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Financial

Modeling

Financial Modeling

Financial Modeling

F inancial Modeling is a key skill with application in several areas within banking and finance industry as well as

within corporations. In financial modeling you learn to gather historical information on companies and analyze

company / industry performance on various financial parameters. This analysis is then used to build a companies

financial model, which in turn is key to projecting a future financial performance. Based on this model companies /

investors can arrive at a suitable valuation for the companies.

Individuals with these skills can work in the areas of investment banking / equity research/trading, financial KPOs

that are assisting investment bankers / equity research firms, financial advisory firms, project finance and in the area

of performance tracking and MIS for companies themselves.

Career Options in Finance Sector

Financial KPOs:

Knowledge Process Outsourcing (KPO) has emerged as a new fast growing business sector. Lot of finance companies currently outsource research and financial analysis functions to KPOs because it is cost effective for them. When outsourcing of financial research started a few years back it was considered as low complexity back room information support for Investment Analysts from buy side and sell side firms. This activity has now moved up the value chain considerably and the world of outsourced research has evolved significantly for many reasons. Among them some of the prominent reasons are:

g

Regulatory

changes

that

are

pushing

for

transparency.

4

Investment Banks doing research were not

considered being completely unbiased.

 

g

Need for Investment Banks to remain profitable.

4 Research expertise was earlier used as

marketing and promotional tool by Investment banks to attract clients. Research was basically a cost center activity. With most investment banks under profit pressure, and research no longer a marketing tool, investment banks have started strategic initiatives to outsource research to independent research institutions who are capable of doing at a fraction of the cost.

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The above trend has led to the growth of the

outsourced research activity; many of these firms are

located in India. Some of the well known firms in this

field who established their presence are: Adventity,

Gridstone Research, AMBA Research, Evalue Serve,

Copal Partners, Irevna, Capital IQ, DE Shaw, Aranca,

Netscribes, ICRA, CMIE, Capital Markets, Dwan A Day

Analytics, Care Ratings, Value Notes, Viteos Capital

Markets. Research work carried out by these firms

includes:

g

Equity Research:

Detailed research to

recommend buy/sell price on companies under

coverage. There are over 90,000 listed stocks on

global exchanges and each one have to be valued

on a regular basis.

 

g

Financial Modeling & Valuation:

Create

Excel based models to get the understanding of

business drivers, incorporate assumptions, risk

factors and possible valuation of company.

g

Forensic Analysis:

In-depth scrutiny and

analysis of Company cash flows and financial

statement to verify the authenticity of disclosures,

to prevent malpractices like Enron, Worldcom and

Satyam.

g

IPO Analysis: Analyze the attractiveness of IPO.

g

Sector

Research:

Complete

macro

understanding of the sectors to identify investment

opportunities. The sectors covered are typically Financial Services, Retail, Information Technology & Telecommunication, Business Services, Oil & Gas, Metals & Mining, Energy, Utilities.

g

Screening

&

Profiling:

Identifying

Target

companies for mergers , acquisitions or sell out.

g

Competitive Mapping & Analysis: Analysis to benchmark performance with peers in the sectors.

g

Market Activity Research: Carry out research on various stock exchanges, commodity exchanges on the movements and predict future trends.

g

Mergers & Acquisitions Transaction

Analysis:

Research and Valuation Models to

arrive at transaction valuation for companies preparing to merge or acquire.

g

Data Collection and Aggregation Services:

Information gathering from various sources, organizing the data collected, validating the data and providing the data to analysts.

Financial Analysts in Corporations:

Companies need to analyze their own finances, build financial models for their own projects and hence often employ analysts within the company. There are also financial advisory companies who provide these services to corporations as an outsourced model.

Most fresh graduates in these firms start as research assistants and assist senior analysts in creating reports. As a research assistant one has to collect, and normalize data, build the financial model, make the report and track the announcements / developments on the company.

These firms need candidates who have strong analytical skills and specific domains knowledge in financial analysis and modeling.

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Project Finance:

In simple words Project Finance is financing of long- term infrastructure and industrial projects. It involves assessing the financial viability of a project and creating a funding plan through debt and equity components. Apart from people who have in depth understanding of the specific project and business, it requires people who can create a financial model and help build the financial plan for the project.

IMS Program

Program Objective

The objective is to groom the candidates for entry level jobs in the finance sector which require financial analysis and modeling skills. The program aims to impart the necessary skills required to perform the role of a Financial Research Analyst. The program equips students with the practical skill sets required to perform financial analysis, modeling and valuation through Excel.

Program Content:

The program comprises the following courses. Each course includes topics which are relevant providing conceptual as well as practical knowledge required for the job.

g

Accounting Fundamentals

g

Economic Analysis

g

Financial Management

g

Financial Markets

g

Excel Proficiency

g

Financial Modeling & Valuation and

Sector overview

g

Report Writing

g

Accounting Fundamentals

g

Financial Modeling & Valuation and Sector Overview

4

Introduction to Accounting

4

Basic Accounting Principles

4

Introduction to Data Gathering and

4

Income Statement

Financial Modeling

4

Balance Sheet

4

Prepare an Income Statement

4

Cash Flow Statement

4

Prepare a Balance Sheet

4

Financial Ratio Analysis

4

Prepare YTD Cash Flow Statement

4

Reading the Annual Report

4

Prepare Geographic Revenue Sheet

4

International Accounting Standards

4

Prepare Segment Revenue Sheet

 

4

Prepare Cost Statement

g

Economic Analysis

 

4

Prepare Debt Sheet

4

Introduction - Relevance of Economics

 

4

Analyze Revenue Drivers

 

4

Microeconomics

 

4

Forecast Geographic Revenues

 

4

Macroeconomics

 

4

Forecast Segment Revenues

g

Financial Management

 

4

Forecast Cost Statement

4

Time value of money

4

Forecast Debt

4

Long term financing

4

Proforma Adjustments

4

Cost of capital

4

Income Statement - Compute Margins

4

Risk and return

4

Forecast Income Statement - Part A

4

Capital Structure

4

Forecast Income Statement - Part B

4

Dividend Policy

4

Balance Sheet -Compute Ratios

4

Working Capital Requirements

4

Forecast Balance Sheet

4

Equity and Industry Analysis

4

Quarterly CFS and schedules

g

Financial Markets

 

4

CFS Projection

4

Financial Markets & Intermediaries

4

CFS Projection - Part A

4

Equity Market Structure

4

CFS Projection - Part B

4

Equity Market Analysis

4

Basics Of Valuation

4

Portfolio Management

4

Valuation- Discounted Cash Flow Method (DCF)

 

4

Valuation Relative Valuation

g

Excel Proficiency

 

4

Valuation Assumptions for Valuation Model

4

Formatting of Excel Sheets

4

Prepare Valuation Model

4

Use of Excel Formulae Function

 

4

PrepareValuationModel -PartA

 

4

Advanced Modeling Techniques

4

PrepareValuationModel -PartB

4

Data Filter and Sort

 

4

PrepareValuationModel -PartC

 

4

Charts and Graphs

4

Prepare Presentation Sheet(PS)

4

Table formula and Scenario building

4

PreparePresentation Sheet(PS) -PartA

4

Introduction to macros

 

4

Prepare Company Overview (CO)

4

Prepare Company Overview (CO) - Part A

4

Sector Overview

 

g

Report Writing

 

4

Report Writing

 

4

IMS Certification Criteria :

Candidates will be granted the certification only if they fulfill the following criteria.

Requirements for IMS Certification:

g

Education:

Candidate

must

be

at

least

a

graduate or equivalent with minimum 45% marks.

The

candidate

should

undergo

the

training

program of IMS Proschool.

 

g

Examination:

The candidate has to pass the

certification exam conducted by IMS Proschool. The candidates will be evaluated on their performance in the internal tests, online exercises, report writing and final examination. Final Exams are normally conducted on last Saturday of every Feb, May, Aug, Nov.

g

Experience: The candidate has to complete one year of work experience either pre or post Certification exam in case he/she is a graduate.

Who should do this Program?

g

MBAs/CAs who would like to add hands on / practical skills that they would need in any of the jobs in the Financial Sector.

g

KPO employees who would like to enhance their skills and move into more analytical jobs with better compensation potential.

g

Graduates who are not working in KPO's but interested in working for KPO

g

Economics Graduates & Post Graduates who like to work with data and have good analytical skills and would like to build a career in finance.

Application Details

Distance Learning Program Regular

Academic Cycle

The Program is available throughout the year.

Where is the program offered?

The program is an Online Program.

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Selection Process

Candidates will be admitted on the basis of their application only.

Eligibility

The candidate should be a graduate from any stream with minimum of 45% in graduation. Students in their final year may also apply

How to Apply?

Download the Application Form and submit the duly filled application to The Financial Modeling Co- ordinator, at the IMS Proschool Centre Mumbai. OR Enrol Online from our website.

Program Fees

The Program fee is Rs.12000/-

*(inclusive of one time exam fee). * There is a repeat exam fee of Rs.3000/- for every re-attempt

Classroom Program

Academic Cycle

The Program commences twice in a year in the month of April and October.

In which City is the program offered?

The program is offered in Mumbai, Pune and Kolkata

Selection Process

Candidates will be short listed on the basis of their application. The short listed candidate will be called for a

Personal Interview.

The exact date and time of the

interview will be communicated to the student via email.

Eligibility

The candidate should be a graduate from any stream with minimum of 45% in graduation. Students in their final year may also apply.

How to Apply?

Download the Application Form and submit the duly filled application to The Financial Modeling Co- ordinator, at the IMS Proschool Centre where you would like to attend the Program.

Program Fees

The Program fee is Rs. 70000/-

*(inclusive of one time exam fee).

About Proschool

At IMS, our goal for the past 33 years has been simple - Build a long term successful career for our students. IMS Proschool is an extension of the same mission although the route is different.

Economic growth over the past decade has created new opportunities for students and IMS Proschool is helping students tap these opportunities. How?- Growth in almost every sector has created a shortage of skilled manpower and that we have heard from almost every CEO by now (read news stories). IMS Proschoolís goal is to provide these industry relevant skills to its students in the shortest possible time, get them quality jobs that give them quality experience and create a long term career for them. In the process, we will also help the industry solve its manpower issues.

What are the challenges?

One, students need ìmeaningful studiesî that give them skills they can actually use. How often do you see students who have the required degree or the necessary qualification for the job but are still not able to perform at work. This is because there is a huge gap between what they have learnt and ground reality.

Two, there are several jobs in the market today but few offer a long term career. Lets take retail as an example;

50,000 new people will be hired this year; over 45,000 will work as customer relationships executive and most will not get a chance to acquire skills to be department managers and will be stuck.

Three, a fallout of above is that these young guys are not able to build their profile and therefore neither do they get higher jobs nor are they able to get into quality B-Schools. So profile building is an important issue in planning a long term career.

How IMS Proschool addresses these challenges?

At IMS Proschool, firstly, we are selecting career opportunities carefully. We are targeting only those jobs, which will give our students quality experience and therefore help them build their resumes. As highlighted earlier, this is crucial for either joining good B-Schools later or for career growth within the company.

Secondly, the curriculum is designed by practitioners with inputs from academics rather than the other way round. The programs are very hands on, so you will be productive on the job from Day 1. The results are already beginning to come, we are already the largest trainers for the financial planning industry itself and in retail most of our graduates are directly joining as department managers.

our graduates are directly joining as department managers. http://imsindia.com/proschool MUMBAI IMS Proschool 67,

http://imsindia.com/proschool

MUMBAI IMS Proschool 67, Jayant Building, Jain Hostel Road, Near Sion circle, Sion - west, Mumbai - 400022 Email ID : proschoolmumbai@imsindia.com Tel. No.: 022-65285393/94

NASIK IMS Proschool 3, 4 Anandrupa Apartment, Next to sachi TVS Showroom, Parijatnagar, Mahatmanagar, Link Road, Nasik Email ID : proschoolnasik@imsindia.com Tel. No.: 0253-6576517

PUNE IMS Proschool 1229/A, Narhari, 1st Floor, Fergusson College Road, Next to Sagar Arcade, Deccan, Pune - 411004 Email ID : proschoolpune@imsindia.com Tel. No.: 020-65004735/36

KOLKATA IMS Proschool Everest House, Flat No # 1 G, 46 C Jawahar Lal Nehru Road, Kolkata - 700071. Email ID : proschoolkolkata@imsindia.com Tel. No.: 033-40035449/50

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