Top 10 Best Financial Modeling Books

financial modeling

Top Best Financial Modeling Books – Books are the windows of opportunities. Through books people who have already walked the path would guide you to make better decisions and would help you acquire new skills. And if all you need to do is to follow along, would you think, you need any special talent to do that? Nope. All you need to pick these books up and read from cover to cover. And practice on your own as much as you can. You know that only reading won’t help until you make the effort to understand and apply the same. Once you do that, within few months, you would be able to do financial modeling as if it is nothing.

If you want to learn Financial Modeling professionally, you can also opt for this Financial Modeling Course (Bundle of 10 courses with 50+ hours of HD video tutorials and Lifetime Access)

We want you to succeed like that. Have a look at the best financial modeling books below and become the master of financial modeling.

#1 – Financial Modeling (MIT Press)

by Simon Benninga

If you are new in the field, you need a text book to learn the fundamentals. Why not pick up this book? This book is considered as the best book in financial modeling.

Book Review

According to the readers of the book, this book is the only book you need to read cover to cover if you want to learn financial modeling. This is particularly useful for people who don’t have any knowledge in financial modeling and want to learn financial modeling as a demand of their profession. But still other than beginners, even people who have knowledge in VBA, Advanced Excels and complex financial modeling should read this book as a refresher.

Best takeaways from this Best Book on Financial Modeling

  • Once you pick up this book, you don’t need to read any other book; because in the latest edition, this book has included separate chapters for complex Monte Carlo methods and Nielson-Siegel model.
  • You will also learn VBA from basic level and you will learn the advanced level too. The idea is to learn the concepts first if you are a beginner and then learn the technical aspects of it.
  • The new edition of the book comes up with an access code which will help you download excel worksheets and the solutions to the end-of-the-chapter exercises.
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#2 – Financial Analysis and Modeling Using Excel and VBA

by Chandan Sengupta

This book is a comprehensive financial modeling book. If you want to learn financial modeling in depth, this is the book you should pick up.

Book Review

Many readers mentioned that this book is one of the most comprehensive books for novice students. It explains every concept in detail. It is more than 700 pages and within the pages, you will learn excel and VBA as well. But don’t expect too much from this book if you’re an advanced professional. It’s written for beginners and would act as a great reference book for novice learners of financial modeling.

Best takeaways from this Top Financial Modeling Book

  • You should buy this book because of its comprehensiveness. Very few books on financial modeling have in depth analyses of concepts.
  • This book has an outstanding section on forecasting. You can buy the book even for this section alone.
  • This book has not scratched the concepts. It’s very detailed and you will learn the basics of excel and VBA as well.
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#3 – Financial Modelling in Practice:

A Concise Guide for Intermediate and Advanced Level

by Michael Rees

As the title suggests, this book is not for financial modeling beginners. If you have some fundamental knowledge in financial modeling, you can pick this book up.

Book Review

This book is well balanced. You won’t find a book on financial modeling which has included both concepts and applications in the proper ratio. Moreover, the examples used in the book are invaluable for the professionals in the field. This financial modeling book will take you to the next level. If you already have a fundamental training in financial modeling, then you should pick this book up to go beyond your comfort zone. If you’re a beginner, it’s advised not to read this book before reading something more basic and fundamental.

Best takeaways from this Best Financial Modeling Book

  • This book is free of fluff. Thus people who are in the financial domain would be able to extract a great amount of stuff out of it. If you read and apply everything you learn from this book, you will see a fundamental difference in the way you approach financial modeling.
  • You will also get a CD-ROM with the book which will enable you to get access to excel models and more practical problems.
  • You will learn excel and statistical functions so very well after reading through this book.
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#4 – Financial Modeling and Valuation:

A Practical Guide to Investment Banking and Private Equity

by Paul Pignataro

If you have ever faced any difficulty in financial modeling and valuation, pick this book up to learn.

Book Review

This beginner’s book on financial Modeling is written in such a way that even dummies in finance can understand. So it’s not exactly aimed at advanced or intermediate students. If you are a beginner, this is the perfect place to start. Moreover, you will also learn excel while learning the concepts. However, you may feel bored if you have some knowledge in the financial modeling, because this book doesn’t skip any step. So if you want to learn financial modeling and valuation and doesn’t want to expend a lot, this is the perfect go-to-guide for you.

Best takeaways from this Top Book on Financial Modeling

  • You will learn every conceivable financial model in this book. You will learn Balance Sheet, Income Statement, Cash Flow Statement, Balance Sheet Balancing, Depreciation Schedule, Working Capital Schedule and many more.
  • You will also learn valuation technique in detail. You will learn Discounted Cash Flow Analysis, Precedent Transactions Analysis and many more techniques.
  • You will also get to relate to many case studies given in the book as you learn financial modeling and valuation.
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#5 – Financial Modeling for Business Owners and Entrepreneurs:

Developing Excel Models to Raise Capital, Increase Cash Flow, Improve Operations, Plan Projects, and Make Decisions

by Tom Y. Sawyer

This book is as practical as it can be; because it will directly help entrepreneurs to do most difficult things in business.

Book Review

Very few books have come from the place of linking business thinking with financial modeling. Financial modeling is a technical skill for sure, but for entrepreneurs who are new in the field don’t know anything about technicality of business. This book has bridged the gap for new entrepreneurs. You will not only learn to develop excel models to raise capital, increase your profits and revenues, you will also learn valuable project management skills from this book.

Best takeaways from this Best Financial Modeling Book

  • For an entrepreneur analysing ROI may be a gigantic task. But if he picks up this book, it may not seem as daunting as it usually seems. Moreover, as an entrepreneur you will also be able to plan projects and new initiatives backed up by financial models.
  • You will not only learn financial modeling, you will also learn business situations and strategic moves you need to make while launching new products or start-ups.
  • It will help you avoid traps and obstacles of the business by being aware of the loopholes and by being able to create operational and functional models for your business.
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#6 – Financial Modeling:

A Backward Stochastic Differential Equations Perspective (Springer Finance)

by Stephane Crepey

This is a book that is written for intermediate and advanced students of financial modeling and you need additional knowledge in mathematical frameworks.

Book Review

This book is a core book on financial modeling. Until you learn the basics, it’s better not to pick up this book. Backward Stochastic Differential Equations (BSDEs) provide information on how you can solve pricing and risk management issues. You need to understand mathematics and statistics to be able to appreciate the value of the book.

Best takeaways from this Top Financial Modeling Book

  • How would you solve nonlinear pricing problems? You need CVA computations. How to learn? Pick up this book.
  • BSDEs are more popular to academicians than to practitioners. The author wrote this book so that the practitioners can appreciate the value of BSDEs and can apply the perspective in their non-linear pricing and risk management problems of financial derivatives.
  • This book is written particularly for graduate course which includes both computational finance and financial modeling.
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#7 – Building Financial Models (McGraw-Hill Finance & Investing)

by John Tjia

Financial modeling is one of the most valued skills in the corporate world today. The main emphasis of this book is one helping you build the skill of financial modeling.

Book Review

The chief issue of any instructional book is that the author seems to have less professional experience in the skill he guides the readers to learn. But in this case, it’s not at all the case as the author has years of experience in the relevant domain and readers from all walks of life have recommended this book especially to those who have little or no financial modeling experience. You will learn the skill you need to learn and this book would be your guide all along the way. It’s crisp, instructional and full of fundamental concepts for you to master the skill of financial modeling.

Best takeaways from this Best Financial Modeling Book

  • In this book, you will not only learn about financial modeling, rather you will learn the basics of financial modeling – the accounting and finance concepts in detail. So even if you are new to financial modeling, you won’t have any issue with learning from the scratch.
  • You will also learn how to create models using excel so that you can directly put your learning into work and see for yourself how much you have learned.
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#8 – The Oxford Guide to Financial Modeling:

Applications for Capital Markets, Corporate Finance, Risk Management and Financial Institutions

by Thomas S. Y. Ho & Sang Bin Lee

This book has drawn upon a striking balance between theory and practice of financial modeling. Let’s have a look at the review and the best takeaways.

Book Review

If you ever think of a book which will first teach you how to develop financial models and then it will show you in which cases you need to apply these models, this is it. This is the book you should pick up to learn financial modeling in a comprehensive manner. This book will not only cover the models, it will also add how these models are relevant in present business cases.

Best takeaways from this Best Book on Financial Modeling

  • This book presents the financial models as well as the contexts of each model and you would also learn to use them whenever it would be required.
  • The width of the book in terms of curriculum is vast. It has covered financial modeling in entirety – from option pricing in the securities market to firm valuation in corporate finance.
  • You would also get assistance of website to understand the financial models better.
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#9 The Mathematics of Financial Modeling and Investment Management

by Sergio M. Focardi & Frank J. Fabozzi

People who are into financial modeling need to know the maths behind the financial models if they wish to advance their career in financial modeling. This book will be the answer to all your mathematical questions behind financial modeling.

Book Review

This book is strictly not for beginners. The reason behind this is it’s written for people who already have some experience and fundamental knowledge in financial modeling and especially in using mathematical framework. This book can be a great refresher for someone who wants to go back to the quants section of finance and want to revise the concepts. However, this book will hold your hands and walk you through every possible concept you need to learn in quantitative finance.

Best takeaways from this Best Book on Financial Modeling

  • You will not only learn the concepts of financial modeling and quantitative finance, you will also learn the practical examples which will crystalize your learning.
  • You will learn arbitrage pricing, derivative pricing, credit risk modeling, interest rate modeling and much more.
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#10 – The Handbook of Financial Modeling:

A Practical Approach to Creating and Implementing Valuation Projection Models

by Jack Avon

This book will help you think from both perspectives – from the perspective of a financial modeller and also from the point of view of the end users.

Book Review

The book is a gem. If it’s not overemphasis, the book can be called the best book on financial modeling available as of now. The author has authority over the subject and once you begin to read this book, you will not only learn financial modeling better; rather you will also begin to approach your entire finance career in different way. This book is of 504 pages and covers almost everything you need to learn and to apply in financial modeling.

Best takeaways from this Book

  • You will learn the logic behind thinking about end users first while building the financial models.
  • You will also learn the fundamental accounting and finance concepts you need to learn to create financial models.
  • You will get a map of planning, designing and building a fully functional financial model.
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