Financial Modelling is a very important skill that is required in many different kinds of professions, such as equity research, investment banking and all other fields that involve financial analysis. However, the things become pretty confusing while selecting the appropriate course of the career. Presently, there are thousands of universities or educational institutes who offer Financial Modelling courses in both regular and distance learning modes.
So, the real question is how to select the best financial modelling course for a bright career? In this article, we will tell you about some important factors that you should consider for making a right choice.
1. Full training on advanced excel
In order to create good financial models, there is a requirement for sound excel skills. So, you need a course that can teach you about all these advanced excels tools. Some of the must-learn tools for the financial modeling are Hlookup, Vlookup, pivot tables, graphs/ charts, scenario building, etc.
In addition, you should also learn about some advanced skills, such as scenario analysis, Macros/VBA, sensitivity analysis, circular referencing, etc. SQL is a crucial tool to run queries and having its knowledge will give you some extra advantages in your career. So, you should keep these things in mind while selecting a Financial Modelling course.
2. Perfect blend of theory and practical
There is no doubt that training about the financial model needs to be highly focused on practical cases, but no one can deny that theory also plays its part in boosting its concepts. The basic things like Financial Management, Corporate Finance, Time Value of Money, and Macroeconomics are pretty important as proficiency to build models in different circumstances. So, you need a strong base for the main concepts.
The individuals who lack in it will find it tougher for figuring out the macro level factors like changes in the weighted cost of capital & business cycle, seasonality of revenue, fluctuation in tax rates & interest, etc. Selecting a course that has a perfect mix of practical knowledge and theory will really boost up your career.
3. How companies are valued by modelers in real life
The main focus of the Financial Modelling is to give the students some hands-on skills that will allow you to go through worst scenarios. So, the training in the course should target the handling the practical life cases in the Equity Research or Investment Banking fields.
The increasing number of projects and practical circumstances will allow you to work better while creating models on the job. You will complete knowledge about the issues that might create issues. It will allow you to deal with the tricks and hacks for surmounting those glitches.
4. All types of valuation should be included
The majority of the financial modelling courses targets only on a single method of valuation, i.e. the Discounted Cash Flow method. It is the most commonly used methods as compared to the other valuation methodologies, such as Comparable Company Analysis, Sum of the Parts, Precedent Transaction Analysis or Leverage Buyout Analysis that are equally useful in different circumstances.
A brief information about all these methodologies and explanation related to their application will offer you a holistic view of the things as compared to just getting knowledge about one-dimensional knowledge.
5. Exposure to different types of models- Credit Analysis, M&A, Project Finance
The scope of financial modelling is widespread as it is not only utilized for arriving at the intrinsic value of the stock, but also used for predicting the internal rate of return as well as cash flows in Project Finance. It works in a similar way for credit risk analysis where the financial model used for evaluating the cash expected over the future years and finding out whether they are capable of covering the principal payments and interests. On the other hand, the M&A models targets on the valuation of the target organization, estimating the revenue, evaluating the payment options and cost synergies of both the acquirer as well as the target.
While selecting a financial modelling course, you should target learning as many types of models are possible. Some of our readers might be looking to specialize in one type, but your brain should be open for learning other opportunities as well.
6. Section-wise training is offered
In order to create a wonderful financial model, it is important that one should be aware of the business model of a specific organization. It also demands in-depth knowledge about the dynamics of a particular sector. The cost drivers and revenue of an organization from telecom industry are pretty different from the IT field. A model of Infosys will deal with the full-time resources, utilization rates, billing rates, etc., whereas a model of Reliance Jio will deal with the subscriber base, churn rate, ARPU, etc. Therefore, the exposure to a single sector and not focusing other ones will not do justice with the training of financial modelling. So, it is ideal that you should select a course that provides adequate coverage about some of the prominent fields if all are not possible.
7. Learning about both domestic and global organizations/ financial statements
It is fascinating to learn about the financial models of some large multi-national companies like Accenture, Apple, and Infosys because all these firms include divisions & sub-divisions that allow the beginners to learn financial reporting, understanding the effects of worldwide factors on the company operations and analyzing the revenue mix. However, you should also have some knowledge about the domestic organizations and their operations if you want to be an expert financial modeler.
You should be aware of the pattern of financial reporting of domestic firms, the working on the domestic rate, the divisional break-up, and tax rate cycle. So, you should select a financial modelling course that includes the coverage of both MNCs and domestic companies.
8. Practice Opportunity
You might have heard it multiple times that practice makes a man perfect. So, the best way to attain perfection in financial modelling is through adequate practice. That’s why your course should have enough practice opportunities. You can sharpen the acquired skills with the help of self-improvement in the processes via case studies, capstone projects and other practice models of organizations across the different sectors.
9. Placement assistance should be provided
There is a need for making a mark through proper dedication and hard work in the actual corporate world. However, placement guidance is required in the right way. The main aim of the Financial Modelling courses shouldn’t be only limited to just certification as it should focus on creating industry experts.
They should think one step further and brush up the students for interview training, resume writing, mentoring, and group discussions. Keep these things in mind while selecting your course.
10. Flexible learning
Presently, we are living in the age of flexibility and that’s why the students look for a course that allows them to continue their present work. So, select a financial modelling course that has a perfect combination of learning pattern. Nowadays, you can find lots of institutes that have courses that not only provide classroom learning but also gives online study materials and virtual learning to the students.
11. Instructors should be highly qualified and have adequate industry experience
It doesn’t matter how good is the syllabus of financial modelling if it is unable to offer knowledge in the best practical manner. Before choosing the course, you should make sure that the instructors are highly qualified people such as MBAs, CFAs, CA and have enough experience in the field of financial modelling. You should also consider the availability of the instructors for proper guidance and doubt-solving.
12. Certification should be given by the leading industry bodies
It will never be sufficient to just do a financial modelling course. The course should be credible in the market and certification should be given by a well-known and reputed industry body. You can find lots of professional modelling courses in the market who offer certification from the Bombay Stock Exchange, National Exchange, and other leading corporate companies.
Certification is a perfect method for guaranteeing the standard of knowledge, curriculum quality, and its industry relevancy. So, while selecting a course that ensures that they have an association with a leading industry certification.
Career is an important part of the life so you should pick it in a smart way.
There is a crucial part played by the financial modelling skills in the professional world. All the profiles in the financial analysis demand both conceptual as well as practical knowledge of financial modelling. That’s why you shouldn’t be misguided and make an accurate selection. It is due to the fact that confidence and in-depth knowledge can help you in making the cut above others.