Corporate and Project Finance Modeling : Theory and Practice.
Title:
Corporate and Project Finance Modeling : Theory and Practice.
Author:
Bodmer, Edward.
ISBN:
9781118854464
Personal Author:
Edition:
1st ed.
Physical Description:
1 online resource (627 pages)
Series:
Wiley Finance
Contents:
Corporate and Project Finance Modeling: Theory and Practice -- Contents -- Preface -- Acknowledgments -- Part I: Financial Modeling Structure and Design: Structure and Mechanics of Developing Financial Models for Corporate Finance and Project Finance Analysis -- Chapter 1: Financial Modeling and Valuation Nightmares: Problems That Financial Models Cannot Solve -- Chapter 2: Becoming a Black Belt Modeler -- Chapter 3: General Model Objectives of Structuring Transactions, Risk Analysis, and Valuation -- Chapter 4: The Structure of Alternative Financial Models -- Structure of a Corporate Model: Incorporating History and Deriving Forecasts from Historical Analysis -- Use of the INDEX Function in Corporate Models -- Easing the Pain of Acquiring PDF Data -- Structure of a Project Finance Model That Accounts for Different Risks in Different Phases over the Life of a Project -- Reconciliation of Internal Rate of Return in Project Finance with Return on Investment in Corporate Finance -- Structure of an Acquisition Model: Alternative Transaction Prices and Financing Terms -- Structure of an Integrated Merger Model: Forecasting Earnings per Share -- Chapter 5: Avoiding Bad Programming Practices and Creating Effective Auditing Processes -- How to Make Financial Models More Efficient and Accurate -- Creating Shortcut Keys and Setting Up the Model Area So You Can Build Your Model Quickly -- Color Conventions and Creating the SHIFT, CNTL, C Macro to Color Inputs -- Creating an Audit Page That Tells You Where Errors Are Located -- Chapter 6: Developing and Efficiently Organizing Assumptions -- Assumptions in Demand-Driven Models versus Supply-Driven Models: The Danger of Overcapacity in an Industry -- Creating a Flexible Input Structure for Model Assumptions -- Alternative Input Structures for Project Finance and Corporate Finance Models.
Setting Up Inputs with Code Numbers and the INDEX Function -- Chapter 7: Structuring Time Lines -- Timing in Corporate Finance Models: Distinguishing the Historical Period, Explicit Period, and Terminal Period -- Development to Decommissioning: Phases in the Life of a Project Finance Model -- Timing in Acquisition Models: Separating the Transaction Period, the Holding Period, and the Exit Period -- Structuring a Time Line to Measure History, Explicit Periods, and Terminal Periods in Corporate Models and Risk Phases in Project Finance Models -- Computing Start of Period and End of Period Dates -- TRUE and FALSE Switches in Modeling Time Periods -- Computing the Age of a Project in Years on a Monthly, Quarterly, or Semiannual Basis -- The Magic of a HISTORIC Switch in a Corporate Model -- Transferring Data from a Corporate Model to an Acquisition Model Using MATCH and INDEX Functions -- Chapter 8: Projecting Revenues, Expenses, and Capital Expenditures to Derive Pretax Cash Flow -- Transparent Calculations of Pretax Cash Flow -- Inflation and Growth Rates in Calculations of Pretax Cash Flow -- Valuation Analysis from Prefinancing, Pretax Cash Flow -- Chapter 9: Moving from Pretax Cash Flow to After-Tax Free Cash Flow -- Working Capital Analysis -- Problems in Computing Depreciation Expense in Corporate Models Involving Asset Retirements -- Portfolios of Assets with a Vintage Process -- Accounting for Asset Retirements in Corporate Models -- Alternative Methods for Deriving Retirements Associated with Existing Assets in Corporate Models -- Depreciation Issues in Project Finance Models -- Modeling the Change in Deferred Taxes in Corporate Models -- Taxes Paid versus Taxes Booked: Change in Deferred Tax Liability -- Adjusting the Tax Basis in an Acquisition.
Chapter 10: Adding Debt to a Corporate or Project Finance Model by Programming Cash Flow Waterfalls -- Adding the Debt Schedule to a Financial Model -- Modeling Scheduled Debt Repayments -- Connecting Debt to Cash Flow in Corporate Models -- With a Structured Process, You Can Model Any Cash Flow Waterfall -- Defaults on Debt and Measuring the Debt Internal Rate of Return -- Assessing Risk and Return Characteristics of Subordinated Debt -- Chapter 11: Alternative Calculations of Equity Distributions -- Modeling Dividend Distributions -- Computing a Target Capital Structure through Simulating New Equity Issues and Buybacks -- Chapter 12: Putting Together Financial Statements and Calculating Income Taxes -- Computation of Taxes Paid and Taxes Deferred -- Cash Flow Statement and Balance Sheet -- Part II: Analyzing Risks with Financial Models: Sensitivity Analysis, Scenario Analysis, Break-Even Analysis, Time Series, and Monte Carlo Simulation -- Chapter 13: Risk Assessment: The Centerpiece of All Valuation, Contracting, and Credit Issues in Finance -- Six Alternative Ways to Assess the Risk of a Company, a Project, or a Contract -- Using Direct Risk Assessment to Measure Cash Flow and Financial Ratios -- Investment Banker Number 1: Valuation from Financial Theory and Risk Measurement with Beta -- Adviser Number 2: Accretion and Dilution from Financial Models -- Chapter 14: Defining, Describing, and Assessing Risk in a Risk Allocation Matrix -- Chapter 15: Presentation of Risk Analysis through Adding Sensitivity Analysis to Financial Models -- Setting Up Data for Making Graphs by Converting Periodic Data into Annual, Semiannual, or Quarterly Data -- Using the INDIRECT Function to Automate Conversion to Time Period Data -- Making Flexible Graphs for Sensitivity Analysis -- Step 1: Using F11 or ALT, F1 to Make a Quick Graph.
Step 2: Illustrating the Effect of Selected Variables with Spinner Buttons and Drop-Down Forms -- Step 3: Adding Titles to a Graph with Summary Statistics -- Optional Step 4: Making Dynamic Graphs with the OFFSET Function or the #N/A Symbol -- Chapter 16: Using Financial Models to Establish Break-Even Points for Key Input Variables with Data Tables -- Establishing Break-Even Criteria When Analyzing Financial Models -- Mechanics of Using Data Tables to Compute Break-Even Points Automatically -- Step 1: Creating a Data Table -- Step 2: Using MATCH and INDEX Functions to Find Break-Even Points -- Step 3: Attaching Spinner Buttons for Sensitivity Analysis -- Creating Data Tables Using VBA Instead of the Data Table Tool -- Summary of Break-Even Analysis -- Chapter 17: Constructing Flexible Scenario Analysis for Risk Assessment -- Mechanics of Scenario Analysis -- Step 1: Setting Up a Master Scenario Page with a Scenario Number -- Step 2: Entering Data for Different Input Variables in the Master Scenario Page -- Step 3: Using the INDEX Function to Find Input Data Associated with a Scenario Number -- Step 4: Adding a Drop-Down Box to Run Scenarios from Different Places in the Workbook -- Step 5: Linking Financial Model Inputs to Scenario Page -- Step 6: Linking a Set of Outputs alongside the Scenario Inputs in the Master Scenario Page -- Step 7: Creating a One-Way Table That Lists the Results of Multiple Scenarios -- Using VBA Code to Create a Scenario Analysis -- Creating a Macro That Assigns Variables from the INDEX Line of the Scenario Page to the Financial Model Inputs -- Getting the Best of Both Worlds: Creating a Special Custom Scenario That Allows Use of Spinner Buttons and Drop-Down Boxes -- Chapter 18: Generating Tornado Diagrams, Spider Charts, and Waterfall Graphs.
Tornado Diagrams That Display Which Variables Have the Largest Effect on Value and Which Variables Have the Least Effect on an Output Variable -- Creating a Tornado Diagram by Extending Scenario Analysis -- Creating a Tornado Diagram Using a Two-Way Data Table -- Spider Diagrams That Illustrate How Each Range in Input Variables Affects an Output Variable -- How to Create a Spider Diagram Using a Two-Way Data Table -- Presenting Sensitivity Analysis with a Waterfall Chart -- Chapter 19: Adding Probabilistic Risk Analysis and Time Series Equations to Financial Models -- Definition of Some Terms for Adding Stochastic Analysis to Your Financial Models -- Using Probability Distributions with Spreadsheet Functions Rather Than Equations with Greek Letters -- Chapter 20: Taking the Mystery out of Applying Time Series Analysis and Monte Carlo Simulation in Financial Models -- Step-by-Step Procedure to Incorporate a Monte Carlo Simulation into Your Models -- Step 1: Building a Flexible Deterministic Financial Model That Accepts Wide Variation in Cash Flow -- Step 2: Creating Time Series Equations for Key Assumptions in a Financial Model -- Step 3: Adding Monte Carlo Analysis without VBA Code -- Step 4: Presenting Results of Simulations in a Frequency Chart -- Step 5: Creating Monte Carlo Scenarios with Simple VBA Code -- Chapter 21: Constructing Probability Distributions with Trends, Mean Reversion, Price Boundaries, and Correlations among Variables -- Starting Point for Developing Time Series Equations- Brownian Motion and Normal Distributions -- Testing the Assumption That Input Variables Are Normally Distributed -- Price Boundaries and Short-Run Marginal Cost -- Mean Reversion and Long-Run Equilibrium Analysis -- The Effect of Mean Reversion Parameters on Risk Distributions from a Financial Model.
Modeling Correlations among Variables in Time Series Equations.
Abstract:
A clear and comprehensive guide to financial modeling and valuation with extensive case studies and practice exercises Corporate and Project Finance Modeling takes a clear, coherent approach to a complex and technical topic. Written by a globally-recognized financial and economic consultant, this book provides a thorough explanation of financial modeling and analysis while describing the practical application of newly-developed techniques. Theoretical discussion, case studies and step-by-step guides allow readers to master many difficult modeling problems and also explain how to build highly structured models from the ground up. The companion website includes downloadable examples, templates, and hundreds of exercises that allow readers to immediately apply the complex ideas discussed. Financial valuation is an in-depth process, involving both objective and subjective parameters. Precise modeling is critical, and thorough, accurate analysis is what bridges the gap from model to value. This book allows readers to gain a true mastery of the principles underlying financial modeling and valuation by helping them to: Develop flexible and accurate valuation analysis incorporating cash flow waterfalls, depreciation and retirements, updates for new historic periods, and dynamic presentation of scenario and sensitivity analysis; Build customized spreadsheet functions that solve circular logic arising in project and corporate valuation without cumbersome copy and paste macros; Derive accurate measures of normalized cash flow and implied valuation multiples that account for asset life, changing growth, taxes, varying returns and cost of capital; Incorporate stochastic analysis with alternative time series equations and Monte Carlo simulation without add-ins; Understand valuation effects of debt sizing, sculpting, project funding, re-financing,
holding periods and credit enhancements. Corporate and Project Finance Modeling provides comprehensive guidance and extensive explanation, making it essential reading for anyone in the field.
Local Note:
Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2017. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.
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