read through damodarans website. he is an NYU Stern professor who is supposed to be the guru of valuation and goes around all the big investment banks and gives lectures to new hires (someone correct me if im wrong)

http://pages.stern.nyu.edu/~adamodar/

FYI, its good to learn financial modeling as interview prep because it reinforces your knowledge of how accounting statements work and should help you tackle some questions like "walk me through a DCF" or "what are the different ways you can value a company", but no one will be impressed if you mentione that youve learned valuation on your own because every company has a different model so youre going to have to relearn a lot of things anyway.

you probably already know that but didnt want you to make this common mistake.

best of luck

 

hey dude financial modeling skills comes in two parts:

  • learning the academic background behind it
  • learning how to excel really well

You can start doing both at the same time. Practice makes perfect. Try to use as many shortcuts as possible. There are plenty on this site.

The two major model types I think you should tackle using the resources on the Damodaran site: DCF and LBO. Just go into them on Excel, press ALT T-U-D and ALT T-U-T to check out how all the cells tie into one another. And then just get familiar with the formats, etc.

Once you actually start at a BB you will need to learn the firm formats, which vary greatly, but being good at Excel and knowing basic concepts will be good for when you start and for interviews.

 

Bamp!

"After you work on Wall Street it’s a choice, would you rather work at McDonalds or on the sell-side? I would choose McDonalds over the sell-side.” - David Tepper
 

General financial modelling courses you see discussed on WSO will not be that useful if you're looking at Project Finance as the focus of most 3-5 day programs will basically be to build your three statements projections from a 10K and then do M&A/LBO model. If your accounting and/or excel skills are weak this would be a good first step (especially if you do a cheap self-teach course) but will not prepare you for a PF working environment.

The three reputable training courses for project finance modelling are: 1) Euromoney, 2) NavigatorPF - which is now Corality and 3) Financial Mechanics

From what I heard/seen Euromoney provides a good overview but seems a bit outdated and I would strongly consider either Corality or Fi Mech simply because those guys also actively act as model developers for sponsors and are pretty hard-core about what they do.

I think NavigatorPF/Corality may be better for the entry level/occasional modeler as they place a lot of emphasis on ease of use and presentation, but Fi Mech will force you to really use best practices in their training and I have found a vocal group of professionals at pf banks but also infra fund/pe who swear by their methodology and approach.

 

Hi,

Yes, you can learn finance modeling course online. There are many websites that provide online materials to learn this course. If you do not have much time, I would like you to prefer to learn the course by downloading material from good websites. I know few of the websites that provide very good video tutorials from which provide step by step guide:

  • iBanking Training - ibankingtraining(.)com/home They provide video tutorials for students as well as professionals with money back guarantee. You can also get access to their videos from here: ibankingtraining(.)com/ibankingtraining

  • Chandoo - chandoo(.)org/wp/financial-modeling They provide an online training program to teach you How to do Financial Modeling using MS Excel and Project Finance Modeling using Excel.

  • Wall Street Prep - WallStreetPrep(.)com They also provide online material to learn the course.

They all provide very good material from which you can learn your finance modeling course. But if you ask me to choose one, I'd prefer iBanking Training as their video tutorials are very helpful in understanding the concept very easily.

 

Hi Rose,

Thanks for sharing such good information. I have tried them all and they all provide good material but what I think is iBanking Training provides great explanation and their video tutorials are just awesome. I loved'em very much.

Thanks!

 

I like the Wall Street Prep materials (have never used Deal Maven) and have heard that Patrick's advertised Analyst Exchange is quite good (but expensive). Ive used TTS in the past and believe it is very basic. WSP goes into more granular details by providing step by step instructions on how to build a cash flow model w/ projections and then uses the platform to create full-blown lbo models

 

Yeah, was wondering the same thing myself. And if not full blown modeling, then any other things to study up on before the SA stint? Valuation? Excel shortcuts? Financial statements? What would allow us to hit the ground running most effectively?

dollas
 

I would definitely look into excel workshops that your university offers. Mine actually offers a whole range (basic-advanced) for free to students. If you've got anything like that available to you then I would recommend taking them just so you know your way around excel.

But unless they specifically state that you need to know X, Y, and Z on excel then I would imagine they'll teach you exactly what to do and how to do it on excel. Having some background knowledge will work to your benefit.

 

I've done the BIWS excel tutorial as well as the basic modeling. They are great.

"They are all former investment bankers that were laid off in the economic collapse that Nancy Pelosi caused. They have no marketable skills, but by God they work hard."
 
corneliustone:

hey guys, what is a free and efficient way to just learn the basics of financial modelling?

I'm not in IB, so i'm not looking on becoming an expert in the area.

Thank you

There are efficient ways to learn, but it's the "free" part that's the problem since all of the modeling materials out there cost a significant amount of $$ except if you search through the public library and find something. Also my university offers modeling lessons, but I think my school is an exception though. People who signup to this site automatically get 6 free lessons I think though, and so you might be able to get something PM'ed from another member who has them.

 

Basic (and I do mean basic) maths, ideally an understanding of accounting although most training courses teach you what you need, efficiency (not proficiency) in Excel, basic finance concepts (PV / NPV, WACC).

What goes into the model is far more important than building it and that you can't really get from a book or course; you need to understand the company / industry / macro factors. Anyone can build a model and put in numbers, very few people can build one which is actually accurate and has value.

Asatar:

Basic (and I do mean basic) maths, ideally an understanding of accounting although most training courses teach you what you need, efficiency (not proficiency) in Excel, basic finance concepts (PV / NPV, WACC).

What goes into the model is far more important than building it and that you can't really get from a book or course; you need to understand the company / industry / macro factors. Anyone can build a model and put in numbers, very few people can build one which is actually accurate and has value.

@Asatar your kind of response is one of the things that make WSO such a great resource. SB'ed

I have a few more questions based on your response and would be grateful if you could find a few minutes to answer them:

  1. For basic understanding of accounting, I'm studying CFA Level 1 material (financial reporting & analysis, corp fin). These topics would cover the things you mentioned. Would you say this is sufficient accounting knowledge?

  2. If I don't know the industry at all, would efforts at learning modeling be worthless? should I defer such financial modelling training till I atleast develop a basic understanding of my desired industry, and some of the companies?

  3. How should I go about developing industry knowledge?

  4. How should knowledge of macro factors be developed?

Even if you can't answer the above, thanks for your original response. It was gold for me.

 
theresa.socal:

I was in your same shoes last year since I wanted to get into IB. After doing alot of online research and talking to a couple of people in the IB field, they recommend purchasing Wall Street Prep or Training the Street financial modeling materials. I actually bought both packages. So if you're interested in learning financial modeling step-by-step, I would be happy to sell you mine for $60 together (The total retail value is ~$400 for both). PM me if you're interested.

Hi Theresa, would they be the original files? I do have both of those that I downloaded, however they are low quality because it was most likely snipped from the original stream. Please let me know!

Thanks, Jack

 

There are a ton of different methods to do valuations, so no, they aren't always DCFs. Not hardly.

Second, as a total noob, pick up the Investment Banking book by Rosenbaum and Pearl. It's an excellent way to start learning about this stuff and will only cost you $40. From there, you can try out the WSP packages.

in it 2 win it
 
kaynlol:
Thanks alot FSC! So is it safe assume valuations in IBD have some sort of carry over to equity research?

Yes, the valuation methods are the same. 100% carry over!

The level of accuracy and the aim of valuation somewhat differ between IBD and ER, but the tools for valuation are the same! Learn how to use these tools (Rosenbaum book etc) and you will be able to apply them both in ER and IBD.

"The banker's greatest enemies are those people whose souls are not for sale, and those who realize that time is a nonrenewable commodity." (Monkey Business)
 

Hmmmm...

You could start by preemptively buying some of the Training the Street courses. I'm not sure if these are sold individually, but during my SA I referenced a step-by-step TTS guide to build my own standalone operating model. You'll be leagues ahead of MANY guys gunning for positions if you can do this in advance...

 

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