Overview

A cash flow forecast is a plan that shows how much money a business expects to receive in, and pay-out, over a given period of time. … Check out our article on how to make a cash flow forecast for more information on the process and benefits of financial forecasting for small businesses.

Corporate Financial Modelling: Building Forecasts and Cash Flows is the second CPD course in a three-part series. Starting with, Corporate Financial Modelling: Setting up Financial Models, which set out a methodology for building models in Excel. This course helps you take a simple historic spreadsheet model and develop it by adding a financial forecast and using other forecasting techniques.

This course will enable you to:

• Understand the different forecasting methods available to you in Excel and apply them to your own data
• Use ratio analysis to produce a forecast
• Generate expectations of future performance and provide forecasted statements and cash flows
• Create a flexible model which can be used to review different scenarios, and where inputs can be quickly changed, and results quickly accessed

Course Content

Day 1

Forecasting

• What are the forecasting basics?
• What causes forecasting errors?
• What types of charts should we use?
• How do we review forecasts?
• How can we appraise accuracy?
• How do we analyse data in Excel?

Day 2

Forecasting methods

• How can we identify patterns?
• What is the simple percentage plus method?
• How do we use compound annual growth rate?
• How are trends useful?
• What is smoothing?
• How do we look at seasons?
• How do we use regression?
• What is the inflation problem?

Day 3

Ratios

• What factors can affect cash flow?
• What are the core ratios?
• What are the profitability ratios?
• What ratios measure operating efficiency?
• What ratios can help with financial structure?
• Is growth sustainable?
• What are the market ratios?
• What error functions and units should be considered?
• What checks are required?

Day 4

Forecast drivers

• What assumptions can we make?
• How do we generate the income statement?
• How are balance sheet assets generated?
• What about balance sheet liabilities?
• Why are the workings sheets important?
• How do we deal with divisions?

Day 5

Accounting statements

• What is the structure of the balance sheet?
• How do we model the income statement?
• How do we model the balance sheet?
• What are the mechanics of cash flow?
• What are the cash flow ratios?
• Can we avoid common mistakes?
• How should we deal with iteration?
• What further checks are needed?