Financial

Modeling

—

Hard

Skills

Core

Valuation

Modeling

skills

1.1

Integrated

Three

Statement

Modeling

CORE

Building

fully

linked

income

statement

balance

sheet

and

cash

flow

statement

from

operating

drivers

with

controlled

circularity

(

interest

average

debt

and

revolver

)

and

balance

check

that

ties

zero

every

period

1.2

Discounted

Cash

Flow

(

DCF

)

Valuation

CORE

Forecasting

unlevered

free

cash

flow

computing

WACC

from

CAPM

and

target

capital

structure

applying

mid

year

convention

and

cross

checking

terminal

value

using

both

the

Gordon

Growth

and

exit

multiple

methods

1.3

Comparable

Company

Analysis

CORE

Selecting

defensible

peer

sets

normalizing

non

recurring

items

and

calendarizing

fiscal

years

then

calculating

trading

multiples

(

Revenue

EBITDA

EBIT

)

LTM

and

forward

estimates

1.4

Precedent

Transaction

Analysis

ADVANCED

Spreading

announced

deal

data

adjusting

for

transaction

specific

items

calculating

deal

multiples

LTM

and

forward

metrics

and

interpreting

control

premiums

and

synergy

driven

pricing

1.5

Enterprise

Equity

Value

Bridge

CORE

Reconciling

net

debt

minority

interests

preferred

stock

pension

deficits

associates

and

capitalized

leases

move

cleanly

from

enterprise

value

equity

value

and

value

per

1.6

Sum

the

Parts

(

SOTP

)

Valuation

ADVANCED

Valuing

segments

independently

using

divisional

multiples

segment

DCFs

allocating

unallocated

corporate

costs

and

consolidating

into

single

equity

value

with

clearly

stated

bridge

1.7

Sensitivity

Scenario

Analysis

CORE

Two

way

data

tables

across

price

volume

WACC

and

terminal

growth

plus

downside

base

upside

cases

driven

from

one

shared

set

input

drivers

rather

than

duplicated

formulas

1.8

Multiple

Selection

Adjustment

ADVANCED

Choosing

the

appropriate

metric

for

each

sector

(

EBITDA

for

industrials

ARR

for

SaaS

FFO

for

REITs

adjusting

for

stock

based

compensation

IFRS

leases

and

one

off

items

and

defending

the

chosen

range

1 / 6

Excel

Spreadsheet

Engineering

skills

2.1

Advanced

Lookup

Reference

Functions

CORE

INDEX

MATCH

XLOOKUP

CHOOSE

OFFSET

INDIRECT

and

dynamic

named

ranges

used

preference

hardcoded

cell

references

models

survive

row

insertions

and

structural

changes

2.2

Aggregation

Conditional

Logic

CORE

SUMIFS

COUNTIFS

AVERAGEIFS

SUMPRODUCT

and

nested

IFS

structures

for

segment

roll

ups

tiered

pricing

eligibility

tests

and

multi

criteria

classification

2.3

Dynamic

Array

Formulas

ADVANCED

Spilling

functions

(

FILTER

SORT

UNIQUE

SEQUENCE

TEXTSPLIT

legacy

CSE

arrays

and

self

expanding

ranges

that

automatically

absorb

new

rows

without

manual

range

edits

2.4

Financial

Functions

CORE

NPV

XNPV

IRR

XIRR

MIRR

PMT

IPMT

PPMT

and

used

correctly

with

actual

date

conventions

plus

loan

amortization

and

lease

schedules

built

from

first

principles

2.5

Data

Tables

What

Analysis

APPLIED

One

way

and

two

way

data

tables

Goal

Seek

for

breakeven

problems

and

Scenario

Manager

for

switching

between

driver

sets

without

duplicating

the

model

2.6

Model

Architecture

Structure

CORE

FAST

and

SMART

conventions

strict

separation

inputs

calculations

and

outputs

;

one

formula

per

row

;

hardcodes

embedded

formulas

;

consistent

time

series

layout

and

colour

coding

2.7

Error

Checking

Model

Auditing

CORE

Balance

integer

and

sign

checks

;

Trace

Precedents

and

Dependents

;

Evaluate

Formula

;

the

Inquire

add

for

comparing

versions

;

and

hunting

inconsistent

formulas

across

rows

2.8

Formatting

Controls

Data

Validation

APPLIED

Custom

number

formats

for

units

and

negatives

conditional

formatting

heat

maps

dropdown

driven

assumption

switches

protected

input

cells

and

locked

formula

ranges

2.9

Pivot

Tables

Power

Pivot

APPLIED

Multi

source

pivot

tables

calculated

fields

and

items

slicers

and

timelines

and

the

Data

Model

for

relating

large

transaction

level

datasets

without

flattening

them

into

one

sheet

2.10

Charts

Waterfalls

Dashboarding

APPLIED

Dynamic

chart

ranges

waterfall

and

bridge

charts

sparklines

combo

axes

and

cell

REPT

bar

charts

for

compact

board

ready

one

page

reporting

2.11

VBA

Macros

Automation

ADVANCED

Recorded

and

hand

written

macros

for

formatting

data

refresh

batch

printing

model

roll

forward

and

automated

tie

outs

with

error

handling

and

reliance

the

active

sheet

2 / 6

Transaction

Deal

Modeling

skills

3.1

Leveraged

Buyout

(

LBO

)

Modeling

ADVANCED

Sources

and

uses

funds

opening

balance

sheet

construction

tranche

debt

schedules

cash

sweep

mechanics

and

exit

returns

under

multiple

exit

year

and

multiple

assumptions

3.2

Debt

Schedule

Interest

Construction

ADVANCED

Revolver

draws

and

paydowns

term

loan

amortization

PIK

toggle

instruments

commitment

and

ticking

fees

and

interest

calculated

average

rather

than

closing

balances

3.3

Returns

Analysis

Distribution

Waterfalls

ADVANCED

IRR

XIRR

MOIC

cash

and

payback

calculations

plus

waterfalls

with

preferred

returns

hurdle

rates

catch

tiers

and

carried

interest

splits

3.4

Accretion

Dilution

Analysis

ADVANCED

Pro

forma

EPS

impact

across

the

financing

mix

synergy

phasing

and

run

rate

assumptions

foregone

interest

income

cash

consideration

and

the

breakeven

synergy

required

for

neutrality

3.5

Purchase

Price

Allocation

Goodwill

ADVANCED

Tangible

book

value

adjustments

identifiable

intangible

recognition

and

amortization

deferred

tax

liabilities

and

goodwill

roll

forward

that

reconciles

the

consideration

transferred

3.6

Project

Finance

Debt

Sculpting

ADVANCED

Cash

flow

available

for

debt

service

(

CFADS

DSCR

and

LLCR

calculations

sculpted

repayment

profiles

DSRA

and

maintenance

reserves

and

covenant

compliance

testing

period

3.7

Real

Estate

Asset

Level

Modeling

APPLIED

Property

level

cash

flows

lease

rollover

and

rent

review

schedules

net

operating

income

build

cap

rate

based

valuation

and

levered

IRR

with

debt

drawdown

and

refinancing

3 / 6

Forecasting

Planning

Analysis

skills

4.1

Driver

Based

Forecasting

CORE

Bottom

operating

models

built

from

volume

price

mix

headcount

utilization

and

unit

cost

drivers

every

forecast

line

can

traced

back

operational

assumption

4.2

Budgeting

Reforecasting

Rolling

Forecasts

CORE

Annual

operating

plans

quarterly

reforecast

cycles

and

rolling

12-

month

forecasts

that

splice

actuals

plan

the

correct

period

boundary

without

double

counting

4.3

Variance

Bridge

Root

Cause

Analysis

CORE

Price

volume

mix

decomposition

and

one

off

bridges

explaining

actuals

against

budget

and

forecast

and

written

commentary

that

names

the

specific

driver

behind

each

variance

4.4

Working

Capital

Forecasting

CORE

Days

sales

outstanding

days

inventory

outstanding

and

days

payable

outstanding

modeling

cash

conversion

cycle

analysis

and

linking

working

capital

movements

into

the

cash

flow

statement

4.5

Cash

Flow

Forecasting

Liquidity

Management

CORE

Direct

method

13-

week

cash

flow

forecasting

receipt

and

disbursement

timing

minimum

cash

balance

monitoring

and

runway

analysis

under

constrained

liquidity

4.6

Unit

Economics

Cohort

Modeling

ADVANCED

Customer

acquisition

cost

lifetime

value

LTV

CAC

ratio

payback

period

and

cohort

retention

curves

built

from

transaction

level

data

rather

than

blended

averages

4.7

Recurring

Revenue

SaaS

Metric

Modeling

ADVANCED

ARR

and

MRR

bridges

(

new

expansion

contraction

churn

bookings

versus

billings

versus

revenue

net

revenue

retention

magic

number

and

Rule

tracking

4.8

Cost

Margin

Breakeven

Analysis

APPLIED

Contribution

margin

product

channel

fixed

versus

variable

cost

separation

breakeven

volume

and

revenue

and

operating

leverage

sensitivity

volume

changes

4 / 6

Data

Tools

Automation

skills

5.1

Financial

Data

Platforms

FOUNDAT IONAL

Pulling

market

filing

and

deal

data

from

Bloomberg

Capital

FactSet

Refinitiv

PitchBook

and

Crunchbase

and

validating

against

primary

filings

before

enters

model

5.2

Power

Query

Data

ETL

APPLIED

Connecting

source

systems

cleaning

and

unpivoting

messy

extracts

merging

and

appending

tables

and

building

refreshable

queries

that

remove

manual

copy

paste

from

the

monthly

cycle

5.3

SQL

for

Finance

ADVANCED

Writing

joins

CTEs

subqueries

CASE

logic

and

window

functions

extract

and

aggregate

transaction

level

financial

data

from

warehouse

tables

with

controlled

row

counts

5.4

Python

for

Financial

Modeling

ADVANCED

pandas

and

NumPy

for

data

wrangling

and

reconciliation

openpyxl

for

reading

and

writing

model

workbooks

and

Monte

Carlo

simulation

for

probabilistic

outcome

ranges

5.5

Management

Dashboards

APPLIED

Power

and

Tableau

reporting

built

the

same

source

data

the

model

with

defined

measures

drill

through

detail

and

published

refresh

schedules

5.6

Enterprise

Planning

Systems

(

EPM

)

APPLIED

Anaplan

Workday

Adaptive

Oracle

NetSuite

SAP

and

Vena

for

multidimensional

planning

consolidation

allocation

logic

and

management

reporting

scale

5.7

Model

Version

Control

Handover

FOUNDAT IONAL

Disciplined

file

naming

and

versioning

dated

change

logs

documented

assumptions

tab

and

clean

handovers

that

let

colleague

pick

the

model

without

explanation

5 / 6

Accounting

Standards

Governance

skills

6.1

Financial

Statement

Literacy

FOUNDAT IONAL

Reading

and

interpreting

GAAP

and

IFRS

statements

footnotes

contingent

liabilities

and

disclosure

quality

and

spotting

where

reported

figures

diverge

from

economic

reality

6.2

Accounting

Adjustments

Normalization

CORE

Normalizing

EBITDA

for

one

offs

and

stock

based

compensation

capitalizing

versus

expensing

decisions

revenue

recognition

under

ASC

606 /

IFRS

15,

and

lease

treatment

under

ASC

842 /

IFRS

16.

6.3

Scenario

Stress

Testing

ADVANCED

Downside

stress

cases

covenant

headroom

analysis

liquidity

stress

under

delayed

receipts

and

sensitivity

valuation

regulatory

capital

adverse

macro

assumptions

6.4

Model

Documentation

Assumption

Logs

CORE

Assumption

registers

with

sources

and

rationale

cited

data

references

read

sheet

describing

model

scope

and

known

limitations

and

clear

labelling

estimates

versus

actuals

6.5

Model

Risk

Governance

Audit

Readiness

ADVANCED

Compliance

with

internal

model

risk

policy

peer

review

and

independent

validation

access

controls

sensitive

assumptions

and

reconciling

model

outputs

back

the

general

ledger

6 / 6

Financial Modeling Hard Skills

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