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FIN-105E

FINANCIAL MODELING IN TELECOMMUNICATIONS

Description

A 5-day Training Program to provide participants with the fundamental concepts, principles, tools and techniques of financial modeling as it applies to the telecommunications sector.

Objectives

• Provide an understanding of the fundamental concepts of financial analysis and financial models
• Through examples and exercises, introduce the main features and functionalities of Microsoft Excel which are used in financial modeling
• Present the process of combining functions and functionalities in exercises to take data analyses to a higher level
• Present financial analysis ‘best practices’ and their impact on financial modeling
• Show how to integrate telecommunications engineering concepts into financial models
• Present cases and examples of realistic, large scale financial models pertaining to telecommunications

Topics

• Corporate planning process
• Strategic plan
• Business plan and long term financial models
• Budget and treasury management

• Financial analysis concepts
• Corporate accounting: annual and quarterly reports
• Core accounting statements: income statement, balance sheet and cash flow statement
• Role of accounting in finance

• Financial models
• Types of financial models
• Parts of a model
• Flow of a model
• How core financial statements are related
• Breaking down the income statement: operating vs. non-operating items
• Calculating Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
• Importance of working capital elements
• Integration of the capital structure
• Elements of business valuation
• Traps in building the project discounted cash flow calculation

• Examples and exercises of Microsoft Excel menus
• Exercises with the menu toolbar functionalities, featuring:
• File menu: configuring the model layout for presentation purposes before printing
• Edit menu: manipulating the data with the paste-special functionality
• View menu: using the formula bar to switch between absolute and relative formulas
• Insert menu: naming cells holding constant values or key assumptions that can be called from anywhere in the model
• Format menu: creating smart cells that change color depending on the results in the cells
• Tools menu: running several scenarios of a model by changing key variables and viewing the results of one scenario against those of other scenarios
• Data menu: running sensitivity analyses with data tables
• Windows menu: splitting the window pane to view different parts of the model simultaneously
• Presentation of other toolbars and Microsoft Excel shortcuts

• Examples and exercises of Microsoft Excel functions
• Use of functions on a stand-alone basis
• Integration of several functions with one another to create shrewd algorithms that handle complex calculations while diminishing computation steps, featuring:
• Financial functions: evaluating a project with uneven cash flow periods
• Date & time functions: exploiting date functions for time periods
• Math functions: selecting data and summing them up all at once
• Statistical functions: filtering and ranking data
• Lookup & reference functions: drilling through data and building smart formulas to automate sophisticated calculations
• Text functions: filtering text data and combining text with numerical data
• Logical functions: building algorithms to integrate multiple computations steps in one formula
• Information functions: filtering data and increasing the power of the lookup and logical functions
• Presentation of additional functions by category (analysis toolpak)

• Examples and exercises of Microsoft Excel tools & applications
• Combination of functions and functionalities in exercises to take data analyses to a higher level, featuring:
• Charting: building charts and adding all the features to illustrate data patterns in the model
• Drawing: designing flowcharts of the model and other conceptual drawings such as organizational charts (without using other software)
• Sensitivity: running sensitivity and what-if analyses on the model key variables and leveraging the power of data tables to perform loop calculations without using Virtual Basic for Applications (VBA)
• Pivot: drilling through standardized data tables (such as flat files) and using the industrial strength of the data table functions to aggregate large quantities of information
• Advanced statistics: extending the scope of the statistical functions and performing common statistical procedures
• Regression: running simple regressions and time-series analyses
• Arrays (matrices): performing matrix algebra and using the array formulas on a variance-covariance matrix
• Solver: performing what-if analyses and solving optimization problems with targets and constraints
• VBA: creating customized functions and integrating several functions in one unique function
• Algebra and solving circular references: translating into basic mathematics algebra and turning results into drivers to uncover the needed assumptions to achieve target results

• Best practices
• Presentation of financial analysis best practices and their impact on financial modeling
• Explanation of the use and importance of modeling guidelines to curb operational risk in financial modeling
• Review of the impact of improper modeling practices
• Effect of integrating best practices to a model: “before & after” cases

• Application of best practices
• Application of best practices on unformatted models through exercises
• Assimilation of the best practices by formatting examples

• Reviewing a generic case
• Review of the skills acquired in the previous modules
• Integration of these skills by working out a case
• Transformation of an incomplete financial model into a final model ready to be presented
• 15-step review of all the concepts acquired during the Training Program

• Integration of telecommunications engineering concepts
• Understanding the typical cost functions (volume discount, step functions)
• Elements of traffic engineering
• Voice versus data traffic
• Converting units
• Topological considerations
• How to cope with the evolution of the network topology over time?
• How to optimize node placement?
• Handling cost erosion over time

• Large scale examples of financial models pertaining to telecommunications
• Review of some realistic models for large scale network deployments

Target Audience

• Telecommunications managers and personnel responsible for financial analysis, financial modeling and business valuation
• Managers looking to complement their skill-set by gaining a good understanding of financial modeling

Methodology

Our Training Programs combine expert presentations, workshops, case studies and discussions on real-life situations faced by participants. Complete training material is provided to all participants for future reference and follow-up action plans.

Location

Our Training Programs are held at regular intervals in selected cities around the world. Upon request, our expert trainers can lead Training Programs at the location of your choice. If interested, please contact us at training@neotelis.com.

Expertise

Neotelis provides consulting and training services to telecommunications organizations worldwide. Its team of experts has trained thousands of executives and managers working for operators, regulators, policy-makers and governments in over 100 countries around the world.