Every business entity wishes to become the highest-ranking firm. To be in the first place, investment risks are crucial. For such big deals, a firm should understand its risk factors, business model, investment plans, market, customers, and finances. There is no instrument to predict a company’s future, but the latest mathematical analysis can predict the future of a company. Financial modeling is a useful and versatile inventive tool that benefits businesses of all kinds. To reach its corporate goals, a firm may utilize its financial modeling strategies. Big corporates are hiring professionals who can handle their financial accounts. Let’s have a look to know more about professional financial modeling courses in Hong Kong.
What is Financial Modeling?
Financial modeling is a method that measures the financial performance of a business by creating a summary of a company’s earnings and expenses in the form of a spreadsheet (EXCEL form) that analyses the impact on its future and business. It provides the user with a concise knowledge of all variables associated with financial forecasts. A company builds its decision of buying, selling, starting, and growing a business on a financial model.
When is Financial Modeling Used?
There are many conditions where a financial model is built and applied. Today, every new person entering the market as an entrepreneur searches well for the viability of their business. An entrepreneur uses the financial model for the best results. Any firm that performs the process of merger or acquisition with a competitor often uses the financial model.
These models are used to keep informed the shareholders about their investments. Models are sometimes designed by internal teams, or by third parties such as equity research firms.
Typical Cases Where Financial Modeling Can Be Used:
- Capital Raising
- Acquiring business or assets
- Expanding business in a new market or location
- Decision-making process of Capitol allocation
- Forecasting and Budgeting
- Business valuation
- Preparing Financial statement analysis
Thus to flourish in knowledge, one must verse himself with the best design. The Financial Modeling courses in Hong Kong provide great knowledge of this process.
What Data is Used For Financial Modeling?
Different financial models are required for different data and outcomes. There are a few types of data that can be used as a common feature in financial models. They include:
- Balance sheets or income statements
- Discount cash flow analysis or cash flow statements
- Historical figures and their assumptions
- Sensitivity analysis
There are different scenarios and circumstances where these models have to fit. For that, they are stress tested and audited.
Career After Financial Modeling Courses in Hong Kong As An Expert:
Investment Bankers – They are the financial advisors for corporations who help clients to raise money. They have effective communication skills, analytical power, and expertise in the financial service industry.
Equity Research Analyst– Acquires knowledge of preparing details research reports on the stock market industry. They help in major decisions of the company involving selling, purchasing, and investments.
Credit Analyst–Has a worthy role to manage the credit worthiness of customers and prospective customers. They manage credit risk and ongoing risks in the company.
Risk Analysts- With their strong numerical, analytical, and strategical skills, risk analyst research, plan, negotiate and solve complex and technical financial problems of the company.
Data Analyst- Examines the financial information using the data analysis tools to help in building insights and strategies.
Portfolio Managers- These are the professionals who take investment decisions for a company. They invest fund’s assets and implement its investment strategies. They invest in extended traded, mutual, or closed-end fund assets.
Investor- Any person or entity who puts in its money to get capital gains. Investment can be short-term or long-term.
Entrepreneur- A person who sets up a business bearing financial risks in hope of enjoying financial rewards.
Modeling determines reasonable forecasts, prices for market or product, asset or company valuation, the share price of companies, effect of merger and acquisition, LBO, corporate financial model, synergies, option pricing, and more.
Also Read: Online Financial Modeling Courses
Types of Financial Modeling:
Financial models differ in type and complexity as per situation demand. They perform different tasks like valuation, sensitivity analysis, and comparative analysis. They help in risk prediction, pricing strategy, effect, synergies, etc. The major models in Financial Industry taught in the Financial Modeling courses in Hong Kong are:
Three-statement Financial Model-
It is a structure that combines the income statement, balance sheet, and cash flow statement of a company and links them together. It represents the complete economic scenario of a company and projections in the most standard and in-depth form. There are schedules support data such as depreciation schedule, debt schedule, working capital calculation schedule, etc.
This model has super connectivity that allows the user to revise the inputs when required. These changes can be reflected immediately in the entire model. This helps the user to understand all the components and their effects in the model. This model helps in forecasting and predicting trends of given sets of inputs. The model can go back in the history of the company and can forecast it for 2 to 3 years on the requirement.
Discounted Cash Flow (DCF) Model-
This signifies the concept of a company’s value as the net present value (NPV) of the sum of the future cash flow generated by the company discounted back today. The projected future cash flows are discounted by the discounting factors. Discounting factor is quite important. Even a slight error can lead to an enormous amount of data change in results.
DCF model checks the undervaluation and overvaluation of a company’s stock. It is an important decision-making factor for a company’s investment scenario. The model simplifies and determines the attractiveness of an investment opportunity. If the current value is less significant than the NPV of the sum of future cash flow then the option is profitable else it is an unprofitable deal.
DCF model is reliable as it calculates on the base of the Free Cash Flow method, thus eliminating all the factors of expenses and focusing on freely available cash to the company. Big organizations have progressive growth rates and steady financial trends. These organizations involve the DCF model for the projection of their future cash flows.
Leveraged Buyout Model (LBO) –
This helps the company to acquire the other company by using borrowed money debt to meet the acquisition cost. Cash flows from the acquired corporation’s assets and operations are used to repay the debt and its charges. Thus, the LBO model is hostile as it uses an aggressive way of acquisition as the target company is not included in the sanctioning process of the deal.
The purpose of an LBO model is to estimate the amount of profit that can be generated from a deal. There are multiple ways to raise a debt that can have specific interest payments and higher levels of complexity. This model is generally used by investment banking and corporate financing companies.
Sum of the Parts (SOTP) Model-
A valuation is an approach that estimates each business segment within a company combing all to define the value of the firm. This additional approach is known as the sum of the parts method. SOTP model is applicable to spin, mergers, equity carve-outs, etc.
Comparative Company Analysis Method-
As the name says, it is a comparing model where a company evaluates its metrics with the other company’s metrics of the same size in a similar industry. It works at first-
- Searching for the right company by checking its ratios analysis.
- Gather the financial information of companies
- Sets up the comparison tables
- Calculates all comparable ratios.
This model assumes that similar companies will have comparable EV/EBITDA and other valuation multiples. This is the primary form of valuation performed by analysts in their firms.
Comparable Transaction Analysis Model-
This method considers past mergers and acquisition transactions and values a comparable company using its precedents.
- The model first identifies the transactions
- It identifies the correct transaction multiples
- Finally calculates the transaction multiple valuations
What Financial Modeling Courses in Hong Kong Teach You About Fundamentals:
A financial model is beneficial when it gives out results that are accurate and dependable. These models require efficiency and a set of necessary skills.
Accounting concepts-
Taking the example of the Satyam Fraud Case, one can understand how important is accounting practice to identify and predict malpractices of the company. Financial modeling requires financial documents that use financial numbers from a company or market. It uses some specific concepts and accounting rules like US GAAP, and IFRS (International Financial Reporting Standards).
These rules maintain the consistency of the presentation of financial events and facts. It is extremely important to understand the rules and concepts as they maintain quality and accuracy to build a model in excel form.
Excel Understanding-
MS EXCEL is the tool that provides financial modeling to perform its method. There is a wide range of complex calculations that are webs over multiple tabs interlinked to show their relationships with each other. To prepare a model, the user must have an in-depth knowledge of excel with its formulas, keyboard shortcuts, presentation varieties, VBA Macros, etc. Maintaining awareness of these skills gives the analyst an advantage in his or her work skills over others.
Why Interlinking of Financial Models is Important-
The interlinking of three-statement financial modeling is important as it allows the key numbers in the model to flow from one statement to the other. This completes the interrelationship between them and shows us the picture of the financial situation of the company.
- Net income from the income statement must be linked to Retained earnings in stock Holders equity statement.
- The net change in cash flow must be linked to the cash on the balance sheet.
Forecast–
Forecasting is an art and a vital science that uses its skills in financial modeling by understanding the scenario of the future financial situation. When forecasting is good, it increases the dependability of a model. An analyst uses reasonable assumptions while predicting the numbers to get a close idea of how attractive the investment or company will be in the coming period.
Presenting a Financial Model-
The model consists of micro details, complex formulas, and numbers that are used for diverse groups of operational managers, clients, and management. Nobody will be able to depict any meaning from the model if the model will seem messy and hard to understand. Hence the model should be kept simple in presentation and rich at the same time to show its importance.
Must have a look at the top Financial Modeling Courses in Kenya
Financial Modeling Courses in Hong Kong Teache You the Protocols to Follow:
Structure– The author of the model may change so the system should be rigorous, and its integrity should be kept in front to behave logically.
Flexibility– A model should be flexible in its approach, scope, and adaptability in any situation. The flexibility of a financial model depends on how easily it is possible to modify it at any time and in any location.
Appropriate– The details should not be cluttered with excessive details. An understanding of a financial model is important to produce a financial model. It must have a good representation of reality.
Transparency– The model must have easily understood formulas that can be understood by financial modelers and non-modelers.
Financial Modeling Courses in Hong Kong:
1. IIM SKILLS-
Being skill-based, financial modeling courses are in high demand by big firms to monitor their data in an accessible and handy manner. For these opportunities, one must polish their skills to have a better command to operate the methods. IIM SKILLS is one top institute for financial modeling courses in Hong Kong one should look for. With their lifetime assistance, they support and provide knowledge-based modules to cover the course.
The Financial Modeling Course is Divided Into 6 Modules –
- Module 1- Learning advanced Excel with 8 hours-long class covering all minute details to help you.
- Module 2- Covers all the details of Accounting, Financial statements, cash flow, and balance sheets with 5-7 hours of Lecture.
- Module 3- This module covers Ratio Analysis and KPI covering many topics like the DuPont formula, Liquidity Ratios, Valuation ratios, Basic and diluted EPS, Financial summary, etc.
- Module 4- Covers the fundamentals of Financial Modeling covering its structure, scenario, building revenue, error tracking, and others.
- Module 5- Types of Models- Above discussed all types of Financial Modeling will be taught in this module.
- Module 6- This module covers Business Valuation in detail.
This is a 3-month course with live online classes having lectures of more than 50 hours, practical assignments, and more than 5 case studies. The institute is India based but it is known for its worldwide online classes and is a recognized institutional body in Hong Kong.
You Get the Following Benefits With This Course From IIM Skills
- Master Certification Course from IIM SKILLS recognized by MSME govt of India.
- Placement assistance
- Lifetime Access
- Full-year support and guidance
- Soft copy of lessons learned
Email: info@iimskills.com
Contact: +91 9911839503
Also Read: IIM Skills Financial Modeling Course Review
Other Related Courses Provided By IIM Skills
2. Kaplan University-
It is the finest educational institute for financial modeling courses in Hong Kong with more than 140 expert professionals and dedicated staff. It provides educational services other than professional courses like post-secondary education, test preparation, and K-12 services for children.
There are 4 Modules based programs covering basics to advance skill sets for financial modeling. Theoretical topics are covered in detail with practical applications.
- It provides workshops
- 18-month course
- Executive Certificate provided by Kaplan University
- certificate of attendance
- duration is 2 days per module
Recommended Read: Financial Modeling Courses in Melbourne
3. AMT Training-
With 20+ years of experience, AMT courses are the leading financial modeling courses in Hong Kong. They are the training partner of many firms with the accreditations of- ICAEW, ACCA, CFA, and solicitor regulatory authorities providing extensive hours of training. They are affiliated with the Chartered Institute of securities and investments.
Other Benefits of the Financial Modeling Courses in Hong Kong Are-
- Classes can be attended online or live depending on the region
- Case studies, pdf e-binder with excel templates will be provided
- There will be some quizzes to learn more
The Course Will Cover-
- Fundamentals of Financial Models
- Cash Flow Operations
- Excel Power Modeling
- Real Estate Master class
- Private Equity Master class LBO Modeling Focus
- Divestiture Analysis, and M&A Modeling Issues
- Credit Analysis Fundamentals and Issues
- Preparation of Balance sheet
- Calculation of Interest
- Stress tester and Final checklist
4. NSE-
National Stock Exchange was established in the year 1992. In 1993 it was recognized by SEBI and it further launched the wholesale debt market and cash market segment. Since that till present, NSE has collaborated and opened new businesses. It has other strategic investments including Mutual Fund registry services, depository services, back-end exchange support services, e-corporate governance, commodity, etc.
It has launched its courses in finance for better education and guidance. Its courses are famous everywhere, also it has one of the best financial modeling courses in Hong Kong too.
The Course Has the Following Features-
- 10+hours live sessions
- 59 videos of content
- 30+ soft copies of study material
- Full-length test
- NSE recognized certificate
Benefits of The Course-
- Students of MBA Finance, CFA, CA, And commerce students can apply
- Helps in building a career as an Equity Research Analyst
- The best opportunity for working professionals for future growth
Recommended Read: Financial Modeling Courses in India
A Few Tips to Create a Flawless Model-
Planning and Outlining-
As an analyst when you plan to put the historical numbers and start with the model, you should always plan the outline of the whole project. Start by deciding a timeline, the extent of years of historical numbers, and projection years, and get knowledge about the industry and the company. It is important to do an in-depth knowledge of the Annual report or the in-hand situation. That helps you in a kick start.
Quality–
The quality of the financial model is always to be maintained and should not depend on where the model has proceeded. The model may seem easy at the starting but as you proceed further, it may become difficult for the analyst to maintain its complicacy and crispiness. There is no scope for mistakes in accounting. If wrong data is inserted, it will ruin all effort put in with incorrect results. So lots of patience and confidence are required for it.
Presentation-
The presentation should be easy and understandable then only the best financial model can be led. Color coding, font size, sectioning, and names of line items should be included in the presentation. These basic tools enhance the look of the model when used beautifully combined.
Assumptions-
These are one of the forms of 4 components in the forecasting process of Financial Modeling. It projects a company’s financial performance based on a specific period. They are pivotal in forecasting financial data. They should be based on reality and reasonability and should trend with the company’s recent scenario.
Accuracy Check– Should be done at a proper time in travel by an analyst. The model when proceeds get quite lengthy and complicated. To avoid mistakes accurate checks in the model should be done as they avoid huge blunders to happen.
FAQs:
1. Are financial modeling courses in Hong Kong valuable?
There are tremendous job opportunities for financial analysts. These include investment banking, financial planning analysis, project finance, credit analysis, investment banking, and many more areas. These courses provide certification as an analyst.
2. Is the financial modeling course tough?
If you are a financial enthusiast and ready to gain knowledge of Finance then this certification program is best to have as a professional course. It makes your doubts clear and the course seems much easier.
3. Are the Financial Modeling courses in Hong Kong in demand?
This is a skill-based course and in high demand in financial as well as other big firms to handle their financial data and depict the future financial trend. It is suitable for people who are looking for a job change as it gives great monetary gains.
4. What skills are important to be an analyst?
A financial analyst must have strong quantitative skills, good communication skills, problem-solving skills, and logical skills.
5. Does being a financial analyst makes life stressful?
The work of finance is complex and requires a lot of attention. It may create stress that can be overcome by defining the task and polishing your skills to work fast and efficiently. This is a paid well job, so tie your laces to balance your life with it. The above financial modeling courses in Hong Kong provide word class teaching data to study and gain knowledge.
6. What qualification is needed to be a financial analyst?
If you are going for a degree course, a bachelor’s degree is required. A Master’s in Business Administration (MBA) is a post-graduate degree. Other than that, certification courses are available that provide you with great knowledge of the subject theoretically and practically to earn and settle well.
7. After completing the financial modeling courses in Hong Kong, can financial analysts work from home?
Financial analysts who work from home frequently measure KPIs, reporting as requested, ensuring data integrity, and supporting regulatory compliance activities. It can be a remote home-based position, though some companies may occasionally ask you to visit the office to attend meetings or give reports.
Conclusion
Financial modeling is used for a variety of purposes depending on the needs of the client and the business. It helps in business decisions and helps to meet the requirements of the client’s expectations. The financial model is used for reporting, analyzing, valuation, forecasting, and many other company analysis processes. The financial modeling courses in Hong Kong elevate your qualification to the world’s best level by making you an expert and showering you with all the knowledge required to be a financial analyst. The courses provide you with the latest tools and technical knowledge required for an analyst and impart practical knowledge, projects, and real case studies.