Seeking a career in finance? Here is why you should learn financial modelling and valuation!
Building a successful career in the finance domain requires relevant skills for understanding, organising, analysing, and extracting insights, from a company’s financial data. There has been a significant increase in the demand for financial modelling and valuation skills, as managing data and making data-based decisions has become crucial for new-age organisations.
Financial modelling specialists summarise an organisation’s expenditure and income in a spreadsheet, to understand how future decisions or events would impact the company financially. Some commonly used financial models include leveraged buyout (LBO) model, discounted cash flow model, sum-of-the-parts model, and merger & acquisition (M&A) model, required for analysing and taking finance-related decisions in different scenarios. The financial models or modelling tools are also used to estimate the company’s valuation and compare it with competitors in the industry.
Here are a few lucrative data-driven job roles that would convince a finance enthusiast to build her career in the field of financial modelling and valuation —
Required knowledge and skills for financial modelling and valuation
Knowledge of Excel and accounting and finance is the prerequisite for securing a successful career in financial modelling and valuation. You must know how to use basic tools, financial modelling tools, and formatting and conditions in excel. For building an understanding of investment decision techniques, you must know about time value of money, future value and compounding, present value, net present value (NPV) and discount rate, internal rate of return (IRR), and payback period. Knowledge of how to apply the decision techniques and analyse financial statements is also essential. Mastery in essential valuation concepts like absolute valuation (DCF Method) and relative valuation would enhance your chances of landing a lucrative position across any industry of your choice.
Courtesy: Internshala Trainings (training.internshala.com) - e-learning platform to learn new-age skills from Internshala
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