Financial Modelling with VBA Master Class
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The document provides information about an advanced financial modeling master class to be held from March 20-23, 2012 in Nairobi, Kenya. The objective of the course is to expose participants to advanced modeling techniques using Excel and VBA. Key topics will include constructing sophisticated models for finance and other fields, examining real-world models, and mastering advanced Excel and VBA skills. The intensive, hands-on course will be facilitated by Viswanath Tumu, a consultant with extensive experience developing financial models.
Financial Modelling with VBA Master Class
- 1. THINKING BEYOND THE OBVIOUS 20 – 23 March 2012 Nairobi Serena Hotel - Kenya For more information, please contact Ola Odejayi +27 72 550 0562 • ola@gptrainingsa.com • www.gptrainingsa.com SETA Accreditation No. 2502
- 2. OVERVIEW e objective of this Advance Financial Modelling master class is to expose participants to modelling technology and tools using ‘advanced’ features of Excel and (more importantly, Excel’s programming counterpart, ‘Visual Basic for Applications’ (VBA)) for building sophisticated and useful models in all functional areas, including but not limited to Finance, Marketing, Accounting, Banking, Human Resources, Econometrics, Statistics, Infrastructure, Treasury, Public Policy, Engineering. Key focus will be given to the underlying technology this is at the heart of developing powerful and sophisticated models. Participants will work extensively with practical examples and in the process, master advanced features of Excel programming with VBA. On completion of the course, participants will be able to readily apply the concepts discussed during the sessions in their speci c organizations. is is a hands-on, intensive, rigorous and intellectually challenging program. Participants will learn exceptionally valuable skills that have become increasingly essential for every modern day enterprise. KEY UNIQUE FEATURES OF THIS COURSE: • Learn to construct models that apply to all functional areas: nance, accounting, marketing, human resources, budgeting, planning, statistical studies, forecasting, biological and chemical trials, econometrics • Gain insights into building Securitization Models, Monte Carlo Analysis Models, Share Price Forecasting Models, Risk-Return Pricing Models, Consumer Finance Models, Budgeting Models, Vehicle Finance Models, and many more • Examine several World Class nancial Models and the code behind the Models • Understand how to employ the IPO Framework in constructing Models • Master techniques that works with both Excel and User Forms as two distinct platforms for developing sophisticated nancial models is course is not a “how-to” on Excel; we expect that participants will be familiar with Excel at a professional level. Participants should have a professional working knowledge of Excel for a reasonable period. Amongst others, a key intent of this Advanced Financial Modelling master class is to expose participants to ‘advanced’ features of Excel and its programming counterpart, Visual Basic for Applications. Participants will learn the fundamentals of writing Visual Basic code while advanced code writing is learnt by investing time in the valuable reference material provided on the program DVD. GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates
- 3. TEACHING METHOD: is is a very intensive and practical interactive course. Participants will be expected to work on mini-assignments and exercises individually and in groups. Also, participants will receive valuable background reading material, cases and course notes. In addition, all participants will receive a complimentary copy of CapInvest, a nancial model developed by the course instructor, which is based on the same concepts that will be discussed in the course. PRACTICAL INFORMATION: As this course require practical exercises, please come along with your laptop with Excel already installed. You will also need to do some need pre-course preparation using reading material supplied four (4) weeks before the course. YOUR FACILITATOR: Viswanath Tumu Vish is principal consultant of Vish Tumu Associates, a U.S. and India based consulting rm that advises international nancial institutions, including the World Bank, the International Finance Corporation, and the Inter- American Development Bank. He has carried out assignments in more than 24 countries, most recently in Jakarta, where he advised the World Bank and the Government of Indonesia on measures to strengthen and encourage the development of Non- Banking Financial Institutions. Many of his recommendations are in the process of being codi ed into law, including, the recommendation to allow leasing companies to claim depreciation in computing taxable income. Vish has more than 14 years of experience in nancial modelling and Microsoft Excel, and has developed CapInvest a sophisticated nancial model that is used by nancial institutions to create a range of nancial and savings products. He holds a Masters degree in International Finance from Columbia University, New York and is a registered Chartered Accountant from the Institute of Chartered Accountants of India. He is a co-author of a book on leasing “ e Principles and Practice of Leasing” published in the U.K. in 1990, has published several articles, and is a regular contributor to the World Leasing Yearbook, published by Euromoney Publications, U.K. Re ecting his expertise with Excel, he was invited by Microsoft Corporation to beta test the new O ce 2007. In the past, he worked with the ICICI Bank, the premier development bank in India and AF Ferguson & Co. (part of Deloitte), in India. GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates
- 4. SPECIALISED IN HOUSE TRAINING SOLUTION! Global Prospectus enables a platform for cutting edge, solution driven and innovative in- house training that are specially and speci cally customised for your department, company or organisation at reasonable cost, at your venue and for your convenience! We provide strategic insight of absolute value… For your in-house training solution, please drop us an e-mail, give us a call or send us a fax. ABOUT US GLOBAL PROSPECTUS TRAINING is an information and training entity specializing in the delivery of strategic insights and alternatives to both the private and public sectors. ese insights are designed for a cross spectrum of industries and Government departments and are presented to market through Business Forums, Workshops, Conferences and In-House Training. “ inking beyond the Obvious” is the mantra and vision of our organisation. is vision has set Global Prospectus Training apart from the usual actors by addressing the individual needs and concerns of each delegate through an expertly designed questionnaire as well as producing Business Forms and Workshops with a view to increase pro active strategies and policies. ese are some of the key areas in which Global Prospectus Training currently operates: Engineering, IT, Oil & Gas, Agriculture, Mining, FMCG and Retail, Financial Services, Marketing and Public Relations, Medical and Pharmaceutical, HR Management, Small and Medium Enterprise amongst others GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates
- 5. COURSE AGENDA DAY 1 AM Introduction to Financial Modeling Introduction • De nition of nancial Modeling • e six distinct components in nancial • Modeling: process, situation, variables, relationships, dimensions, decision-making • What is not a nancial model? • Advantages of the nancial Modeling Framework • e IPO (Input, Processing and Output) framework • Examples of variables and relationships • Layout issues in building a nancial model • Examples of types of models • Examples of models in non- nance areas: • Marketing, Human Resources Databases and Spreadsheets • Di erence between a database and a spreadsheet • Role of a database in relation to a spreadsheet • e need to intermingle in a solution • Examples of production quality relational databases • Other relational databases • Programming language for manipulating databases • e important role of excel as a at le database • Excel architecture overview • Databases wrap-up Overview of Excel 2010 • New features • e Ribbon • Excel 201 statistics Accessing Excel • Two ways to access the functionality of Excel: GUI and Code • Overview of code • Objects • Collections • Platforms for building models: Worksheet and User Form Modeling Platforms • Example of employing a Worksheet as a platform for a modelling situation • Example of employing a User Form as a platform for a modelling situation Requirements for Developing Financial Models • Model building concepts: variables, relationships, inputs, processing, outputs, layout issues • Technical skills in Excel: excel object hierarchy, object properties and methods, excel events, Visual Basic for Applications GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates
- 6. COURSE AGENDA DAY 1 PM Advanced Excel Overview of Advanced features of Excel and its signi cance in Financial Modeling • Arrays • Functions • Names • Number formatting • Data validation • Excel Controls • Report Manager add-in • Data management • What-if analysis • Grabbing data from the Internet Excel Arrays • Examples of use of arrays to solve advanced problems • De ning arrays • Entering array constants • Cells holding an array formula Data Validation • Basics • Defaults • Lists • Custom • Prompts Excel Functions • Sources of Excel’s functionality • Types of Excel functions: built-in, Analysis • ToolPak, user-de ned, add-ins • 9 categories of built-in Excel functions • Functions: user de ned • Functions: add-ins • Using a function and determining function parameters • Function return value • Creating a user de ned function • Examples of some important functions • Using Edit / Go To / Special Excel Naming Scheme • Importance of names in Excel • Naming cells, constants and formulas • 3-D Names • Naming bene ts • Names examples GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates
- 7. COURSE AGENDA DAY 1 PM Excel Formatting Scheme • Formatting values • Number formatting options • Custom number format • Examples of Custom Format • Formatting codes • Date and time formatting codes • Formatting examples COURSE AGENDA DAY 2 Advanced Excel Types of Excel controls • Placing controls on a worksheet • Linking controls to cells • Attaching procedures to controls Excel Data Management Features • Data management features in Excel • Five stages of data manipulation • e “ ree I’s” of sources of data - Imported- Inputted- Internet • Data lter • Operators for ltering • Advanced ltering procedures • “D” functions • Data management examples Excel Pivot Tables Feature • What is a Pivot Table? • Pivot table basics • Pivot table examples What-if Analysis • Types of “What If?” Analysis in Excel: Data • Tables, Goal Seek, Scenario Manager, Solver • Customized “What if?” analysis • Data Tables: one-variable and two-variable • Goal Seek • Solver • Solver algorithms and examples • Scenarios GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates
- 8. COURSE AGENDA DAY 2 Introduction to Business Intelligence • Using the new Power Pivot in Excel 2010 • Manipulating ‘Relational’ databases with Power Pivot • Example of manipulating a relational database with 1.2 million records Grabbing Data from the Internet • Web queries • Import commands • Creating a new Web query COURSE AGENDA DAY 3 Learning to Program Excel Introduction to Programming • MS O ce programming architecture • Entry points into Excel • Graphical User Interface tools vs. code • Using objects, properties and methods to manipulate Excel • Examples of VBA Code • Ways to execute code • Built in modules vs. user modules • Bene ts of Code • Executing Visual Basic code • Manipulating Excel with objects, properties and methods Excel Object Hierarchy • Scope of object properties and methods • Object collections • Microsoft Excel object models • Object properties • Object methods Excel Event Procedures • Events supported by Excel • Using Events to hook code Excel Macro Recorder • Excel macro recorder • Hands-on programming of simple tasks in Excel Writing Visual Basic Code • Overview of Visual Basic code • Parts of a Visual Basic procedure GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates
- 9. COURSE AGENDA DAY 3 Visual Basic Decision Structures • Visual Basic decision Structures • Visual Basic control Structures Visual Basic Controls • Visual Basic controls • Visual Basic user forms • Visual Basic toolbox • Alternatives to forms • Visual Basic Functions Useful Objects • A Closer look at the Range Object e Range Object: properties and methods • e Worksheet Object: properties, methods and event Other • Variables and Constants, Arrays, Operators COURSE AGENDA DAY 4 Case Studies Modeling Projects “Building on the exposure to Advanced Excel and VBA in prior sessions, participants proceed to examine, interactively, the architecture of several real-life models and the code behind these models.” Securitization Model is case study illustrates an example of an educational institute in an emerging market country faced with the situation of either taking a loan from a bank or securitizing its fee income to nance a school building. Participants learn the value of building a Dashboard with relevant parameters to arrive at a decision as to the amount of fee income in future years to be securitized, the rate of interest to be paid to the bank, the number of years of fee income to be securitized and so on. is case illustrates how VBA can transform an accountant from merely preparing projected nancial statements of a scenario into a decision-maker where relevant information is marshaled to arrive at an optimal decision. GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates
- 10. COURSE AGENDA DAY 4 Developing a Dashboard for an investment decision is case illustrates the important concept of a ‘Black Box’ in preparing a nancial model to isolate important decision making information and variables and to assist users to perform useful tasks without attention diverted by large data; essentially, an executive is faced with a situation wherein a considerable amount of time could be spent in building a great spreadsheet that clearly isolates the IPO components of model-building: Inputs (variables), Processing (revenue forecasting engine, double-entry of items, and a trial balance) and Output ( nancial statements such as P&L, Balance Sheet, Sources and Application of Funds, Ratio Analysis); while the executive would have tolled endlessly to prepare this elaborate model, from a decision-making perspective, such a spreadsheet could prove to be useless: the spreadsheet needs to be visualized as an ‘engine’ that requires no human intervention where variables are manipulated by a dashboard that also incorporates interactivity. Once this is accomplished using VBA, this executive is transformed into a true decision-maker. Monte Carlo Simulation An executive in the present-world lives in a World full of uncertainty; thus, to carry out a Project Appraisal using conventional tools is unrealistic since the assumptions in the Project Appraisal will remain a mute spectator. In other words, the IRR and NPV are unrealistic – to be meaningful, these parameters need to be the outcome of variables subject to probabilities. Enter Monte Carlo Simulation: this case uses a simple project to subject one of the assumption in the Project Appraisal (the revenue assumption) to a range of probability outcomes and to calculating the resulting NPV of the project – this exercise provides greater insights into the sensitivity of a project to changes in underlying variables. A Monte Carlo simulation is carried with a VBA Loop - participants get a ring-side view of the technical issues. is simulation involves 10,000 iterations with each iteration producing a NPV, corresponding to a probability value attached to the Revenue assumption. Simulating a HP Financial Calculator is model simulates the nancial functions in a HP nancial calculator using Visual Basic Code and demonstrates the fact that Excel’s built-in nancial functions alone such as Present Value, PMT and the others cannot build the simulator - these functions can generate an answer given information on the remaining 4 variables – however, calculation of any of the functions given info on the other variables is ruled out because a cell can be used for entering either a formula or a constant (but not both, as required by the simulator). us, Excel functions cannot build the calculator – the use of VBA functions (PV, PMT, I, NPER, FV) is required to build the nancial calculator. GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates
- 11. COURSE AGENDA DAY 4 Risk-Return Pricing Model Financial Institutions in developing countries face the stark reality of bad debts and defaults in transactions, especially, on transactions with SMEs. How does a Financial Institution quantify the Risk of a Transaction and translate this Risk into an appropriate Risk Premium that is added to the Risk-Free rate for pricing a Transaction? is case study illustrates the innovate use of VBA Controls to visualize Risk from two perspectives and to translate Risk into Risk Premium. While the functionality of the model can be recreated using a basic spreadsheet, the capability to engage a user in the process is un-paralled with the use of Controls that remove the mathematics and complexity of calculating the Risk Premium from the user interface to be replaced by intuitiveness of controls that spring to life when risk parameters are manipulated. Vehicle Financing Model is case is an excellent introduction to participants to get exposed to VBA controls to develop an ‘error resistant’ model to price vehicle nancing transactions using discounted cash ow components of (a) the amount to be nanced; (b) the duration of the nancing transaction; (c) the rate of interest on the transaction; (d) future value of vehicle (if any); the model enables a user to select from a dealer’s inventory of used-cars using a drop-down control and to calculate the period repayment for nancing of the vehicle; the model incorporates several features to minimize the risk of errors in entry. An Automation Scenario One of the most useful applications of VBA is of automating several tasks; automation enables these tasks to be carried out repeatedly and with no error, thereby leading to enhancement of productivity. is example of a Textile company, presents a situation wherein data is imported from a database and modi ed to suit company requirements; this overall task is broken into FIVE distinct sub-tasks and participants learn to develop a VBA procedure to address each sub- task. Once the ve VBA sub- procedures are tested to ensure they work as expected, a Master Procedure is developed that calls individual procedures to ensure these work in harmony, thereby transforming a time-consuming and error-prone process into a highly productive activity. PROGRAMME SCHEDULE All timings are approximate due to the interactive nature of the course. 08:00 – 08:30 Registration and early-morning tea 08:30 – 10:00 Facilitator’s opening remarks and morning session 10:00 – 10:30 Mid-morning refreshments and networking break 10:30 – 12:30 Mid-morning session 12:30 – 13:30 Networking luncheon 13:30 – 15:30 Afternoon session 15:30 – 15:45 Questions and closing remarks 15h45 End of training GLOBAL PROSPECTUS TRAINING (PTY) LTD. Chief Executive O er - Dhevaraj Pillay Johannesburg - Tel: +27 11 781 6222 Fax: +27 11 781 6044 Marketing - m2@globalprospectus.co.za Auditors - Russell Bedford SA (Jhb) Inc. Pietermaritzburg - Tel: +27 33 391 4229 Fax: +27 33 391 5722 Design - www.designmaster.co.za (071 018 8355) Legal - DA Morris & Associates