Accounting

Accounting comprises several streams including tax, assurance, management accounting and financial accounting. Accountants may choose to be generalists or specialists. Financial modeling is an important skillset that can be leveraged across the accounting domain to improve decision making.

Examples:

  • Financial Statement Analysis
  • Activity based costing
  • Working Capital Analysis​
  • Taxation
  • Internal Rate of Return (IRR) Calculations

Actuarial

Actuarial functions specialise in the use of data and complex mathematics to evaluate the probability of future events, reduce the likelihood of undesirable events from occurring and communicating this information to non-specialists.  Financial modeling is a necessary capability which supports Actuaries in improving the scope and accuracy of their recommendations.

Examples:

  • Actuarial Spreadsheets
  • Financial Simulations
  • Estimations & Complex Calculations
  • Monte Carlo Simulations

Asset Management

Asset Management is a function that typically sits within a Financial Firm and is dedicated to managing client asset portfolios (i.e. cash, bonds, property, equity) to meet their investment goals. Professionals utilise financial spreadsheets and earnings reports to develop financial models, calculations and projections to assist in achieving these goals.

Examples:

  • Calculations to determine the right portfolio mix
  • Track asset performance
  • Projections on future earnings and growth
  • Net Asset Value (NAV)
  • Models to value securities

Budgeting & Forecasting

Budgeting & Forecasting activities typically sit within an organisation’s Finance Department. These activities enable a business to measure historical and current performance as well as forecast future performance. Predictive financial models can be built with key assumptions and projections (utilising budgeting and forecasting information) to enable a business to make data-led decisions.

Examples:

  • 3-statement model: Income Statement, Balance Sheet and Cash Flow Statement
  • Accounts payable
  • Cash disbursements
  • Monthly and year-end calculations
  • NPV / WACC / IRR analysis

Credit

Credit Functions typically exist within a Finance Department or are separate divisions within Financial Institutions. Credit professionals identify and assess the credit risk of borrowers to enable effective pricing and management of commercial loans. Financial modeling is a key skillset which can be employed in effectively assessing credit risk.

Examples:

  • Business, Industry Category & Financial Statement Analysis
  • Analysis of Credit Risk
  • Projections for Loan Repayment
  • Collateral Analysis
  • Loan Structure and Pricing

Equities Research

Equity researchers use financial modeling to provide insight and detailed analysis into a Company, Entity or Sector. This information can be used by investors to determine allocation of funds for investment purposes. Additionally, the information is also needed for company valuations when considering mergers, Leverage Buy-Out (LBO) and Initial Public Offerings (IPO) decisions.

Examples:

  • Feasibility Analysis
  • Financial and Ratio Analysis
  • Valuations
  • Capital Structure Analysis
  • Industry Benchmarking

Finance & Treasury

Finance and Treasury functions assist in overall cash management, corporate finance and financial risk management of an organization. Professionals utilise financial modeling to assess financial data to analyse market movements. This is ultimately required to improve the overall investment process.

Examples:

  • Liquidity Planning
  • Interest, Commodity and Currency risk
  • Capital Market Instrument Analysis
  • Hedging Analysis

Insurance

Insurance companies assess and value risk for varying assets and scenarios. Insurance adopts several risk management strategies to hedge against financial loss. Modeling and predicting scenarios assists insurance companies through better pricing of underwriting, improved customer retention and increased detection of fraudulent/inflated claims.

Examples:

  • Actuarial Modeling
  • Monte Carlo Simulation
  • Statistical Modeling
  • Calculation of Premiums and Accidental Loss
  • Valuation and Analysis of Insurance Claims

Investment Banking

Investment Banks perform several key roles for their clients including: raising money in the capital markets, financial advisory services, and assistance with merger and acquisition activity. A high degree of financial modeling capability is needed to perform the detailed analysis necessary in making sound financial decisions. As such, Investment Banks will often hire for exceptional financial modeling skills.

Examples:

  • Financial statement modeling
  • Discounted Cash Flow (DCF) analysis
  • Accretion/dilution modeling for mergers or acquisitions
  • Various enterprise value calculations and estimations

Operations

Operations departments exist within some form in every organisation because it is the function responsible for the people, process and technology needed to create goods and/or services. Financial analysis and modeling is prevalent within an operations function to ensure efficient and effective management of raw materials, labour and overhead costs to achieve optimum results.

Examples:

  • Supply Chain Optimisation​
  • Stock Monitoring and​ Logistics​ Management
  • What-If Scenarios
  • Production Analysis
  • Economic Order Quantity (EOQ)

Risk Management

Risk Management functions exists in most large Corporates and Financial Institutions. Financial modeling techniques help Professionals assess risk exposure so that appropriate mitigation strategies can be implemented.

Examples:

  • Value at Risk Analysis
  • Market Risk Analysis
  • Asset-liability Management
  • Hedging Analysis
  • Financial Risk Management

VENTURE CAPITAL & PRIVATE EQUITY

Venture Capital and Private Equity Firms invest in companies. However, the maturity of the companies in which they invest, percentage of equity sought and quantity of investment made ultimately differs. In any ownership decision, sound financial modeling and due diligence is needed to appropriately value the company upon which the organisation is intending to invest.

Examples:

  • Capital Structure Analysis
  • Cash Flow Analysis
  • Debt Modeling
  • DCF and Net Present Value (NPV)
  • Investment (ROI) Analysis
  • IRR
  • LBO

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