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# Financial Modelling in Excel Workshop & Introduction to the DCF Analysis Jakarta, Indonesia March 20-21, 2014 Course Agenda

Day 1 – Introduction to Financial Modelling & Income Statement Forecasting
Introduction Financial modelling as a powerful and versatile skill for finance professionals Applications of financial modelling Getting started in financial modelling  Good practices in financial modelling  Financial modelling conventions  Model layout, formatting and design Accounting refresher for financial modelling  Review of most important items of the Income Statement, Balance Sheet & Cash Flow statement  Relationships between the financial statements Excel & financial modelling  Excel best practices & commonly used functions  Useful techniques & Excel shortcuts  Utilizing macros & pivot tables analysis  Scenario analysis through data tables, what-if analysis and scenario manager  Creating powerful graphs and charts Historical financial statements  Importance of the analysis of historical financial statements  Analysis of historical Income Statement and Balance Sheet  Identification of key trends and drivers. Historical data manipulation. Modelling the Income Statement  Analysis of the historical income statement, macroeconomic environment and market trends  Identification of relevant trends and model drivers  Options regarding revenue forecasting (output, geographical or business segment approach)  Analysis of the cost items and structure  Making projections of the Income Statement items  Income tax expense forecasting  Setting up the tax loss carry forward table

Balance Sheet . Role of dividend payout ratio. maturity and principal repayment schedule  Incorporating debt seniority into the model  Key role of the Short Term debt and Investments in the model  Calculating interest expense with links to the rest of the model Modelling the Statement of Cash Flows  Setting up the cash flows schedule  Cash flows from operating. Inventory and AP forecasting CAPEX and amortization schedule Fixed Asset forecasting CAPEX – one of the key model inputs Analysis of historical CAPEX Understanding of long term CAPEX trends Analysis of amortization: asset classes.Day 2 – Building a financial model of a company: Balance Sheet and Cash Flow forecasting Modelling the Balance Sheet  Organization and structure of the Balance Sheet  Approach to Balance Sheet forecasting  Overview of different supporting schedules used in the model  Analysis of intangible assets  Shareholders’ Equity forecasting  Forecasting dividends. investing and financing activities  Treatment of working capital items  Verifying the movement of cash for each period  Integrating the Statement of Cash Flows into the model Putting it all together: balancing the model  Connecting the projected financial statements and supporting schedules  Balancing the balance sheet – common errors and useful checks  Dealing with circular references and making the model robust  Getting rid of the undesirable error messages    . historical trends CAPEX and Amortisation forecasting Debt Schedule           Creating a comprehensive debt schedule Long term debt as a key source of funding for the company Analysis of long term debt – interest cost.supporting schedules Working Capital Schedule Turnover ratios and working capital assumptions Analysis of historical trends Importance of working capital items for cash flow management AR.

discount periods. football fields.  Running sensitivity analysis using data tables Introduction to the DCF analysis  Basic valuation concepts – Enterprise Value vs.Checking the model and managing model output  Building the scenario manager  Running scenarios under different operating assumptions  Analysing model outputs under different scenarios  Implementing automated output reporting including charts. terminal value)  Discount rate considerations  Practical DCF valuation exercise . etc. Equity Value  DCF analysis – an introduction (formulas.

5% .5% Jan -0.4% Jan 1.54 Jan 367.3% and annually. chg.1 10-Year Treasury Note Jan 0.4% Producer price index Feb Change.0% Feb 367.8% Year Ago 356.6% 12 mo.132 Jan 49. monthly and annually Feb 0.2% 12 mo.3% 12 mo.31 Year Ago 1. monthly and annually IV Q '06 III Q '06 2. 2.3 Year Ago 56.3 Management Inflation Consumer price index Change.3% 12 mo.30 Year Ago Moving Averages 6-Month Treasury Bill Feb 1.399 Year Ago 2. monthly 1.0% Jan -0. 3.5% 2. chg. chg. seasonally adjusted Jan -0.Snapshot of Economy and Interest Rates Economic Summary Current Previous Period Period Economic Growth Real GDP growth Annual rate.2% New housing starts Feb Thousands of units.4% 2-Year Treasury Note Feb -0. 1.525 annualized Purchasing Management Index Feb Institute for Supply 52. constant dollars Retail sales \$ billions Industrial production index Change. -1. chg. 2. monthly and annually Leading indicators index Change.

2005 2.3% Year Ago 4. 2006 .33%(M) 5. 1.85% 2.97% 4.10% 3.39% 4.1. 1.47% 4.45% Jan. 2007 Annualized Returns Since Jan.10%(M) 4. 2006 Mar.89% 3. 1.0307 Annualized 3.93% 3.42% 4.50%(M) 5. 2005 1.91% The money market fund index Jan. 1.1.78% 2.5% Jan 4.83%r 4.8% Mar 27 Feb 13 41 days 42 days Mar '06 37 days Top Investment Performance Benchmarks Quarterly/Monthly Return Date Index 288.85% Jan. 1. 2007 Feb.14%(Q) Jan. 2007 April 1. 1. 2007 Feb.GDP price deflator IV Q '06 III Q '06 Annual rate 1.29% 2. 1. 2006 Jan.85% 4.7% 1.51%(Q) 5. 2006 Jan.97% 4. 2006 2.87% Jan.83% 4. 1.4755 304. 1.81% 4.3628 302.6685r 306. 2006 2.9% Unemployment rate BLS Other Money market fund maturities Average portfolio maturity (Money Fund Report Averages TM) Feb 4.6% Year Ago 3.51% 4. 2007 Mar.2210 303. 1.02% The Public Investor 10bill index Annualized Returns Since Date Average Return 3.99%(Q) 5.82%(M) 5.85% 4.

53 3.11% 4.April 1.38 5.29 4. dealer-placed.88 4.93 5.56 2.87% 7-day yield 5. 2006 4.93 4.07 4.50 4.14% 03/30/07 5. 3 months Bond Buyer 20-bond municipal index Tax-exempt notes Relative Value Yield Chart .91 4. 2007 Rate Fed funds CDs: Three months CDs: Six months Year Ago 4.25 3.98% Maturity (Days) 30 S&P Rated LGIP Index Date March 23 .84 4.79 4.47% 30-day yield 5.52 Key Rates: Cash Markets BAs: One month T-bills: 91-day yield T-bills: 52-week yield Commercial paper.33 5.28 5.30 4.90 5.