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RICS Investment and Finance Pathway > Financial modelling Level One > Flashcards

Financial modelling Level One Flashcards

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1
Q

Tell me about the main financial modelling software packages you are aware of.

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2
Q

What is a financial model?

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3
Q

What are the pros and cons of a particular piece of software you have used?

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4
Q

Why may software be beneficial over Excel for modelling?

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5
Q

Why is it important to clearly identify inputs/outputs/unit types?

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6
Q

Why is locking cells important?

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7
Q

What is sensitivity analysis and why is it important?

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8
Q

What issues can arise with modelling spreadsheets/packages?

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9
Q

What are the limitations of modelling software/Excel?

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10
Q

How can you overcome these?

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11
Q

How do you ensure that formulas and mechanics are working correctly?

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12
Q

How do you ensure that the figures are not a false pretence?

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13
Q

How do you check the reliability and accuracy of data?

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14
Q

Why are explicit valuation approaches popular?

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15
Q

Did the economic crisis impact the type of financial modelling carried out by investors and developers?

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16
Q

What is discounting?

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17
Q

What is the time value of money and why is it important?

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18
Q

What is compounding?

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19
Q

Tell me about an assumption you might make in a financial model.

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20
Q

Are you aware of any RICS guidance relating to financial modelling?

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21
Q

What accounting concepts have you come across in relation to financial modelling?

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22
Q

What is CAPEX?

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23
Q

Tell me about the key elements of RICS DCF for Commercial Property Investments.

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24
Q

How can a DCF be used to assess worth/investment value?

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25
Q

Tell me about how you would arrive at a discount rate in a model.

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26
Q

What factors affect the discount rate?

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27
Q

How do you avoid double counting risk in both the cash flow and discount rate?

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28
Q

What does the exit value reflect?

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29
Q

How do you establish exit value?

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30
Q

What information do you need to prepare a model/DCF?

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31
Q

What tenure/physical attribute/lease/rental value/costs of ownership/holding costs/refurbishment/redevelopment/finance/gearing/taxation information would you need and why?

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32
Q

How would you factor these into your model?

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33
Q

When would you use current / forecast data?

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34
Q

What are the issues around forecasted data?

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35
Q

What period would you use for a cashflow?

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36
Q

What is the impact of a shorter time horizon on value?

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37
Q

Would you factor tax into a DCF?

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38
Q

How would this differ from a Market Value assessment?

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39
Q

How would you assess rental growth and reflect this in the DCF?

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40
Q

What is IRR?

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41
Q

How do you calculate IRR?

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42
Q

What is TWRR?

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43
Q

How do you reflect cash flow frequency in a model?

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44
Q

What is a property risk premium?

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45
Q

How do you assess the risk free rate?

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46
Q

What are examples of market / specific risks?

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47
Q

What are other ways of determining TRR?

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48
Q

What is the CAPM?

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49
Q

Tell me about your understanding of RICS Financial Viability in Planning and how this relates to your financial modelling work.

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50
Q

What inputs would you include within this type of model?

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RICS Investment and Finance Pathway (54 decks)

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