Financial Modelling Services

 

You will notice that financial modelling is a common feature in many corporate finance and capital raising transactions in Singapore and around the world. The financial model functions as the central repository for much of the work done on a deal: due diligence, capital raising, valuation, and commercial negotiations – these all invariably impact the financial modelling in one way or another.

The Role of Financial Modelling Specialists in the Deal

While specialists like legal, tax and accounting specialists are regarded as indispensable to deal teams, we recommend staffing your commercially critical deals with skillful financial modellers who are able to properly prepare, present and stress-test the assumptions and the wiring of the financial model. The financial modeller’s objective is to use the financial model as a communication tool in his interaction with his client and deal counter-parties to quickly bridge the commercial gap between both sides.

Good financial modelling is a skill that is acquired and refined over an extended period of time and ultimately boils down to achieving high standards of accuracy while demonstrating keen attention to detail and conscientiousness in our modelling efforts. It is no coincidence that many investment banking directors were themselves skilled and accomplished modellers.

Financial Modelling Components

The basic building blocks of a good financial model would include:

  • Charting outputs
  • Sources and uses of funds
  • Static and periodic assumptions
  • Operational assumptions
  • Capital and operating expenditure
  • Accounting and tax depreciation
  • Summary financial statements
  • Senior and junior debt principal, interest, fees and debt-sizing covenants
  • Equity raising assumptions
  • Discount rate computation
  • Multiples derived from listed company and precedent transaction comparable
  • Returns analysis (NPV, IRR, discounted payback)
  • Transaction fees