A basic knowledge of Excel functionality.

Course Description

Forecasting is the prediction of future events. In the finance field, this usually means that an organization is attempting to predict its future sales. Financial Forecasting and Modeling discusses the different types of forecasting methodologies, the situations in which they should be used, and how to construct them. The course also examines the layout and formulation of a financial model, and addresses specific issues within such a model, including the treatment of depreciation, debt, equity, and working capital. Further, the course describes the construction of short-term and longer-term cash forecasts, concluding with a review of the Excel functions that can be used for financial forecasting and modeling.


Steven M. Bragg, CPA

Steven M. Bragg, CPA, is a full-time book and course author who has written more than 70 business books. He provides Western CPE with self-study courses in the areas of accounting and finance, with an emphasis on the practical application of accounting standards and management techniques. A sampling of his courses include the The New Controller Guidebook, The GAAP Guidebook, Accountants’ Guidebook, and Closing the Books: An Accountant’s Guide. He also manages the Accounting Best Practices podcast.

Steven has been the CFO or controller of both public and private companies and has been a consulting manager with Ernst & Young and an auditor with Deloitte & Touche. He holds an MBA from Babson College, a Master of Finance from Bentley College, and a BA from the University of Maine (summa cum laude).

Course Specifics

Dec 12, 2017
A basic knowledge of Excel functionality.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Cite the characteristics of the Delphi method.
  • Identify the best uses of the different forecasting methods.
  • Note the situations in which a smoothing constant can be used.
  • Identify the different types of leading and lagging indicators.

Chapter 2

  • State which report makes use of the accounting equation.
  • Note how an income statement is used.
  • Identify the key inputs to a financial model.
  • Identify the complications caused by the use of a plug within a financial model.
  • Note the circumstances under which a business could fund its own growth.
  • Cite the cases in which an expansion of a financial model might be warranted.

Chapter 3

  • Note the sources of the receipts and disbursements method.
  • Identify the duration periods for the different types of forecasts.
  • Note why the results of an automated cash forecasting system may be incorrect.
  • Identify the reliability levels of the different types of cash forecast information.
  • State the reasoning behind the use of a cash forecast reconciliation.

Chapter 4

  • Note which Excel functions will fit straight and curved lines to the data.
  • Identify the types of information provided by the different Excel functions relating to forecasting.
  • Cite the inputs required for the different Excel functions relating to forecasting.

Table of Contents

Chapter 1 – Financial Forecasting

Learning Objectives


Uses for Forecasting

Forecast Characteristics

Implicit and Explicit Forecasts

Types of Forecasting Methods

Forecasting Method Selection Criteria

Moving Averages

Exponential Smoothing

Regression Analysis

Capture Ratios

Simple Forecasting Methods

Prior Year Actuals × Adjustment Factor

Average of Multiple Prior Periods

Expected Unit Sales Basis

Spending per Customer

Change in Advance Bookings or Orders

The Rolling Forecast

Use of Leading and Lagging Indicators

Forecasting Accuracy


Historical Basis

Update Frequency

Nature of Forecasting Model

Planning Deviations

Forecasting Traps

Setting Forecast Boundaries

Detecting Cresting Sales

Evaluation of Forecasts

Responsibility for Forecasting


Chapter 1 – Review Questions

Chapter 2 – Financial Modeling

Learning Objectives


The Financial Statements

The Balance Sheet

The Income Statement

The Statement of Cash Flows

Interactions between the Financial Statements

The Nature of Financial Modeling

The Financial Modeling Process

Key Inputs to the Financial Model

Structure of the Financial Model

Variables Section

Fixed Asset and Depreciation Modeling

Other Assets Modeling

Debt Payable Modeling

Equity Modeling

Balancing the Model

Covenant Monitoring

Working Capital Projections for a Growing Business

Working Capital for a Declining Business

Sensitivity and Scenario Analysis

Variables Sensitivity

Scenario Analysis

Excel Tools

Incremental Modeling Analysis

Model Risk

Budgeting and Planning Software

Pro Forma Financial Statements

Responsibility for Modeling


Chapter 2 – Review Questions

Chapter 3 – Cash Forecasting

Learning Objectives


The Cash Forecast

The Short-Term Cash Forecast

The Medium-Term Cash Forecast

The Long-Term Cash Forecast

The Use of Averages

Automated Cash Forecasting

The Reliability of Cash Flow Information

The Impact of Special Events

The Foreign Currency Cash Forecast

Cash Forecast Reconciliation


Chapter 3 – Review Questions

Chapter 4 – Microsoft Excel Modeling

Learning Objectives


Moving Averages Function

Exponential Smoothing Function

Linear Trend Function

Polynomial Trend Function

Regression Analysis

Iterative Calculations Function

Data Table

Goal Seek

Scenario Manager


Chapter 4 – Review Questions

Review Question Answers and Rationales



Final Examination

Answer Sheet

Course Evaluation

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