Table of Contents
- What is financial modeling?
- What does a financial model do?
- What are the skills required to pursue a financial modeling course?
- What are the application requirements for a financial modeling course?
- Top universities for financial modeling courses–
- What subjects will I learn?
- How much does a financial modeling course cost?
- Career options
- Key takeaways
Financial modeling courses have been gaining a lot of popularity by the day. It is a core skill that is almost mandatory for anyone who wants to build a career in finance. Additionally, the output of a financial model is used for decision-making and performing financial analysis in a company. Here’s everything you need to know about a financial modeling course.
What is financial modeling?
Simply put, financial modeling is the process of creating a consolidated summary of a company’s earnings and expenses and is used to forecast future performances and predict the growth scale. Generally speaking, the prediction is based on the company’s past performance and assumptions and estimates about the future. Moreover, a financial model typically involves preparing an income statement, a balance sheet, a cash flow statement, and a few additional and supplementary reports.
A financial model is also used in the valuation of a company and comes in handy when the company wishes to raise capital or to make comparisons with other companies in the same industry.
What does a financial model do?
Since a financial model is a numeric representation of a company’s past and present operations, it forecasts the future. Analysts generally use the financial modeling tools for decision making, often to estimate the costs and profits of any proposed projects. As a matter of fact, the models are used to allocate resources and funds, budget planning, and test various unforeseen scenarios that might arise in the business. Take up a financial modeling and valuation course to gain in-depth knowledge on the subject.
All in all, a financial model is used for the following purposes-
- Raising capital
- Business valuation
- Planning for the future
- Preparation of budgets
- Making business and asset acquisitions
What are the skills required to pursue a financial modeling course?
You must have the following skills if you are looking to take up a course in financial modeling-
- A strong understanding of accounting systems and financial statements, since you must know how to read the financial statements and understand concepts like depreciation, accruals, amortization, and revenue recognition.
- In addition to this, you also need to have a knowledge of how to prepare and link the balance sheet, income statement, and cash flow statement.
- Understanding of how MS Excel and other similar spreadsheet programs work. Strong knowledge of keyboard shortcuts is essential as it helps to save time. You will also need to know the various formulas to perform calculations and functions for financial analysis.
- Attention to detail as the course is very numeric focused. Financial models also tend to get complex at times, and it is important to be able to pay attention and notice small changes.
- As a matter of fact, the ability to extract pertinent data from large amounts of information and then compile them in a simple format is also a plus point.
- Lastly, problem-solving abilities as the issues are often logical and numeric in nature. A financial analyst must follow the logical system of adding information so that it is clear to anyone who uses the file.
What are the application requirements for a financial modeling course?
All in all, to pursue a financial modeling course, there are different criteria depending on the time of application. Read ahead to know more.
If you are pursuing this course as an undergraduate, then you must have the following documents-
- Completion of 10+2 from a recognized board of education along with mathematics, accounting and finance as the subjects
- Achieve a minimum of 40% in the 10+2 exams
Please check all other criteria on the university website as it varies from one university to another.
For post-graduates who want to do a financial modeling course, the admission criteria are–
- You must have a bachelor’s degree from a recognized college or university
- You must meet the required percentage that has been set by the university
- Sitting for an entrance exam prior to admission is a must.
If you choose to go to an international university, then you must visit the website to go through the specific requirements. A few standard criteria are-
- Statement of purpose
- Letter of recommendation
- Curriculum Vitae
- Standard test scores (GMAT or GRE)
- Language proficiency test (IELTS or TOEFL)
Tip: Have all the documents ready in advance, at least 6 months before application. In case you are shortlisted, you will receive an acceptance letter that can be used to apply for a student visa and a scholarship.
Top universities for financial modeling courses–
- University of Pennsylvania
- Erasmus University Rotterdam
- University of California
- HSE University
- Duke University
- Macquarie University
What subjects will I learn?
Now that you have decided to pursue a financial modeling course, you will be learning the following subjects-
- Corporate finance
- Portfolio management
- Risk management
- Financial markets
- Assessment of risk in equity markets
- Risk management in derivatives
- Cost of capital
- Estimation of risk and return of any portfolio
How much does a financial modeling course cost?
The cost of pursuing a financial modeling course varies from college to college and depends on the kind of course that you opt for. All in all, the comprehensiveness of the course and the reputation of the college play a role in determining the basic fee as well. Generally speaking, the fee ranges from USD 15,000-25,000, depending on the above-mentioned factors. Also, additional expenses like the cost of transport, food, and other expenses will have an impact on the overall cost. Some universities offer scholarships, and you must apply for the same to significantly bring down the costs.
After completion of a financial modeling course, there are various career options available. Some of the most sought after and highly paid careers are-
- Investment banking
- Portfolio management
- Financial analyst
- Risk management analyst
- Equity research analyst
What is the salary that I can expect after completion of my degree?
The demand for people who have completed the financial modeling courses is on the constant rise. There are a lot of work opportunities that depend on your educational background, degree, university, and experience. The average salary that a person with a degree in financial modeling can expect would be approximately USD 97,274 per year.
Finance and numbers have always been the backbone of any company in any industry and will continue to be the same, especially in the times to come. Now that people are moving towards a digital age, the need to compute financial models and statements is becoming critical. There are innumerable opportunities and doorways that open once a financial modeling course is completed. Well done on this fantastic choice and good luck on this exciting journey.
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Q1. After completion of the course, what are the employment opportunities?
Answer- A financial modeling course is one of the most important and highly paid careers in the world. People with degrees can get jobs in many financial institutions like financial analysts or investment bankers.
Q2. Where are the best universities to study financial modeling?
Answer- Some of the best universities to pursue a financial modeling course are in the United States of America, like the University of Pennsylvania and the University of California.
Q3. How do I apply to an overseas university for a financial modeling course?
Answer- You must visit the website of the particular university you wish to apply for, to know the specific application requirements. Generally, there are some documents like the statement of purpose, letter of recommendation, transcripts, and language test results that are common.
Q4. Can I apply for a scholarship?
Answer- Yes, there are some universities that offer scholarships to students. Additionally, once you get your letter of acceptance from a university, you can check its fee structure, and subsequently apply for a scholarship or a grant.