Financial modelling Level One Flashcards
Tell me about the main financial modelling software packages you are aware of.
What is a financial model?
What are the pros and cons of a particular piece of software you have used?
Why may software be beneficial over Excel for modelling?
Why is it important to clearly identify inputs/outputs/unit types?
Why is locking cells important?
What is sensitivity analysis and why is it important?
What issues can arise with modelling spreadsheets/packages?
What are the limitations of modelling software/Excel?
How can you overcome these?
How do you ensure that formulas and mechanics are working correctly?
How do you ensure that the figures are not a false pretence?
How do you check the reliability and accuracy of data?
Why are explicit valuation approaches popular?
Did the economic crisis impact the type of financial modelling carried out by investors and developers?
What is discounting?
What is the time value of money and why is it important?
What is compounding?
Tell me about an assumption you might make in a financial model.
Are you aware of any RICS guidance relating to financial modelling?
What accounting concepts have you come across in relation to financial modelling?
What is CAPEX?
Tell me about the key elements of RICS DCF for Commercial Property Investments.
How can a DCF be used to assess worth/investment value?
Tell me about how you would arrive at a discount rate in a model.
What factors affect the discount rate?
How do you avoid double counting risk in both the cash flow and discount rate?
What does the exit value reflect?
How do you establish exit value?
What information do you need to prepare a model/DCF?
What tenure/physical attribute/lease/rental value/costs of ownership/holding costs/refurbishment/redevelopment/finance/gearing/taxation information would you need and why?
How would you factor these into your model?
When would you use current / forecast data?
What are the issues around forecasted data?
What period would you use for a cashflow?
What is the impact of a shorter time horizon on value?
Would you factor tax into a DCF?
How would this differ from a Market Value assessment?
How would you assess rental growth and reflect this in the DCF?
What is IRR?
How do you calculate IRR?
What is TWRR?
How do you reflect cash flow frequency in a model?
What is a property risk premium?
How do you assess the risk free rate?
What are examples of market / specific risks?
What are other ways of determining TRR?
What is the CAPM?
Tell me about your understanding of RICS Financial Viability in Planning and how this relates to your financial modelling work.
What inputs would you include within this type of model?
