Prelims

08/29.25

Cover Sheet

This model component contains the log of changes and updates to the model with date, author, change details, and their impact on the output of the model.

Option Pricing Model

This model has two (2) types: Binomial Tree and Black-Scholes.

Initial Public Offering (IPO) Model

This model involves looking at comparable company analysis in conjunction with an assumption about how much investors would be willing to pay for the company in question.

Financial model

It is a structure that contains input data and supplies outputs.

Investment analysis

In this role, Modelers spend most of their time looking at mergers and acquisitions, capital, debt, equity, and public offerings.

Financial modeling

The process of building an abstract representation of a real-world financial situation.

Three-Statement Model

This is the most basic type of financial model.

Specification

This characteristic of the financial modeling process describes real-life situations, either qualitatively or as a set of equations.

Input sheet (1)

This model component is the only place where hardcoded data is permissible.

Budget Model

This model is typically designed to be based on monthly or quarterly figures and focuses heavily on the income statement.

Equity research analysis

In this role, Modelers make comparisons between corporations and seek to give a view of where future growth will come.

Discounted Cash Flow (DCF) Model

It is a specific type of financial model used to value a business.

PivotTable

This Excel function can help the financial modeler perform scenario analysis.

Aesthetic design skills

This characteristic is usually a challenge for financial modelers as data needs to be presentable and formatted, which would give credibility to the data.

Accounting knowledge

This characteristics allows a financial modeler to work on important aspects such as tax and cash flows

Forecasting Model

Rose wants to compare the monthly or quarterly figures of the budget model. What type of model must Rose build?

Finalizing outputs

This step in building a streamlined version model involves linking the calculations to the outputs page.

Numeracy skills

Nora has the ability to make rough estimates quickly and is able to spot errors easily. She can easily determine the sales revenue given how many units were sold and the product price. What skills does Nora have?

Building Inputs

Romeo and his team are now building the model. They document all assumptions and source referencing in entering the data. What steps are they taking?

Peer and client review of the draft model

Romeo and his team are gathered together to ensure that the model meets its purpose, check the expected outputs and how the model operates in practice.

Input Sheet (2)

Emil wants to enter the consumption data, assets and depreciation data, inflation, and indices. Where should Emil enter the hardcoded data?

Designing inputs (1)

Jay is building a streamed line version model, and he is currently formatting the model so that the calculation can be linked to it. What step is he taking?

Desiging Inputs (2)

This step in building a streamlined version model involves getting the input data into the right format or layout so that the calculation can be linked to it.

Building outputs, summaries, charts, and reports

In the process of building the model, Romeo and his team continue to test and check for formula and logic errors. What steps are they taking?

Use each column for the same purpose

What rule must Rose observe if she wants to develop a model involving time series?

Consolidate before entering the data into the model

If the data is provided in a weekly format, but the output is required as monthly, what must be done?

It lacked dynamic linking of variables

A financial model was rejected because changes in input did not update key outputs. What does this reveal about the model's structure?

Maintaining the model

Romeo and his team have completed the model and handed it to the users. Rome and his team are providing updates to ensure that the model is working properly. What step are they taking?

Design an interface suitable for their needs

What must Dian primarily do when creating a model for others?

Conceptual modeling

Leslie, a financial modeler, understands the transaction, business, or product being modeled. What skills does Leslie have?

Update the model with flexible inputs to assess assumption effects

A startup founder presents a financial model for a new venture, but the model lacks scenario flexibility and only displays static results. As a consultant, what is the MOST critical feedback you should give?

Separate each major component into its dedicated tab with a consistent format

You are auditing a multi-tab model that consolidates five business units. Each unit has its own financial tab, but charts, ratios, and inputs are scattered. What best-practice layout should you recommend?

The model lacks automated input-output integration

An investment modeler's report shows balanced statements but reacts incorrectly when input assumptions are changed. What modeling flaw does this indicate?

Split the charts and ratio calculations into dedicated worksheets

What should a modeler do to prevent structural issues when a worksheet becomes excessively long due to added charts and ratio calculations?

Set inputs weekly and convert to a monthly output using pivot tables

You are building a time-sensitive forecasting model with data sourced weekly, but stakeholders need monthly output. What structure strategy is MOST appropriate?