Speaker 1: Let's take a look at the top 10 financial modeling skills that are required to be a world-class financial analyst. Building financial models is both an art and a science, and it requires creating a tool in Excel that can be used to evaluate investment opportunities and make business decisions. The skills that we're going to go through today fall into three categories. Broadly speaking, it's either accounting and financial knowledge, Excel skills, or problem solving, logic, and design skills. All three of these come together to form a very unique skill set that makes you a world-class financial modeler. It all starts with accounting skills. In order to build a financial model, you have to have a solid understanding of a company's financial statements and its accounting policies, including things like matching principles, accruals, and non-cash items, as well as revenue recognition. With a solid understanding of accounting, you really know what the numbers that go into the model mean. You also need to be able to interpret and understand the financial statements. On top of strong accounting skills, it's also important to be very good at using Excel. Excel is a powerful tool, and we need to use things like keyboard shortcuts to save time and navigate quickly through our model, and we have to have a deep understanding of formulas and functions so that we can perform the calculations and the analysis that we need to perform. There are many, many levels of Excel skills that we can rise to, and in CFI's financial modeling program, we take you to the most advanced level that we believe you need to perform world-class financial modeling. The next skill is being able to use formulas to link the three financial statements together. The three financial statements being the income statement, balance sheet, and cash flow statement, which form the foundation of the financial model. So you have to have a combination of accounting and Excel skills, and then the art of connecting the three together in Excel. From the three statement model, forecasting is then very important to build the future performance of the company out in Excel. There are both scientific methods of performing forecasting, such as regression analysis, and also a real art to forecasting as well when you take into account qualitative factors, such as management skills and culture of a business. So that's a unique skill set that's required as well. From there, you need general problem-solving skills as well. The general problem-solving skills mean you can think in a logical and very organized manner. That means you can lay out your financial model in a very clear and easy-to-follow way. Attention to detail is extremely important when building a financial model. There are so many numbers, formulas, and functions in the model that you have to be able to keep track of all of them and make sure the model is error-free. Another important skill in financial modeling is being able to simplify complex information, to distill large amounts of data into a simple and easy-to-use format. As Leonardo da Vinci said, simplicity is the ultimate sophistication, and this is very true when it comes to financial modeling and valuation. Design skills are much more of an art than a science, and are very important when it comes to presenting the results of your financial model and of your analysis. If you want to get your point across, you have to be able to present it in a clear visual manner so that other people understand your analysis and understand the implications of it. A good model should always be easy on the eyes and easy to follow, with clean formatting, beautiful charts and graphs, and look extremely professional. These are the principles that we always teach in our CFI Financial Modeling Valuation Program. Next are presentation skills. Once you have a beautiful output from your model, you have to be able to create an effective presentation or pitch book that you're ultimately going to deliver to either a client or internally at your company, but to some end user who needs to understand the analysis. Using visuals and a coherent and logical flowing presentation is a great way to achieve this. Finally, point number 10, detail versus high level strategy, is essentially saying the ability to bring it all together. The ability to zoom in to very, very minute levels of detail, and then quickly zoom out to a 10,000 foot view to understand the high level strategy, and making sure that neither part is missed. That you have this high level strategic view of the business, but yet you understand and have incorporated the very low level detail that's required to make sure that the analysis is accurate. When you're able to incorporate all 10 of these skill sets together, you then truly are becoming a world class financial analyst.