Financial Modeling Training - Do You Need It?

I frequently get e-mails from WSO members and random visitors asking me which financial modeling training program is the best to prepare them for investment banking, private equity, hedge funds, etc...to be honest, many of you don't need any financial modeling courses since you will likely get that training once you start, along with all the fancy the financial model templates, etc. In fact, you can find plenty of free basic modeling resources online...

However, for candidates that want that extra bit of edge for their investment banking interviews, or people like me that had no finance background from a liberal arts college, it can be valuable. Personally, I wish I had taken one of these before my analyst stint at Rothschild because in my first year I was in a world of pain. I was expected to model in excel as fast as Wharton finance majors with about 10x as much experience as me...a few weeks of training wasn't going to be enough to close that massive gap in skill.

The Best Financial Modeling Self-Study Courses

Most of the live IB bootcamp courses (even for our partner, Wall St. Prep) are close to $1,000, if not over...so I think the cheaper self-study method is a good option for those that are self-motivated.

For several years now we've partnered with Wall St Prep and recently they have released an even better version of their online course software that is very impressive and we're very excited about. The main purpose of this post is to highlight their program and compares it to some of the best competition out there (BIWS and Wall St Training), so you can see why we've backed Wall St Prep as our partner of choice. All three programs do a GREAT job of preparing you for what you'll face as an investment banking analyst, but I think WSP is a step above the rest (and also is conveniently, the most reasonably priced).

In full disclosure, WSP is an affiliate of WSO and it is one of the ways this site generates revenue. But if any of you know me, I wouldn't risk my reputation with the WSO community unless I truly believed everything in the chart below is true. Without further ado, here is the side by side comparison based on my research! If you have any corrections, feel free to shoot me a PM.

-Patrick Curtis, CEO & Founder, WallStreetOasis.com

wall street prep logo breaking into wall street logo wall street training logo

How widely used is the program?

Wall Street Prep Breaking Into Wall Street Wall Street Training

Wall Street Prep’s live training and online courses are used by more than 150 investment banks, consulting firms, investment funds, Fortune 1000 firms and top business schools. Many of these companies require their analysts and associates to go through the Premium Package.

Breaking Into Wall Street has virtually no corporate or university clients to my knowledge.

Wall Street Training conducts live and online training at some financial institutions and universities, though they have a smaller presence than WSP in the U.S. It’s my understanding that a significant part of their live training is conducted in Asia and their online courses are not widely used among corporate clients.

checkmarkEdge: Wall Street Prep's online courses are the most widely used among top investment banks.

Program Price

Wall Street Prep Breaking Into Wall Street Wall Street Training

$425

WSO users can get the Premium Package for $425 with coupon code WSO15, which is 15% off of the regular price of $499. I'm giving you this discount because I think the WSP program is the best around (read on to see why).

$497

BIWS Premium is $497, and offers the same topics as WSP’s Premium Package: Financial Statement Modeling, DCF, LBO, Comps and M&A.

$1,850

They don’t offer a package comparable to WSP’s Premium Package or BIWS Premium. Buying packages 2-6 would give you financial and valuation modeling training for a whopping $1,850.

checkmarkEdge: With the WSO discount, Wall Street Prep's Premium Package gives you the most bang for the buck.

Who's behind the content?

Wall Street Prep Breaking Into Wall Street Wall Street Training

Wall Street Prep’s content development team is a group of investment bankers ranging from Sr. Analysts to MDs. They come from firms such as JPM, MorganStanley, Merrill Lynch, UBS, Barclays, Jeffries, Credit Suisse, and FBR.

All BIWS courses are essentially authored by one person, a former UBS investment banker.

WST’s live training is conducted by team of finance professionals from firms such as Goldman Sachs, TIAA-CREF, ThomasLloyd Capital and GE Capital. It appears that all of their self-study courses are authored by one person.

checkmarkedge: Wall Street Prep's team of online instructors has wide-ranging industry and product experience.

Excel Add In

Wall Street Prep Breaking Into Wall Street Wall Street Training

The Premium Package comes with free access to Boost (normally $199), an Excel add-in geared towards increasing financial modeling efficiency. Boost also gives you access to Wall Street Prep’s entire library of Excel model templates.

Courses do not include an Excel add-in.

WST'sprograms utilize their free WST Macros Excel-Add in, designed to further automate Excel. It has much less functionality than Boost.

checkmarkedge: Wall Street Prep's Boost add-in for Excel is a much more powerful and useful tool.

Certification in Financial Modeling

Wall Street Prep Breaking Into Wall Street Wall Street Training

The Premium Package includes certification in financial and valuation modeling. Many of their corporate clients use the certification exam as a required part of their analyst training program.

BIWS Premium includes financial and valuation modeling certification.

WST offers financial and valuation modeling certification to users who complete all of their individual financial modeling, valuation, M&A and LBO courses. To my knowledge, their corporate clients do not use this certification process for analyst training.

checkmarkedge: Wall Street Prep's certification is actually used as a training requirement by investment banks.

Ongoing live webinar lessons

Wall Street Prep Breaking Into Wall Street Wall Street Training

Premium Package users get free access to live webinar “teach-ins” in which WSP instructors cover new and emerging topics in the investment banking industry.

The BIWS instructor does not offer live webinar teach-ins.

No teach-ins.

checkmarkedge: Wall Street Prep's ongiong teach-ins are an incredibly useful addition to their online program.



Who it Can Help? Candidates in Investment Banking Interviews

I do think that alongside with WSOs Investment Banking Prep Package, a financial modeling training program can take your understanding of 3 statement modeling, M&A modeling and LBO modeling to another level. Investment banking interviews are much more competitive nowadays (from what I hear) than when I was applying, so it's tough for me to say you "need" a modeling course, but I will just say it would have helped me in my ib interviews for sure. Of course, none of these resources are cheap, so you have to make sure that it makes sense for you to spend the $ and that you will put in the time to actually learn the financial modeling skills to make a difference.

Wall Street Prep 15% Discount Below Promo

Wall Street Prep is the premier financial modeling training program (used at actual investment banks for analyst training) and they've agreed to give WSO members an exclusive deal to the self-study financial modeling course packages.

Get 15% Discount and Become a Modeling Master


If you get the popular premium package (includes both online video training AND physical materials), that is over $70 off the normal price. As a quick overview, here is some of what is included in this comprehensive package:

Step-by-step video courses (40+ hours)

  • Financial Statement Modeling
  • Discounted Cash Flow (DCF) Modeling
  • Leveraged Buyout (LBO) Modeling
  • Accretion / Dilution (M&A) Modeling
  • Comparable Company & Transaction Modeling


Helpful Documents

  • Excel Model Templates
  • Supporting case study documents
  • Excel Desktop Tipsheet


  • The amount of lessons and detail you get with this package is pretty incredible. You can really accelerate your learning and go at your own pace with this self-study course. It has both online video training and templates as well as physical books, so you can learn whatever way is best for you.

    This Premium Package covers so much material, we thought we'd provide a more detailed course outline below so you can see the skills you would be developing under each main topic...or you can check it out and take advantage of this special discount right over at at Wall Street Prep by clicking here.

    .......................................................DETAILED COURSE OUTLINE BELOW......................................................

    Financial Statement Modeling

    Introduction
    • Learn to integrate assumptions and drivers into financial models
    • Excel techniques and shortcuts for financial modeling
    • Learn formatting and structural best practices
    • Learn Implications of new FASB and IFRS regulations on financial models
    Project the core financial statements
    • Income statement, Balance sheet and Cash flow statement
    • Supporting schedules: Working Capital, Deferred Taxes, PP&E / Depreciation, Intangible Assets, Retained Earnings and Debt & Interest
    • Financial Ratios Output Sheet
    Error-Proofing
    • Learn best practices for check models for errors, accuracy and integrity
    • Check and fix circular reference and iteration problems (#REF)
    • Insert circularity toggles and learn other tools for formula auditing
    • Customize Excel for effective modeling using macro shortcuts
    • Balancing the model and inserting automated crosschecks
    Presentation and Scenarios
    • Perform sensitivity analysis using data tables
    • Perform scenario analysis using data validation
    • Integrating drop down menus and other “bells & whistles”


    DCF Modeling Overview

    Modeling free cash flows (FCF)
    • Unlevered vs. levered FCF
    • Capitalizing inappropriately classified expenses
    • Handling stub periods and midyear adjustments
    • Handling working capital items, deferred taxes and long-term accruals
    • Integrating synergy assumptions into the DCF model
    • Common pitfalls - enterprise vs. equity value, unlevered vs. levered FCF
    Discounting the cash flows
    • Deriving the cost of debt
    • Derive the cost of equity using CAPM
    • Delevering and relvering beta
    • Estimating the weighted average cost of capital (WACC)
    • Determining the optimal WACC
    • Avoiding inconsistency between the FCF and discount rate
    Estimating terminal value
    • Perpetuity approach
    • EBITDA multiple approach
    • Common pitfalls
    From enterprise value to equity value per share
    • Calculating net debt and treatment of debt equivalents such as preferred stock, convertible securities, capital leases and minority interest
    • Calculating options and convertible securities using both the standard and treasury stock methods
    Sensitivity analysis
    • Using data tables to analyze a broad range of scenarios given different assumptions


    Get 15% Off Premium Package


    LBO Modeling Overview Build an integrated pro forma LBO projection model
    • Using typical deal structures and current market metrics
    • Build a dynamic Base/Best/Worst Case scenario toggles
    Debt modeling
    • Learn to integrate typical LBO debt structures, including
    • secured, unsecured, mezzanine and PIK debt, convertible securities and equity sweeteners
    • Build a revolving credit facility and cash sweep
    • Model LBO Equity Structures
    Equity modeling
    • Integrate typical equity structure, including management Incentives and rollover, Preferred Stock, contingencies and earn-outs
    • Build a dynamic Sources and Uses of Funds Schedule
    • Modeling Goodwill, and various transactional adjustments
    • Build a returns analysis capturing all providers of capital using XNPV and XIRR functions
    • Error-proofing and integrity-checking an LBO model.
    • Build sensitivity tables required for correct analysis of an LBO, including the construction of multiples, and IRR tables using both data tables and various sorting functions in Excel, including VLOOKUPS, OFFSET, CHOOSE, and INDEX.


    M&A Modeling Overview

    Accretion/Dilution Modeling
    • Introduction to M&A and typical buy side and sell side processes
    • Learn to perform both a back-of-the-envelope and extensive accretion-dilution analysis
    • Project consolidated financial statements, and learn to make correct adjusting entries for goodwill and fair market value write ups, advisory fees and financing fees and debt refinancing
    • Learn proper treatment of deferred taxes created in M&A and convertible securities and options
    Output Analysis
    • Sales, EBITDA, and ownership contribution analysis
    • Calculating pre-tax synergies to break-even
    • Sensitivity analysis using data tables to determine
    • accretion/dilution to target shareholders in various stock/cash scenarios
    • Error-check a merger model
    Topics in M&A
    • A review of common deal structures
    • A review of changes in the accounting for business combinations
    • Understand the asset vs. stock purchase decision
    • Address situations in which amortization may be tax-deductible
    • A discussion of 338(h)(10) election and wholly owned subsidiary acquisitions


    Comps Modeling Overview

    Selecting and Evaluation Appropriate Multiples
    • Learn to select appropriate comparable companies by evaluating operational, financial, size, and other similarities
    • Select comparable companies
    • Input financial data
    • Calculate and interpret financial and market ratios
    • Common analytical challenges including calendarization, nonrecurring items, dilutive securities, and classification issues are addressed using industry best practices.
    Presenting Trading and Transaction Comparable Analysis
    • Structuring an output schedule
    • Selecting key valuation multiples using the VLOOKUP function
    • Building multiple tables




    Get 15% Discount and Become a Modeling Master




    Unlimited E-Mail Based Support

    The Premium Package is a self study program but you are not on your own. Wall Street Prep’s Support Team is comprised entirely of experienced former investment bankers. Upon enrollment, students gain 24 month free and unlimited access to Wall Street Prep's Online Support Center, where they receive answers to questions, free downloads, and important updates from the support staff.

    Wall Street Prep Certification In Financial & Valuation Modeling

    Wall Street Prep issues a Certification of Financial and Valuation Modeling upon successful completion of the Premium Package. To become certified, students must successfully complete an examination administered online by Wall Street Prep upon completion of the Premium Package.
    • The examination consists of 53 multiple-choice questions and focus on topics covered throughout the Self Study Program.
    • The examination is self-paced (no time limit). Allocate approximately 3 hours.
    • The certification can be taken from any computer with an active internet connection.
    Use of Certification as a Credential Students may only use the Wall Street Prep Certification of Financial and Valuation Modeling upon successful completion of the Certification examination. CFA Institute PD Credits Wall Street Prep is registered with CFA Institute as an Approved Provider of professional development programs. This program is eligible for 35 PD credit hours as granted by CFA Institute.

    Prerequisites

    Accounting The program assumes a basic introductory knowledge of accounting (e.g. interaction of balance sheet, cash flow, and income statement). Students with no prior background in Accounting should enroll in the Accounting Refresher Supplement in addition to the Self Study Program (option available at check-out). Corporate Finance Although general exposure to corporate finance is helpful, it is not required. Excel Basic introductory Excel knowledge is highly recommended. Students with limited or no experience using Excel should enroll in the Excel Crash Course Supplement in addition to the Self Study Program (option available at check-out).

    Get 15% Discount and Become a Modeling Master