Building Financial Models : A Guide to Creating and Interpreting Financial Statements

by Tjia, John S.

• ISBN13: 9780071402101
• ISBN10: 0071402101
• Edition: 1st
• Format: Hardcover
• Copyright: 2003-12-19
• Publisher: McGraw-Hill

Summary

Financial modeling is essential for determining a company's current value and projecting its future performance, yet few books explain how to build models for accurately interpreting financial statements. Building Financial Models is the first book to correct this oversight, unveiling a step-by-step process for creating a core model and then customizing it for companies in virtually any industry. Covering every aspect of building a financial model, it provides a broad understanding of the actual mechanics of models, as well as their foundational accounting and finance concepts.

Author Biography

John S. Tjia is a founding partner in TMG Associates, LLC, a consulting firm with investment and commercial banking clients that specializes in financial modeling for corporate finance. Tjia is the former vice president in charge of the Models Group at JPMorgan Chase, and led the team that was responsible for designing and developing several generations of the analysis and execution models used by the firm's investment banking division worldwide. He has also taught modeling and valuation classes to hundreds of analysts and associates.

Table of Contents

Introduction	v
A Financial Projection Model	1	(12)
Design Principles for Good Model Building	13	(10)
Starting Out	23	(24)
Your Model-Building Toolbox: F Keys and Ranges	47	(16)
Your Model-Building Toolbox: Functions	63	(46)
Guerilla Accounting for Modeling	109	(10)
Balancing the Balance Sheet	119	(26)
Income Statement and Balance Sheet Accounts	145	(10)
Putting Everything Together	155	(38)
The IS and BS Output Sheets	193	(6)
The CF Sheet	199	(10)
Ratios: Key Performance Indicators	209	(18)
Forecasting Guidelines	227	(10)
The Cash Sweep	237	(20)
The Cash Flow Variation for Cash Sweep	257	(14)
Recording Macros	271	(16)
On-Screen Controls	287	(10)
Bells and Whistles	297	(18)
Writing a Macro in Visual Basic for Applications	315	(14)
Index	329