What is FCFF (Free Cash Flow to Firm)? FCFF, or Free Cash Flow to Firm, is the cash flow available to all funding providers (debt holders, preferred stockholders, common stockholders, convertible bond investors, etc.). It is also known as unlevered free cash flow and represents the surplus cash flow available to a business if it were debt-free. A…
CFI Financial Modeling Time-Lapse (With Music!) In celebration of the 2018 CFI Financial Modeling Competition and World Championships, we released this financial modeling time-lapse video of a financial model being built in under 2 minutes! We hope you enjoy watching this Excel model being built, set to the music of Les Toreadors. You can register…
What is Monte Carlo Simulation? Monte Carlo Simulation is a statistical method applied in financial modeling where the probability of different outcomes in a problem cannot be simply solved due to the interference of a random variable. The simulation relies on the repetition of random samples to achieve numerical results. It can be used to…
Forecasting Cash Flow in a Financial Model This article on forecasting cash flow is the last part of the four-step financial forecasting model in Excel. Having completed our income statement and balance sheet forecasts, we can now turn to the cash flow statement to complete the four-step forecast modeling framework. By the end of this…
Forecasting Finance: Equity, Debt and Interest This article on forecasting finance is part three of the four-step financial forecasting model in Excel and focuses on how to model equity, debt, and interest. Having completed revenue forecasts down to EBIT for the income statement and operating assets forecast for the balance sheet, we can now move…
A financial model is a structured spreadsheet that forecasts a business’s financial performance using assumptions about revenue, costs, and other key drivers. There are many different types of financial models. In this guide, we will outline the top ten most common models used in corporate finance by financial modeling professionals. Here is a list of the…
What Makes These Financial Modeling Courses So Popular? If you want to learn how to build Excel-based financial models like a financial analyst, these are some of the best financial modeling courses to start with. The courses below are among the most popular in CFI’s Financial Modeling & Valuation Analyst (FMVA®) Certification, designed to teach you…
Monthly Cash Flow Forecast Model With a rolling monthly cash flow forecast, the number of periods in the forecast remains constant (e.g., 12 months, 18 months, etc.). The forecast is rolled forward every time there is a month of historical data to input. Rolling forecasts work best when key cash flow drivers are modeled explicitly…
What is CapEx? CapEx (short for capital expenditures) is the money invested by a company in acquiring, maintaining, or improving fixed assets such as property, buildings, factories, equipment, and technology. CapEx is included in the cash flow statement section of a company’s three financial statements, but it can also be derived from the income statement…
What is LBO Modeling? LBO Modeling is used to value a leveraged buyout (LBO) transaction where a target company is acquired using a significant amount of debt. The use of high leverage increases the potential returns on investors’ equity investments in the long run. An LBO model is usually built in Excel to help investors…
