Why Learn Financial Modelling ?

What is financial modelling


Why should I learn Financial Modelling?

Do I need to know Financial Modelling & Valuations when I am already MBA or CA or CFA ?

First of all we need to know that this is not just Excel, this is about financial modelling and Valuations. Excel is just a tool to create Financial Model and Valuations. Knowledge of Excel is just a basic prerequisite.

Many times my students ask me that do they really need to learn Financial modelling & valuation. My answer has been straight forward “Yes”, they have to. It is not matter of choice, it is mandatory if you want to work in the field of main stream Finance.

When you want to work in main stream Finance profiles like in Investment Banking, Credit research, Equity research, project appraisal, consultancy, private equity or hedge funds, you will be working on a financial or valuationsmodel every day.

When you work in the above given industries on the Finance profile, you start to work there as a Financial Analyst. You may see different designations in different companies, but your job will be to read & understand Annual Reports or quarter files and check press releases and update, modify or create financial and valuation models.

So there if you have not gained sufficient knowledge about Financial Modelling & Valuations in advance, you will find it very difficult to sustain there.

Let’s be more practical, you will not be even able to clear job interviews if you have not practical knowledge of Finance. If you see Job descriptions of Finance profiles, you will see that recruiters prefer to have experienced candidates. So you are a fresher and looking for Finance jobs and want to appear for the interview, practical knowledge of Financial Modelling and Valuations will give you lot of advantage and help to compete even with experienced candidates.

So when companies recruit you for Finance Jobs, they preferably check all theoretical finance concepts on financial statements, Ratio analysis, accounting principles and valuations etc. They also test your ability to apply financial concepts by giving you some practical situations.

That’s where you find yourself in a trouble because B schools don’t teach you practical application. B schools teach all bookish concepts which is not at all sufficient to clear big company’s Finance interviews and on the other hand, practical application of Financial Modelling and valuations will really place you above all others candidates.

If you check any Job portal, you will notice many finance roles have “financial modelling” listed as a core skill? Financial modelling courses is now one of the most sought after skills in today’s corporate world and demand for financial modelling experience continues to outstrip supply!

Expertise in financial modelling is emerging as one of the most highly sought after pre-requisites. Earlier eventhe term “financial modelling” wasn’t much widely used as it is being used today. Earlier Financial Modelling was a skill required only for the specialist within Corporate Finance or M&A transactional modelling. Ithas now become a core requirement of the mainstream finance role.

I have been into training for last 7 years since 2009 and have trained more 2000 students and I have seen students literally changing and advancing their career in the field of Finance. Now it is up to you if you would like to continue to work where ever you are working or want a change in your career path.

I don’t say that you should learn Financial Modelling & Valuations from Investment Banking Institute only, but I strongly recommend to do this course from any good institute. Look for various institutes on Google and look for the content of course, meet with faculty, take demo session, talk to the ex- students of the institute and then make the best investment of your life.

Best of luck.

Manoj Kumar

Senior Faculty

Investment Banking Institute

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