A list of the best books to learn financial modeling in Excel
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The best way to learn financial modeling is through practice. But how can you practice if you don’t know where to start? Many people start with video-based training (which we offer extensively), while others still prefer good old-fashioned books. For anyone who prefers to learn by reading and studying from books, this is the place for you. We’ve compiled in this guide what we believe are the eight most important and helpful financial modeling books.
1. Mastering Financial Modelling in Microsoft Excel – Alastair Day
Alastair Day’s book is an excellent one for anyone looking to master financial modeling in Excel. The author does a great job of making complex issues simple and easy to understand, which makes the book highly recommended.
The main topics covered in Day’s financial modeling book include:
Spreadsheet design, methodologies, and processes
Techniques for checking and improving existing models
How to avoid costly mistakes by testing each scenario
Add-ins such as @RISK and PrecisionTree for risk modeling
How VBA can be used in a range of practical financial modeling situations
3. Best Practices for Equity Research Analysis – James Valentine
James Valentine’s book is a classic and, therefore, makes the top three on our list. Geared toward equity research, the book provides extremely practical and helpful advice for anyone who wants a career in that field. It includes:
4. Financial Analysis and Modeling using Excel and VBA – Chandan Sengupta
Number four on our list of top financial modeling books is by Chandan Sengupta, who dives into the world of VBA as it relates to Excel models. If want to learn how to incorporate VBA into your models, Sengupta’s book is definitely for you! Key highlights include:
Features of Excel that are essential for financial analysis and modeling, such as the Ribbon, PivotTables, data analysis, and statistical analysis
Financial analysis and modeling, and advanced features of Excel and VBA, taught by using a step-by-step, “hands-on,” learn-by-doing approach
Learning how to efficiently write formulas to answer what-if questions and find iterative solutions to problems
Another classic on the must-read financial modeling books list. Benninga’s book is 100% focused on one thing: financial modeling. If you want to fully round out your skills and become a genuine Excel “master,” we highly recommend this book. Key points include:
Using Excel software to solve finance problems
Examples used in the book draw on actual company data
Tips on obtaining current data from the internet
Concepts relating to modern corporate finance, investments, and derivatives
6. A Practical Guide to Investment Banking and Private Equity – Paul Pignataro
This book has a unique angle to its approach, which is helpful for those targeting careers in investment banking, or aspiring to work in private equity or hedge fund management. You won’t be disappointed if you take the time to read this book! Some highlights include:
Handbook for investment banking professionals and business students looking to get into the field
Goes through the model building and valuation process in extensive detail
7. Financial Modeling for Business Owners and Entrepreneurs – Tom Y. Sawyer
Tom Sawyer’s Excel guide is perfect for business owners, high-level company executives, and managers. It incorporates financial modeling with basic business principles and business plans and provides step-by-step methods for handling specific business problems. Among the key highlights of this book are all of the following:
How to connects business planning with a financial model in a simple and direct manner
Designed to serve entrepreneurs and small business owners
Learn how to easily formulate and test various hypotheses and assumptions of your business model
Offers a simple, straightforward method for creating plans and analyzing different possible paths for a startup financial model
Keys in on how to maintain a project management perspective that will help you continually focus your time and energy on the most relevant/urgent tasks for efficiently growing your business
8. Building Financial Models – John Tjia
John Tjia’s book provides readers with sound knowledge of how to use Excel tools to create robust financial models that are easy for users to understand. In other words, it’s excellent for learning how to put together clear, persuasive presentations. It walks you through how to develop a projection model, dedicating individual chapters to each phase of the process. The key components of the book include the following:
Projection models – What they are, how they are used, and how they can vary between industries
Accounting and finance concepts that underpin working financial models
Detailed directions for using spreadsheet software to create dynamically powerful financial models
Producing and designing a projection model that allows the user to change inputs quickly for sensitivity analysis
More Financial Modeling Resources
We hope this has been a helpful guide to the best financial modeling books for learning how to build models on your own. Additional CFI resources that you may find helpful include:
Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
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