- Learn important concepts in financial evaluation and data analysis, and link these to the use of functions.
- Master the most important functions in Excel.
- Create a basis to develop further knowledge of specialised and advanced functions.
- Overview. This course covers many of the core types of calculations required in finance and economic modelling and the most important Excel functions related to these. It provides explanations and examples of their application to general modelling and financial evaluation. It provides a solid basis for many practical situations.
- Practical Work and Exercises. Readers are expected to build simple examples for themselves as they follow the text. The course also contains downloadable data sets or simple models that allow a reader to do this practical work without having to enter large sets of data or repeat previous steps.
- Quizzes and Exercises. There are 5 Quizzes, which are placed throughout the course. Some require the construction of small models or parts of models.
- Growth formulae and present values. Measuring growth. Classical and logarithmic measures. Growth calculations. Inflating and discounting. Time-period conversions.
- Interest rates and calculations. Time-value of money. Bond yield. Yield curve. Risk premia. Interest compounding methods and formulas. Links between interest compounding and model time periods. Accruals. Bootstrapping. Yield curves.
- Annuities and discounting. Discounted cash flow. Annuity formulas. Terminal value calculations. Capitalisation rates.
- Economic Evaluation. Breakeven, time to breakeven, cumulative breakeven, discounted breakeven. Calculation of returns. Internal rate of return (IRR). Uses and limitations. Discounted cash flow, net present value (NPV). Comparison of IRR with NPV.
- Loans and mortgages. Payback amounts and periods. Capital versus interest. Implied interest rates.
- Depreciation and amortisation. Methods and calculation approaches. Physical and financial assets.
- Cost of capital, risk and return. Risk and return. Portfolio effects. Correlation and diversification. Markowitz theory. Capital Asset Pricing Model. Cost of equity.
- Ratio analysis and portfolio analysis. Key categories of ratios. Ratio definitions and variations. Dupont analysis. Multi-variable Dupont analysis. Piotroski F-score. Variance analysis. Kaplan-Schweser decomposition.
- 5 quizzes.