilities, projecting debt balances, and computing interest income and expense. It concludes with integrating these elements into the income statement, balance sheet, and cash flow statement. By the end of the module, learners will be able to structure and link equity and financing assumptions across financial reports to ensure consistency and accuracy.

Valuation Introduction – DCF Approach

This module introduces learners to valuation fundamentals with a focus on the Discounted Cash Flow (DCF) method. It begins by ensuring the model is structurally sound using a dashboard review, then transitions into DCF mechanics—covering Free Cash Flow to the Firm (FCFF), backward calculation methods, and Free Cash Flow to Equity (FCFE). The module emphasizes the significance of forecasting cash flows, understanding capital structure adjustments, and interpreting Net Operating Profit After Tax (NOPAT) to derive firm and equity value. Learners complete the module with a foundational ability to apply and evaluate a DCF valuation in practical financial models.

Advanced Valuation Metrics

This module builds upon foundational valuation techniques and introduces advanced applications critical for equity valuation. It focuses on completing the DCF (Discounted Cash Flow) model by aligning enterprise value with equity value and interpreting capital structure implications. Learners explore the derivation and interpretation of Beta, risk-free rate, cost of capital, and WACC (Weighted Average Cost of Capital), enabling them to assess investment risk and accurately estimate the value of a business. Through hands-on integration of market-based inputs and theoretical principles, this module reinforces precision in financial model assumptions and valuation outputs.

Valuation Outputs and Comparables

This module provides a comprehensive understanding of final valuation outputs and their practical interpretations. Learners explore how to derive enterprise value and share price from DCF models and apply comparative valuation techniques using market multiples such as EV/Revenue and EV/EBITDA. The module emphasizes how to bridge intrinsic valuation with relative benchmarks and equips learners with the tools to evaluate company value through both forecast-driven and market-driven approaches. This dual approach strengthens analytical skills necessary for real-world valuation scenarios.