Basic Financial Modeling – Part 2 of 3

Below is a free-to-watch video module on basic financial modeling.  A financial model is a tool used to forecast a business’s results and is designed to be able to evaluate multiple scenarios.  Investment bankers are expected to be experts in financial modeling.  This video is two of three video modules in our series: Basic Financial Modeling.  You can watch part one here.  Click here for part three.

This video was taken from our Certified Investment Banking Associate (CIBA) program which is the investment banking certification and training program hosted on our platform.

Video Transcript Summary of Basic Financial Modeling:

  1. The first step is to forecast Income Statements (IS) to the EBITDA.
  2. Forecast key balance sheet items.
  3. Setup cash flow statement including operating and investing activities.
  4. Link capital improvements from cash flow to PP & E line  on the balance sheet and link depreciation on the balance sheet to its line on the IS.
  5. Perform depreciation calculation on IS.
This is part two of a series on basic financial modeling.  Click here for part one of this series.   Click here for part three.

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