Recently, I posted regarding one of the most important skill you need to transform your life in 2019. Many people have asked me what skills they require to be a good financial modeler.
Although, many expert financial modelers love to tell you how complex things are, and how their models are very sophisticated. But their reasons lie in protecting their ego, not empowering you. So, in this post we will be looking at the 7 keys areas of financial modelling.
From my experience, the core skills required to be a good financial modeler can be divided into 7 key areas of knowledge which have been proven to make modelling simplified.
1. Revenue & expenses: When we accountants, talk about revenue and expenses, you might think about debits and credits. But, when building financial models, it goes beyond that because it is more about understanding the relationships between each of the areas within a financial model, and their impacts on the financial statements.
2. Working capital: A sound and practical knowledge in working capital (current assets and liabilities, liquidity, and quick ratios.) goes a long way in help you.
3. Assets: Here, the primary focus is usually on tangible and intangible assets which are depreciated and amortized over their useful lives.
4. Capital structure: The capital structure area within a financial model is another area which can become very complicated because of multiple methods of funding. So, the starting point here is debt and equity.
5. Taxation: focusing on the basics and building more advanced skills over time. In otherwords, Once you have a solid understanding of basic tax expense and losses modeling, you can move onto more advanced considerations such as deferred tax assets and liabilities, permanent differences and tax payment timing delays.
6. Other financial statement items: for every non-financial statement piece of a financial model that impacts the financial statements would be classifiable as either revenue and expenses, working capital, assets, capital structure or taxation.
7. Financial statements: To become a good financial modeler, it is important to understand these relationships between the financial statements, and how each of the other areas within a financial model impacts each of these financial statements.
Knowing these core areas will help you become a good financial Modeler and help you be among the top earners in your field.
Dedicated to Your Success
Tim Jibodu ACA, ACTI
PS: If you are yet get you’re the newly released financial modelling Videos and transform your status in 2019 because doing the same thing and expecting a different result is insanity. So, On Tuesday 14th February, 2019 11:59pm, This opportunity will end and you will not be able to get it at a discounted price again. Call 08082366372,08090820787 or click on the below link now to ORDER NOWhttp://platinumgoldsolutions.com/financialmodelexpert/