# Excel Modeling

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Financial Modeling

- Excel Modeling
- Financial Functions in Excel
- Sensitivity Analysis in Excel
- Time Value of Money
- Future Value Formula
- Present Value Factor
- NPV Formula
- Annuity vs Perpetuity
- Internal Rate of Return (IRR)
- NPV vs XNPV
- NPV vs IRR
- NPV Formula
- IRR vs ROI
- Break Even Point
- Payback Period & Discounted Payback Period
- Payback period Formula
- Discounted Payback Period Formula
- Profitability Index
- Cash Burn Rate
- Simple Interest
- Effective Interest Rate
- Loan Amortization Schedule
- Rule of 72
- Geometric Mean Return
- Real Rate of Return Formula
- Continuous compounding Formula
- Weighted average Formula
- Holding Period Return Formula
- Cost Benefit Analysis
- Mortgage APR vs Interest Rate

## Excel Modeling

Excel Modeling is a spreadsheet analysis that allows you to do analysis and projections using various inputs and assumption. Here we use excel modeling to find a solution to real-life problems of Corporate Finance.

In Excel Modeling, we cover the following -

- Understanding Time Value of Money Concept
- What is Net Present Value
- What is the Internal Rate of Return
- What is the difference between NPV and IRR
- How to find the present value and future value in excel
- Finding Annuity and Perpetuity in Excel
- Finding the Breakeven Point in Excel
- Calculating Profitability Index in Excel
- Calculating Cash Burn Rate
- Performing Cost Benefit Analysis

### Financial Functions in Excel Modeling

Here is the list of Top 15 financial functions in excel that are most frequently used in practical situations

### Sensitivity Analysis in Excel Modeling

Sensitivity analysis in excel modeling helps us study the uncertainty in the output of the model with the changes in the input variables.

### Time Value of Money

Time Value of Money is due to the potential earning capacity of the given amount of money.

### Future Value Formula

FV Formula is a financial terminology is used to find out the value of cash flow at a futuristic date as compared to original receipt.

### Present Value Factor

PV factor deals with the idea of time value for money by trying to estimate the current value per dollar to be received at a future date.

### Perpetuity Formula

Perpetuity means the business or the individual would receive a constant flow of equal amount of cash with no end.

### Annuity vs Perpetuity

Annuity vs Perpetuity are very significant parts of Time Value of Money calculation.

### Internal Rate of Return (IRR)

IRR is a metric employed in capital budgeting which is used to measure the extent of profitability of potential investments.

### NPV vs XNPV

NPV is defined as the difference between the existing value of net cash arrivals and the existing value of total cash expenditures, whereas XNPV is primarily determines the NPV for a range of cash payments which are not essentially periodic.

### NPV vs IRR

NPV is calculated as PV of cash inflow less PV of cash outflow, Whereas IRR is Known as discount rate that make NPV of all cash inflows of a project equal to zero.

### IRR vs ROI

IRR is used to calculate the rate of return on an investment especially for the shorter duration of time, whereas ROI is used to calculate the performance of the investment over a certain period of time.

### Break Even Point

Break Even Point is analysis to reduce the complexities and to understand the profit making point of your product or job through these simple methods.

### Payback Period & Discounted Payback Period

Payback period of an investment is the length of the time period required for cumulative total net cash flows to total initial cash outlays.

### Payback period Formula

Payback period formula is used by the investors, generally how long it would take to recoup their initial investments.

### Discounted Payback Period Formula

Discounted payback period Formula is used to calculate how much time a project would get back its initial investment.

### Profitability Index

Profitability Index is the ratio of the present value of future cash flows of the project to the initial investments in the project.

### Cash Burn Rate

The rate at which the cash is being burnt by a company is called the cash burn rate.

### Simple Interest

Simple interest is the interest amount computed as a fixed percentage of the Principal amount.

### Effective Interest Rate

Effective interest rate is a true rate of interest earned. It is also called as market interest rate.

### Loan Amortization Schedule

Loan amortization schedule is referred to the paying back off a loan or debt amount in terms of installments spread over a particular period of time.

### Rule of 72

Rule of 72 is a formula that helps us to understand when we can double our investment.

### Geometric Mean Return

Geometric mean return formula is used for computation of Average rate per period on an investment compounded over multiple time periods.

### Real Rate of Return Formula

Real rate of return formula helps an investor is to find out what actually he gets in return for investing a specific sum of money in an investment.

### Continuous compounding Formula

The continuous compounding formula is to determine the interest earned which is repeatedly compounded for an infinite time period.

### Weighted average Formula

In the weighted average formula, the value is being multiplied by the right amount of weight and that is the beauty of wt average.

### Holding Period Return Formula

Holding period return is widely used for comparing returns from various investments held for different periods of time.

### Cost Benefit Analysis

Cost-Benefit analysis models are to ascertain the accuracy of any investment decision and provide a foundation for comparing it with similar proposals.

### Mortgage APR vs Interest Rate

Mortgage APR is the overall cost of the loan. whereas it is the applied interest rate on the loan.