Financial Analysis: Making Business Projections

Course details

Estimating future financial performance plays a big part in the life of start-ups and corporations large and small. By looking ahead, companies can proactively manage changes. Start-ups can use projections to build business plans and raise capital. This course is about making those financial projections: not by predicting the future, but by learning from past performance. Rudolph Rosenberg shares the techniques used by financial planning professionals to build robust financial projections using Microsoft Excel. He shows how to combine two approaches—bottom up and top down—into a well-rounded projection that will help you analyze revenue and expenses, anticipate changes, and incorporate company goals in a realistic picture of your company's future.

Learning objectives
Distinguish between forecasting and planning.
Recall the pros and cons of bottom-up projection.
Explain how a finance manager can utilize a sales pipeline in business projections.
Describe how a company can forecast its gross margin by product.
Identify the pros and cons of using top-down projection.
Recognize how business plans utilize forecasts.
Summarize how to develop a set of worst-case scenarios.

Concepts

0. Introduction

01 - Welcome
02 - What you should know before watching this course

1. Financial Projection Basics

03 - Financial projections
04 - The difference between forecasting and planning
05 - Treating start-ups and established businesses differently
06 - The top-down and bottom-up approaches
07 - Volatility and the treatment of exceptional elements

2. Estimating Volumes, Price, and Revenue

08 - Revenue projection basics
09 - Preparing past P&Ls
10 - Projecting revenue based on your resources
11 - Adjusting for changes in productivity
12 - Adjusting for changing resources
13 - Detailing your plan by month using seasonality
14 - Creating a product-level projection
15 - Adding back exceptional elements using pipeline information
16 - Market-driven forecasting

3. Estimating Cost of Production and Margin

17 - Gross-margin projection basics
18 - Determining which gross-margin profile to use
19 - Combining product performance with product margins

4. Estimating Operating Expenses

20 - Operating expenses (OPEX) projection basics
21 - Excluding exceptional items
22 - Projecting fixed OPEX
23 - Projecting variable OPEX
24 - Adding back exceptional elements

5. The Top-Down Approach

25 - Explaining the top-down approach
26 - The revenue trajectory method
27 - The exit methodology
28 - Projecting gross margin and OPEX

6. Setting Up Targets

29 - Finding balance between the two approaches
30 - Moving from forecast to plan
31 - Adapting projects for start-ups
32 - Developing worst-case scenarios

Conclusion

33 - Next steps

Financial Analysis: Making Business Projections

Authors

Rudolph Rosenberg