The document provides a comprehensive guide for creating a financial model using Excel, developed by former Deloitte management consultants. It includes objectives, detailed instructions on planning and designing a financial model, key formulas, and templates for various components such as inputs, calculations, and outputs. Additionally, it emphasizes the importance of having a clear goal and structure for effective financial modeling.

1. Create a
Financial Model
Training & Excel Templates
By Former Deloitte
Management
Consultants

2. 22
Objectives of this document
“ Learn how to create a Financial Model with a
Powerpoint training and Excel template created
by former Deloitte Management Consultants ”
“ Save your time by using our fully editable
PowerPoint slides and Excel sheets ”
Aurelien Domont
Slidebooks Consulting
Managing Director

3. 33
Table of content
How to build an Excel Financial Model?
What are the key formulas to use in your Financial Model?
3
4
What is Financial Modeling?1
How to plan and design an Excel Financial Model?2

4. 44
Financial modeling definition
• Financial modeling is the task of building an abstract representation
of a real world financial situation
• This abstract representation is called a financial model
• A financial model is designed to represent a simplified version of the
performance of a financial asset, a project, or any other investment
• A financial model is generally build around financial statements
such as the income statement, the balance sheet and the cash flow
statement
• The most commonly tool used to build a financial model is Excel
Definition

5. 5
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6. 66
Table of content
How to build an Excel Financial Model?
What are the key formulas to use in your Financial Model?
3
4
What is Financial Modeling?1
How to plan and design an Excel Financial Model?2

7. 77
Ensure that your are clear about your goal
 Switch off your computer
 Define the question your financial model needs to answer
 Identify the blank slides in your storyline that will have to be
completed by your financial model outputs sheet(s)
 Identify what will not be solved by your model
 Create and agree on a work plan
 Do a back of the envelope calculation to give you an idea of the
final answer

8. 88
Draw out a driver tree
Company Value
Creation
Increase net
operating
profit less
adjusted
Taxes (NOPLAT)
Improve
capital
allocation
Capital
deployment
Decrease
operating
expenses
Increase
gross profit
Cost of
capital
Decrease
manufacturing
costs
Increase
revenues
Reduce
distribution
costs
Reduce
selling
costs
Reduce
R&D costs
Reduce
administrative
costs
Improve product mix
Increase price
Decrease staffing
Reduce cost of inputs
Lower support functions costs
N/A
Reduce inventories
Optimize scheduling
Improve plant utilization
Lower Customer Service costs
Decrease staffing
Improve process
Increase volume
Optimize physical network
Increase productivity
Use alternative distribution
Increase Accounts payable
Improve capital investment
Reduce Accounts receivable
Example

9. 99
Identify what should be inputs, calculations and outputs
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InputsCalculationsOutputs

10. 1010
Draw out a schematic for how the spreadsheet will work
Inputs sheet #1
Inputs sheet
Calculation sheet #1
Calculation sheets
Outputs sheet #1
Outputs sheet
Calculation sheet #2

11. 11
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12. 1212
Table of content
How to build an Excel Financial Model?
What are the key formulas to use in your Financial Model?
3
4
What is Financial Modeling?1
How to plan and design an Excel Financial Model?2

13. 1313
Financial model structure
An effective Excel financial model should have the following structure:
1.Project
Description sheet
4.Inputs
sheet(s)
3.Calcula-
tion sheet(s)
4.Outputs
sheet(s)
+ -
X -..i
2.Worksheet
Description
3.Worksheet
Flow

14. 1414
1.The Project description sheet should include:
 The project name
 The name of the scenario
 A brief description of the project
 The model version
 The file name
 The name of the persons who prepared and reviewed the model
 The names of project sponsor and the project leader

15. 1515
1.Project description sheet Excel template
Project X
Version 1
Project Description
Scenario X
Project Name: Project X
Porject Category Category X
Business Unit: Business Unit X
Model Version: Version 1
Date prepared: 03-Jan-14
Mr Smith
Manager
Business Unit X
Michael Cant
Executive Manager
Business Unit X
Project Leader: Mr Smith
Manager
Business Unit X
Model Prepared By:
Project Sponsor:
Project Description
Insert a brief description of the project
Project Details
Double click
to access the
editable
Excel
spreadsheet

16. 1616
2.The Worksheet description should include:
 The Financial model purpose
 A worksheet overview with the name, the type and the description of each sheet
 If required, some guidance on how works each sheet
 The colour codes and formatting conventions used in the financial model
i

17. 17
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18. 1818
2.Worksheet description Excel template
i
Project X
Version 1
Worksheet Description
Scenario X
Sheet Name Sheet Type
Assumptions Input
Sheet X Calulations
Sheet Y Output
User Input cells 3,000,000$
Formula amounts 3,000,000$
Cells which you want to draw attention to 3,000,000$
Conditional formatting showing Active Scenario
Currency 4,000$
Negative currency (300,000)$
FTE figures (1dp) 1.5
Worksheet Overview
Financial Model Purpose
Exemple: To calculate the project X expenditure, net benefit and NPV
Color Codes
Formatting Conventions
Description
Input your financial model assumptions for
up to 5 scenarios. Select the active
Double click
to access the
editable
Excel
spreadsheet

19. 1919
3.The Worksheet Flow should include:
 A visual representation of the inputs sheet, calculations sheet(s) and outputs sheet(s)
 The relationship between each sheet of the document
 Links towards each sheet of the document in order to facilitate the navigation

20. 2020
3.Worksheet Flow Excel template
Project X
Version 1
Worksheet Flow
Scenario X
Assumptions
Inputs sheet
Project Resources
Cost
Calculation sheets
Financial Summary
Outputs sheet
Project P&L
Project Capex
Double click
to access the
editable
Excel
spreadsheet

21. 2121
4.The Inputs sheet should include:
 Your company standard assumptions:
Assumptions that are used to assess all the projects of the company

Your static assumptions:
Assumptions specific to your project and constant over the whole modeling period (e.g. tax rate)
 Your dynamic assumptions:
Assumptions specific to your project and changing over the whole modeling period (e.g. growth rate)
 The source and updated date of all assumptions
 The possibility to select your scenario

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4.Inputs sheet Excel template
Project X
Version 1
Assumptions
Scenario X
Scenarios
Input Active Scenario Number 4 1 2 3 4 5
Active Scenario Name Scenario X Base Worst Best Scenario X Scenario Y
Base Scenario Flag 1 1
General Company Assumptions Base Worst Best Scenario X Scenario Y
Company Tax Rate 30% 30% x x x x
Cost of Capital 11% 11% 8% x x x
Discount Rate 11% 11% 10% x x x
CPI (Wage) 3% 3% x x x x
CPI (non wage) 3% 3% x x x x
Insert assumption x x x x x x
Insert assumption x x x x x x
Insert assumption x x x x x x
Project Static Assumptions Base Worst Best Scenario X Scenario Y
Project Start Date 1-Jan-14 1-Jan-14 x x x x
Inflation Start Date 16-Jan-14 16-Jan-14 x x x x
Benefit Ramp Up Start Date 16-Jan-14 16-Jan-14 x x x x
Benefit Ramp Up Duration (Months) 6 6 x x x x
Gross Profit Margin per product 40% 30% 40% 40% 40% 40%
Insert assumption x x x x x x
Double click
to access the
editable
Excel
spreadsheet

23. 23
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