What is Vega Neutral? Vega neutral is a risk management strategy for options trading that aims to create a portfolio with a total vega of zero. Vega represents the sensitivity of the price of an option to the implied volatility of the underlying asset. It is one of “the Greeks” of options trading. Understanding the…
What is the Equal Credit Opportunity Act (ECOA)? The Equal Credit Opportunity Act (ECOA) is a law that was passed in October 1974 in the United States of America. The law makes it unlawful for creditors to discriminate against any applicant on the basis of race, religion, color, national origin, marital status, sex, or age….
What is the Vancouver Stock Exchange (VSE)? The Vancouver Stock Exchange (VSE) started operations out of Vancouver, British Columbia in 1907. The VSE continued to function as a standalone exchange until November 1999, when it was merged with other stock exchanges to create the Toronto Ventures Exchange (TSX-V). The VSE was home to mainly small-cap…
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…
