1.1 Introduction and Overview of Structures

Recall that an earlier course covered some common types of calculations and structures that require only arithmetic to implement. These were:

  • Growth forecasting.
  • Ratio-driven forecasting.
  • Logic reversals.
  • Sensitivity analysis techniques in time-based models.
  • Corkscrew structures (including implied or reverse corkscrews).
In this course, we discuss further calculations and structures that are common in many types of models, but which require the functions covered earlier in order to implement.

Chapter 1 covers:
  • The creation of summary areas
  • Further comments on conditionality and using flag variables.
  • Methods to create models that use historical data, and which can be updated as time progresses.
Chapter 2 covers:
  • Tapering and interpolation calculations.
  • Further comments on parameter reduction
  • The use of scaling factors.
  • The use of triangles to allocate across time.
Chapter 3 covers:
  • The principles involved in waterfall calculations, and their general applications.
  • The calculation of more complex waterfalls, notably those which are often used for capital return targets in private equity profit sharing.
Chapter 4 introduces some of the basic principles in creating integrated financial statement forecasting models, notably that of dynamic adjustments based on balance sheet items.
Scroll to Top