BA 4005

Financial Modelling

HBS > Professional Electives > Financial Modelling
Course ID
BA 4005
Level
Post Graduation
Semester
Semester III

OBJECTIVES:
• Making students to build financial models by including various fields of study viz
Financial Management and Derivatives.

UNIT I INTRODUCTION TO FINANCIAL MODELLING & BUILT IN FUNCTIONS USING SPREAD SHEETS
Introduction to Financial Modelling- Need for Financial Modelling- Steps for effective financial modelling Introduction to Time value of money & Lookup array functions :FV,PV,PMT,RATE,NPER, Vlookup, Hlookup ,if, countifetc – Time value of Money Models: EMI with Single & Two Interest rates –Loan amortisation modelling-Debenture redemption modelling

UNIT II BOND & EQUITY SHARE VALUATION MODELLING
Bond valuation – Yield to Maturity(YTM): Rate method Vs IRR method-Flexi Bond and Strip Bond YTM Modelling-Bond redemption modelling -Equity share valuation : Multiple growth rate valuation modelling with and without growth rates

UNIT III CORPORATE FINANCIAL MODELLING
Alt Man Z score Bankruptcy Modelling-Indifference point modelling – Financial Break even modelling  Corporate valuation modelling (Two stage growth)- Business Modelling for capital budgeting evaluation: Payback period ,NPV ,IRR and MIRR

UNIT IV PORTFOLIO MODELLING
Risk ,Beta and Annualised Return –Security Market Line Modelling –Portfolio risk calculation (Equal Proportions)-Portfolio risk optimisation (varying proportions)-Portfolio construction modelling

UNIT V DERIVATIVE MODELLING
Option pay off modelling: Long and Short Call & Put options -Option pricing modeling (B-S Model)- Optimal Hedge Contract modelling

TOTAL: 45 PERIODS

OUTCOMES:
• Develop fast, efficient and accurate excel skills
• Design and construct useful and robust financial modelling applications
• Recognize efficient financial budgeting and forecasting techniques
• Familiarise the students with the valuation modelling of securities
• The course establishes the platform for students to develop various portfolio models

REFERENCES :

1. Wayne L Winston,” Microsoft Excel 2016-Data Analysis and Business Modelling ”,PHI publications, (Microsoft Press),New Delhi,2017.
2. Chandan Sen Gupta, ”Financial analysis and Modelling –Using Excel and VBA” , Wiley Publishing House ,2014’
3. Craig W Holden,”Excel Modelling in Investments” Pearson Prentice Hall, Pearson Inc,New Jersey,5th Edition 2015
4. Ruzhbeh J Bodanwala , ”Financial management using excel spread sheet”,Taxman Allied services Pvt Ltd, New Delhi,3rd Edition 2015.