During my first analytics position after graduate school, I asked a vice president at our company what the best way was to learn how his group modeled transactions. He answered with a grin: “Trial by fire.” From that point on, I could not have counted the gray hairs that I developed trying to figure out the most precise and efficient method of modeling a transaction. I am pleased to say those days are behind me and it no longer takes me hours to construct a powerful, accurate model. Nevertheless I am dismayed when I speak with finance peers who convey their desire to learn better financial modeling and are intimidated by the task or simply at a loss for where to begin. At those moments, I often think how I came to acquire the knowledge and skills necessary to model a diverse array of financial transactions.
I recalled hours spent poring over “how-to” books about Excel that were filled with hundreds of functions and formulas and left me feeling like I didn’t have any idea where to start modeling a transaction. The how-to books provide excellent basics of application operation yet they do not offer any context for applying those skills. My next thought was graduate school, where many courses such as Statistics, Economics, Corporate Finance, Capital Markets, and Decision Making utilize Excel for assignments and examinations. Unfortunately, for everyday application, the graduate school classes provide context, but typically on very specialized subjects that still left me with ...

Get Modeling Structured Finance Cash Flows with Microsoft® Excel®: A Step-by-Step Guide now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.