All equity valuation models, except perhaps the book value approach, involve making a certain amount of assumptions or estimates. And,...

Free cash flow is one of the critical metrics in valuation and project finance. However, calculating FCF accurately can be tricky,...

Calculating depreciation under the straight-line method is fairly easy. But modeling it for forecast purposes is quite tricky. Many...

Introduction: Days Sales Outstanding (DSO) serves as a critical metric in financial analysis, reflecting a company's effectiveness in...

I was reviewing one of the financial models (in MS Excel) that used a lot of the IF construct. Although I generally recommend users to...

company has two sources of capital: (i) Equity and (ii) Debt. But there are certain sources that are in between equity and debt. One such...

One of the key equity valuation metrics for most industries is the Price to EPS or the PE ratio. All else held constant, the company with...

The net profit reported by a company often carries noises that are driven by certain accounting and funding choices, which makes it very...

Volatility is one of the important risk measures used in finance. In the context of financial instruments, historical volatility is...

Although, in theory, probabilistic modelling techniques such as Monte Carlo method provides better insights over deterministic models,...

Lambda function lets users create custom made function right inside MS Excel. This is especially very useful while working with array...

Most models go wrong later in their life due to poor update and maintenance practices. Dynamic array models almost eliminate the need for...

In this blog, we argue that distinguishing between an M&A model and LBO model is patently wrong, as LBO is also essentially an...

Machine learning models are essentially a subset of mathematical models in which computer algorithm determines the relationship between...

Financial models built in spreadsheet with focus on transparency (white-box models) often lack scalability and creates significant...

A financial model is a mathematical representation of a financial phenomenon such as a business performance or pay off of a contract that...