Modeling Consulting

Overview

Modeling requires expertise in business analysis, accounting, finance, programming and modular design, and Excel. Our experts have these diverse set of skills, which enable to them to work with you to offer an integrated solution. For modeling training, please click here.

Our modeling consulting is targeted to two distinct groups with some overlap between them. We offer modeling for investors and bankers outside a company who build models for valuation and credit risk analysis using public data. We also help build models for financial planning and analysis groups that have access to internal data and build detailed models for planning and control. For related Excel skills, please click here.

External valuation and credit risk analysis

We offer consulting in the following aspects of modeling financial statements for valuation and credit risk assessments:

Overall valuation and credit risk assessment

  • Analyze a business to identify drivers of cash flows
  • Build drivers of business risk
  • Analyze capital structure to model financial risk

Revenues

  • Revenue drivers: Geographic, product lines, cyclicality, seaonality, organic versus acquisitive growth
  • Receivables and bad debts
  • Deferred revenues
  • Long-term receivables and deferred revenues
  • Finance receivables and securitization

Cost of goods sold without depreciation and amortization and share-based compensation

  • Quantity or volume drivers
  • Per unit cost drivers
  • Seaonsal inventories
  • Long-term (multiperiod) inventories
  • Supplier financing of inventories

Depreciation and amortization

  • Efficient ways of modeling book and tax depreciation; flexible useful lives; modeling different asset classes efficiently
  • Modeling growth capex versus replacement capex; identifying capex drivers
  • Time-based versus use-based depreciation
  • Depletion, exploitation, and amortization expenses

Selling, general, and administrative expenses

  • Long-term prepayments and payables: Pension and healthcare, Warranties
  • Capitalizizing research, development, and marketing costs to remeasure margins
  • Modeling share-based compensation

Interest expense and interest income

  • Debt sizing and structure
  • Iterations
  • Liquidity and interest income

Taxes

  • Effective tax rates
  • Deferred tax assets and liabilities
  • Net operating losses

Acquisitions

Internal financial planning analysis deals with more detailed and confidential data. As such all issues listed above that are relevant for external cash flow forecasting are also relevant for internal models. In addition to the topics listed above, we consult on the following aspects of financial planning and analysis for corporations and financial institutions:

Enhancing the efficiency of modeling processes

  • Formatting conventions: inputs, outputs, projections, historicals, external links
  • Number and design of worksheets in a workbook
  • Multi-step modular design to enhance the readability of models and to reduce errors
  • Building models that can be easily understood

Using advanced Excel features to streamline models and model building

  • Building add-ins with Visual Basic for Applications (VBA) to automate tasks
  • Building scenarios efficiently using offset, indirect, lookup, index, match, and choose functions
  • Using data tables for sensitivity analysis
  • Using iterations only when needed and building models that are robust in spite of iterations
  • Using sumproduct and array functions to streamline models with multiperiod effects
  • Improving user interaction using data validation, spinners, list boxes, and form controls

Internal financial planning and analysis

Internal financial planning analysis deals with more detailed and confidential data. As such all issues listed above that are relevant for external cash flow forecasting are also relevant for internal models. In addition to the topics listed above, we consult on the following aspects of financial planning and analysis for corporations and financial institutions:

Enhancing the efficiency of modeling processes

  • Formatting conventions: inputs, outputs, projections, historicals, external links
  • Number and design of worksheets in a workbook
  • Multi-step modular design to enhance the readability of models and to reduce errors
  • Building models that can be easily understood

Using advanced Excel features to streamline models and model building

  • Building add-ins with Visual Basic for Applications (VBA) to automate tasks
  • Building scenarios efficiently using offset, indirect, lookup, index, match, and choose functions
  • Using data tables for sensitivity analysis
  • Using iterations only when needed and building models that are robust in spite of iterations
  • Using sumproduct and array functions to streamline models with multiperiod effects
  • Improving user interaction using data validation, spinners, list boxes, and form controls