Excel, the tool of opportunity: It is the software of choice for most finance professionals, and used for countless every-day problems. In “Excel Modeling in Corporate Finance”, Craig W. Holden presents numerous typical issues from DCF calculations to options valuations.
The topics within the book loosely follow the contents of a typical finance programme at a university: cash flow calculations, annuities, bond valuations, capital cost evaluations, yield curves, financial planning and options valuations. But the book is not your classical finance text book – nor does it want to be. The author only touches upon finance basics, or refreshes them where needed. The main focus is on applying and implementing the theoretical concepts in Excel in short, to-the-point tutorials. When combined with a classical finance text book, the reader will be able to greatly enhance his or her understanding. Each chapter contains a number of questions that can be answered using (and tweaking) the small financial model that was covered right before. The catch: Solutions are only available online, and only to university lecturers that have been granted access by Pearson Education. Readers outside of university life do not benefit from this.
Open the book, insert the CD, hack formulas
The book is printed in a quite large format – a good choice, because that way spreadsheet screenshots and complex formulas are well-arranged and easily readable. On the spreadsheets, a number of text boxes present additional explanations. That is helpful most of the time, but can become a bit confusing with sometimes up to 8 boxes. The book comes with a CD-ROM, on which you will find the complete book as a PDF as well as all examples in Excel format. That way, the reader can easily follow all the examples live, while working with the book. And that is a must: In a lot of places, formulas are missing, and the reader is instructed to fill the gaps. This way, concepts taught in the book automatically become much more accessible to the reader. The author primarily focuses on Excel 2007 and 2010 – older versions may be incompatible with parts of the examples.
Conclusion: A must-read for up-and-coming financial modellers!
Craig W. Holden: Excel Modeling in Corporate Finance
Pearson (4th edition, August 2011)