Financial Modelling is basically a process that takes place in the field of corporate finance. This is a process with the help of which, a number of companies are able to piece together a financial representation of, either one particular department, or the company as a whole. These representations are popularly known as financial models and the various attributes of these models include, calculations and recommendations based on all the data that has been gathered. Financial models also sometimes summarize their entire contents, for the benefit of Investment Managers. Financial modelling is supposedly a skillset that every financial analyst must have as a part of their repertoire. If you happen to be a finance aspirant, then it is important to learn this skill in order to be a part of this financial services industry.
One of the very important things, required of all finance professionals is the ability to function with MS Excel. Many candidates in spite of having various decorated certifications like CFA, MBA or CA, still are unable to work with MS Excel and thus fail miserably in their prospective interviews. Learning to work with MS Excel is an essential part of financial modelling and this is why it makes for a great decision for any finance professional. For instance there will be investment giants like, Goldman Sachs, who will require you to determine the fair stock price of a company, solely on the basis of their financial statement. You will be able to deliver perfectly only if you have learned the ropes of financial modelling as a part of your formal education.
Learning financial modelling has many advantages for you, one of which includes being able to understand the fundamentals of a company, thoroughly. It is only with financial modelling that you will be able to distinguish the factor responsible for the end results of the various verticals and departments of a company. For instance the term ‘Marketing Expense’, a trained professional would perfectly understand that it is a result of various factors like channel wise budgets, conversion funnels, customer acquisition and so on. Learning this skill set can not only achieve excellence for you as a Financial Analyst, but will also widen your horizons in terms of career opportunities. With this skill you can look into various fields like Investment Banking, Equity Research, Fixed Income Research, Risk Management, Credit Rating, Portfolio Analysis, and Credit Rating and so on.
Financial modelling happens to help with any type of job role, especially when it comes to analysing the company. It gives you a greater advantage, than the many professionals who reportedly know nothing about a financial model. Mainly due to its versatility, this happens to be one skill you can put to use when valuing a company, or analysing a merger or acquisition, or issuing shares, secondary sales or during an Initial Public Offering. HR managers today look for professionals with a skill set, which includes skills like financial modelling. This skill can be learnt more elaborately through professional training courses, like the EY Prodegree Financial Analysis courses that is offered by Imarticus Learning.