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You're reading from  Hands-On Financial Modeling with Excel for Microsoft 365 - Second Edition

Product typeBook
Published inJun 2022
PublisherPackt
ISBN-139781803231143
Edition2nd Edition
Concepts
Financial Technology
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Author (1)
Shmuel Oluwa
Shmuel Oluwa
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Shmuel Oluwa

Shmuel Oluwa is a financial executive and seasoned instructor, of over 25 years, in a number of finance related fields, with a passion for imparting knowledge. He has developed considerable skill in the use of Microsoft Excel and has organised training courses in Business Excel, Financial Modeling with Excel, Forensics and Fraud Detection with Excel, Excel as an Investigative Tool, Accounting for Non-Accountants, Credit Analysis with Excel amongst others. He has given classes in Nigeria, Angola, Kenya and Tanzania but his online community of students covers several continents. Shmuel divides his time between London and Lagos with his pharmacist wife. He is fluent in 3 languages. English, Yoruba and Hebrew.
Read more about Shmuel Oluwa

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Building assumptions

A financial model can be defined as a collection of mathematical assumptions for the purpose of projecting the results, financial position, and cash flow of a business into the future, often with the aim of arriving at value for the business.

Building reliable assumptions is critical to the success and viability of your model.

The following is a quick checklist. Your assumptions should be as follows:

  • Based on actual historical figures
  • Realistic
  • Clearly explained
  • Easily verifiable
  • Properly documented
  • Visually distinguishable in your model (usually with a different font) from calculated cells

Let's dive deeper into the history and foundation of building assumptions.

Historical data

The foundation for building assumptions that we will use to forecast the company's results for the next 5 years is the company's historical financials. You will therefore need to obtain 3 or 5 years of the company's financial...

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Hands-On Financial Modeling with Excel for Microsoft 365 - Second Edition
Published in: Jun 2022Publisher: PacktISBN-13: 9781803231143
© 2022 Packt Publishing Limited All Rights Reserved

Author (1)

author image
Shmuel Oluwa

Shmuel Oluwa is a financial executive and seasoned instructor, of over 25 years, in a number of finance related fields, with a passion for imparting knowledge. He has developed considerable skill in the use of Microsoft Excel and has organised training courses in Business Excel, Financial Modeling with Excel, Forensics and Fraud Detection with Excel, Excel as an Investigative Tool, Accounting for Non-Accountants, Credit Analysis with Excel amongst others. He has given classes in Nigeria, Angola, Kenya and Tanzania but his online community of students covers several continents. Shmuel divides his time between London and Lagos with his pharmacist wife. He is fluent in 3 languages. English, Yoruba and Hebrew.
Read more about Shmuel Oluwa

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