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Financial Modelling for Budgeting and Forecasting in Excel

Date: Thursday, 14 December 2017 - 9:00am - Friday, 15 December 2017 - 5:00pm

Location: Jakarta

Duration: 2 Days


This course covers the practical usage of Excel Modelling in a budgeting and forecasting context.  It is designed for users who use Excel regularly, and are comfortable with commonly used Excel tools and techniques. Whilst a brief overview of tools used in this course is provided, it is assumed that delegates are confident Excel users.  This course builds on students' advanced knowledge of Excel tools and functions and incorporates these into complex and dynamic financial models.

Software used

Each delegate needs their own laptop or workstation with their preferred version of Excel installed.   The course is demonstrated using Microsoft Excel 2016, but students can use Excel 2007, 2010 or 2013 if they prefer. 

Course Materials

At the workshop, each participant receives a revised edition of 'Using Excel for Business Analysis' by your course presenter, Danielle Stein Fairhurst. Participants are also provided with over 50 Excel templates and examples with step-by-step instructions for case studies.

Course Format

This course is delivered in two parts; the first section covers the theory of budgeting and forecasting within organisations.  Students are encouraged to share their own experiences with the class.  In the second section, students will build their own budget and forecasting models to bring a practical application to the skills they have learned.   The model will include a budget, rolling forecast, variance report as well as scenarios and sensitivity testing.

This workshop is being hosted by a third party training provider.  Contact us for more information on attending this event in Jakarta.  To run a course like this at your organisation, contact us for quote.

Course Content

Day One: Budgeting and Forecasting Theory

Cost Management Concepts
Overview of accounting theory critical for the budget manager

  • Financial Accounting vs. Management Accounting
  • General ledger accounting for budgeting
  • Budgeting for marginal, opportunity and sunk costs

Budgets and Strategic Planning
How budgeting fits into your organisation’s strategic planning process

  • Linking Budgets to business objectives
  • Budgeting to achieve organisational objectives
  • How to turn measurement into management
  • Budgeting vs forecasting

Using Budgets as Performance Management
What gets measured gets done!

  • The impact of budgets on organisational performance
  • Successfully integrating forecasting and budgeting as essential tools for measuring performance
  • Translating the organisation’s values into measures and targets

Financial Statements
Consolidating the detailed budget into financial statements

  • Linking financial statements to drivers
  • Measures such as NPAT, EBIT and EBITDA
  • Budgeting cashflow
  • Capital Expenditure and depreciation budgeting

Using budget reporting for management and decision making

  • Using reporting to promote accountability
  • Variance analysis
  • Non-financial measures such as the balanced score-card
  • Budgeting and forecasting as a planning and management tool
  • Assessment and selection of appropriate systems

Budgeting Techniques
Discussion and overview of different budgeting systems and methods

  • Historical-based versus Zero-based budgeting
  • Top down vs bottom up
  • Activity Based Budgeting
  • Flexible budgets
  • Rolling forecasts
  • Differences between a static, flexible and rolling budget
  • Budgeting for capital expenditure vs. operational expenditure
  • Contingency planning

Limitations of budgets
What’s wrong with how we do budgets?

  • Critique of the traditional budget process
  • Estimations and rigidity
  • Staff perceptions and changing environments
  • Dysfunctional budgeting behaviour

Budgeting “Soft” Skills
Non-financial skills required for the budget manager

  • Achieving buy-in from stakeholders
  • Involving non-financial management of the organisation
  • Techniques in getting your budget approved
  • Managing conflicting priorities and demands
  • Setting timelines

Day Two: Budget and Forecast Modelling

Developing the Budget Model
Turn your budget theory into a practical and dynamic financial model

  • Types of budget model (short and long-term models)
  • Fixed vs. variable costs
  • Drivers in budget modeling; e.g. industry forecasts, growth rates, market share
  • Key factors and considerations for a reliable forecasting
  • Modelling for “Stepped” costs
  • Using goal-seek to perform break even analysis

Practical exercise: create a model in Excel which will calculate volume-dependent “step” costs.  Calculate break-even point using goal-seek.

Determination of business trends, cycles & seasonality
Utilisation of trends, cycles of the current market situation in the forecasting process

  • Understanding the inter-relationship among trends, cycles and seasonality
  • Recognising patterns in financial data
  • Using Regression Analysis as a predictor and estimator
  • Identifying and calculating business trends, business cycles and seasonality in historical data
  • Using the seasonality factor in interpreting the forecast variances

Practical exercise:  Forecast a sales cycle in Excel based on historical data by calculating the seasonality index and adjusting the forecast accordingly.

Scenarios, Sensitivities and Stress-testing
How sensitive is your business to changes in budget drivers?

  • The difference between scenarios and sensitivities
  • Multi-currency budgeting
  • Stress-testing and validating your budget model integrity
  • Performing a “what-if” and sensitivity analysis
  • Optimise results and achieve maximum efficiency within constraints
  • Creating and displaying budget scenarios

This workshop is being hosted by a third party training provider.  Contact us for more information on attending this event in Jakarta.  To run a course like this at your organisation, contact us for quote.