How to Learn Financial Modeling

Financial modeling is the task of creating a mathematical model to represent a real-world financial situation. This model typically depicts how a financial asset or portfolio has been performing. Learning to create financial models is extremely useful because it relies on past financial performance data to help forecast future events, trends, or outcomes. The number of options for learning financial modeling might be overwhelming at first glance. There are books, video tutorials, classes, and more to choose from; it all depends on your learning style and personal preferences. 

Here, we’ll discuss the various methods of learning financial modeling so you can decide how you’d like to get started.

What is Financial Modeling?

Financial modeling is the process of evaluating a company’s past performance to predict the likelihood of various financial outcomes. Those who create financial models rely on financial forecasts to do so. The assumptions in a forecast are played out using the organization’s financial statements to predict how various statements may look in the future. Since these models are based on financial statements, they are typically generated monthly, quarterly, or yearly. It’s common for financial models to be constructed using manual data entry in an Excel spreadsheet. 

Financial modeling is a valuable tool for estimating how a business or a specific project will perform based on relevant factors, as well as risk assumptions and growth, then evaluating their impact. This process helps to present a concise understanding of the variables used to make financial forecasts. Those who create financial models either build them from scratch or work with existing models, making changes based on newer data that’s become available since its creation. Because financial situations are complex and can change quickly and rapidly, financial modeling helps to create a detailed understanding of the different components.

Read more about what financial modeling is and why you should learn it. 

What Can You Do with Financial Modeling?

Without well-executed financial modeling, any business operation would be analogous to a ship floating aimlessly in the sea with no navigation system. Although one could use gut instinct to steer the ship in the correct direction, there would be no guarantee that this course would be accurate. The more sound a financial model is, the less unnecessary risk a business will likely encounter. And the less likely it will be to drift aimlessly. 

Financial modeling has numerous applications across industries. Strong financial models are the backbone of many businesses and are a critical component to help them continue to grow and mitigate risk. Financial models provide a way to perform a detailed analysis of all possible financial outcomes of a business decision. These models seek to avoid loss as well as increase profits.

Financial modeling is a powerful tool for a range of financial analysis tasks. It can help an organization budget for the future and analyze the company’s performance against goals and targets. It also can be used for business valuation. Financial models allow individuals to compare one company’s performance against its competitors. It is often used to analyze financial statements, ratios, and capital structure, as well as to estimate financial metrics for new projects. Not only are these models imperative for solving problems, but they are used to make decisions about future outcomes. Some of the many decisions financial models can help with are estimating a company’s projected growth, organizing its budget, choosing investments, deciding between acquisition or merger, and deciding which projects should be prioritized.

In-Person Financial Modeling Training

In-person financial modeling training is an excellent option for learners who thrive in the traditional classroom environment. This engaging, interactive way to study allows participants to connect with an expert instructor sharing their insights and industry experience as they teach. It is also a great way to network with other learners, a benefit that is likely to extend beyond the classroom. In addition, classrooms are equipped with the most up-to-date software, which can eliminate the stress of loading apps and programs on your home device. In-person study does require commuting to and from campus for regularly scheduled class meetings, which is an essential consideration for those who need to balance learning financial modeling with other commitments. It may require taking off work to attend class and also may add additional costs to study for commuting and parking.

Many top educational providers currently offer in-person financial modeling classes. Noble Desktop’s Financial Modeling Bootcamp is an intensive three-day course. Participants receive expert instruction on finance and accounting fundamental concepts and also work to create a comprehensive discounted cash flow (DCF) model using Microsoft Excel. Wall Street Prep offers intermediate coursework. Their Financial Modeling Bootcamp is a three-day course in which participants receive instructions on using Excel to create financial models in different industries. For those who already have a background working with finance but want to take their skills to the next level, NYC Career Centers offers Advanced Excel for Financial Modeling. This one-day course covers advanced topics, such as techniques to improve workflow, database functions for finance, and sensitivity analysis. 

Live Online Financial Modeling Training

Live online financial modeling training is an excellent option for those who value real-time feedback but want the flexibility of studying remotely. This learning option provides students access to a live instructor, which means they can ask questions as they arise and receive guidance on their coursework. Live online study provides many of the same perks as in-person studies, such as small class sizes, industry-relevant instruction, and training with tools and software such as Microsoft Excel, which is essential for pursuing a career in financial modeling. 

One important consideration with live online study is that it still requires you to meet for regularly scheduled classes. This may be difficult for those working full-time or balancing studies with family commitments. It may also require taking off work to attend financial modeling courses. 

If live online financial modeling classes sound like a good option to you, there are a variety of excellent courses currently listed by top providers. Noble Desktop’s Financial Modeling Bootcamp spans 18 hours and provides participants with training in both finance and accounting. Participants in this hands-on course work with Excel to create a comprehensive discount cash flow (DCF) model. All participants receive training from an expert instructor and have the option of retaking the course for up to one year for free. Noble also offers Advanced Excel & Financial Modeling Intensive. This four-day program provides hands-on instruction on topics such as corporate finance, financial modeling, and financial accounting.

If you’re new to financial modeling, you may consider enrolling in NYC Career Centers Financial Analyst Training Program. This rigorous, five-day bootcamp prepares participants to become Financial Analysts. All students receive training in Excel fundamentals, such as working with charts, formulas, and formatting. Then, learners progress to more advanced Excel topics like LOOKUP functions and PivotTables. The third part of this course covers financial modeling concepts and corporate finance and accounting. For those seeking more advanced financial modeling training, NYIM offers a Financial Modeling Bootcamp. This 21-hour course teaches students about corporate finance, using advanced Excel for financial modeling, sensitivity analysis, and assumptions. All students receive a training manual and have the option of a free course retake. 

Free Online Courses & Tutorials

Not ready to dive into an entire course? If you’re looking for an overview of financial modeling, the good news is you can get started learning for free online. Noble Desktop offers a range of short YouTube clips to help learners start working with financial modeling. These videos are each only several minutes long and offer insights into topics like Foreign Exchange,

Interest Rates and the Fed, and Understanding Terminal Value. Noble also provides over 100 free financial modeling tutorials on its Training Resources & Articles page. Learners can browse topics like stock options, the stock exchange, and a liquid market, among others. 

In addition to the free resources provided by Noble, other top educators also offer free content devoted to financial modeling. Udemy’s Introduction to Financial Modeling is a free course that teaches participants how to build a simple integrated financial statement model. Coursera also has several free financial modeling classes and tutorials available. One option is their Business and Financial Modeling Specialization, a beginner-friendly course that takes approximately six months to complete. Those enrolled receive instruction on how to create quantitative models, how to use spreadsheets to map and predict data, and how to measure and manage risk. 

Read more about free financial modeling videos and online tutorials.

On-Demand Financial Modeling Classes

In addition to in-person and live online courses, another popular learning format for financial modeling is on-demand coursework. Top educational providers offer a variety of tutorials, videos, and instructional material for those interested in creating financial models. One of the main perks of self-paced financial modeling training is that it is generally a more affordable learning option than in-person and live online study. Some coursework is available as part of a subscription plan, and some are even offered for free. This allows students to get a feel for whether financial modeling is something they wish to study further before committing to a bootcamp or certificate program.

Because on-demand financial modeling materials are pre-recorded, students can watch them from any location at any time. This flexible study format helps those who need to balance coursework with other commitments, such as full-time employment or family engagements. Video lessons can be paused and rewound as often as needed, providing time for note-taking. However, one crucial consideration for self-paced financial modeling courses is that this field is generally considered difficult to learn, even for those with a background in finance. While asynchronous training materials are a great starting point to provide an overview of financial modeling and its various applications, learners don’t have access to an instructor, making it challenging to find answers to questions. Therefore, if you really want to dive into this field and learn more advanced skills like how to create discounted cash flow (DCF) models in Excel, you may need more structured training, such as live online coursework.

Which Learning Method is Right for Me?

Because so many resources are available to help beginners get started with financial modeling, you may not be certain which one is best for you. Everyone has different learning styles and preferences, so you can experiment with multiple tools to see which one feels right for you. One of the great things about directing your own learning is that you get to decide which combination of tools you prefer rather than sticking with the one a teacher chooses.

It’s also essential to consider your current schedule before selecting a learning method. If you need to balance your studies with responsibilities like a full-time job or family commitments, you may not be able to devote time to a structured course that requires you to attend at the same time every day. In this case, a self-paced class or video tutorials may be a better learning option since you can access them as your schedule permits. On the other hand, those with a more flexible schedule may prefer a structured course offered in-person or live online. 

Why Learn Financial Modeling?

Financial models have a range of uses for businesses of all sizes. They can provide an overview of how much a company is worth before it goes public and whether it’s eligible for a loan or financing options. Budget forecasting models are a valuable tool for those working in finance to understand how the organization is performing based on input from different departments. Financial models also help evaluate potential outcomes of management decisions before they are executed, which can help predict any changes to revenue that may be associated with raising the price of a product. In addition, investors sometimes work with financial models to establish how likely a company is to repay its debts.

Financial models are extremely valuable for organizations because they provide a simple way to calculate performance and anticipate outcomes. Not only can these models provide insights into the risks of implementing decisions, but they can also offer a financial statement that highlights how a company is operating financially. Although there are many different kinds of financial models, they all present a comprehensive overview of how an organization performed in the past, where it currently stands, and what can be expected in the months and years ahead.

Read more about why you should learn financial modeling. 

Level of Difficulty, Prerequisites, & Cost 

The field of finance can be complicated to understand, and financial modeling is considered one of the most challenging tasks in this field. Unlike other branches of finance that are specifically backward-looking or forward-looking, financial modeling has to look both ways simultaneously. In addition, there are many hidden assumptions the individual creating a model may not be aware of and, therefore, cannot be completely accurate.

Another contributing factor to how difficult it is to perform financial modeling is the level of detail that has to be built into the model. In an ideal scenario, a decision-maker would approach the information with as much granularity as possible, and the model would allow the user to drill down data from the aggregate level to the granular. It is up to the Financial Modeler to create this ability. This means they must fully understand how the numbers work on a micro and macro level. In addition, to be a successful Financial Modeler, it’s essential to be an expert working with technology to convey the process as a reusable model. For this reason, those who perform financial modeling must wear many hats and have expertise in various fields. 

Financial modeling is a process that involves a variety of skills and tools. Those who create financial models must have an understanding of finance and accounting and a grasp of how the economy works. In addition, one of the most widely used programs for financial modeling is Microsoft Excel. This spreadsheet application is available as part of a subscription that includes other Microsoft 365 apps, such as Word, PowerPoint, Teams, and OneDrive. Microsoft 365 Business Basic is available for $6/user/month. If you want to explore Excel before committing to buying a subscription, Microsoft offers a free Excel trial. 

Read more about how difficult it is to learn financial modeling.

Learn Financial Modeling with Hands-on Training at Noble Desktop

Noble Desktop offers several excellent learning options for those interested in studying financial modeling. Noble’s Financial Modeling Bootcamp covers the basics of accounting, finance, and corporate valuation. Those enrolled in this hands-on class work with Excel to create a discounted cash flow model. Students who don’t have a background in accounting or finance will be sent a short guide on terminology before class starts. All participants should have intermediate Excel proficiency as a prerequisite.

Noble’s Financial Analyst Training Program provides learners with instruction on pertinent corporate and financial concepts and how to create a full valuation model. This intensive program teaches core Excel skills, like how to work with PivotTables and shortcuts, as well as advanced Excel techniques, including cash flow projection tools and Goal Seek. All students will create an integrated, three-statement financial model based on current financial data.

Noble also offers financial modeling training courses in-person and live online. Those interested in learning more about how to use Excel for modeling can attend the Excel Bootcamp. In addition, FinTech courses such as Python for Data Science Bootcamp, Algorithmic Trading With Python, and FinTech Bootcamp are also available. Noble’s FinTech Bootcamp provides hands-on training from expert instructors in creating machine learning models, using programming languages like SQL and Python to analyze financial data, and working with various types of data, such as integers, strings, and floats. One-on-one mentoring and the option of a free course retake is included for all participants. 

Key Insights

• Financial modeling provides various stakeholders with a snapshot of how an organization has performed financially in the past and how it’s currently doing. This information helps forecast what’s likely to come in the future.
• Learning to create financial models is considered a complex skill, even for those who have a background in finance. Because it is simultaneously forward-looking and backward-looking and requires accounting for numerous underlying assumptions, it requires training and time to make financial models.
• When deciding which learning method is best for you, it’s important to consider whether you have the time to commit to regularly scheduled class meetings in the in-person or live online learning format or if you need the flexibility of asynchronous study options.
• You can receive comprehensive financial modeling training through an in-person or live online course with Noble Desktop.