Too often, financing classes stop short of earning a link between textbook finance and the nagging problems of real-world business. Financial Modeling Bridges this gap between theory and practice by giving a nuts-and-bolts guide to solving common financial models with spreadsheets. Simon Benninga requires the reader step by step through each model, displaying how it can be resolved using Microsoft Excel.
The long-awaited third release of this standard text keeps the “cookbook” features and Excel dependence that have made the first and second editions so popular. In addition, it offers significant new material, with new chapters covering such topics as bank or investment company valuation, the Black-Litterman approach to portfolio marketing, Monte Carlo methods and their applications to option prices, and using array functions and formulas.
Other chapters, including those on basic financial computations, portfolio models, determining the variance-covariance matrix, and producing random amounts, have been revised, with many offering new and improved material substantially. Other areas covered include financial record modeling, leasing, standard portfolio problems, value in danger (VaR), real options, duration and immunization, and term structure modeling.
Technical chapters treat such topics as data furniture, matrices, the Gauss-Seidel method, and tips for using Excel. The final section of the written text covers the Visual Basic for Applications (VBA) techniques necessary for the book. The accompanying Compact disc includes Excel solutions and worksheets to end-of-chapter exercises. Simon Benninga’s 3rd Edition of Financial Modeling with Excel is the single most useful book for finance students and professionals ever published and continues to offer a superb reference and textbook for students and practitioners of applied finance. For more info, please use the “Look Inside” feature and look at the Table of Contents carefully, because I am going to stress-selected portions.
It is difficult to overstate how useful and practical and helpful this work is perfect for a broad audience and Financial Modeling is the solitary finance book I would recommend for everyone after they took (or read themselves) Introductory Finance. For all those looking for “one-stop-shopping” for models that resemble those of professional financial analysts then there is no better value than Benninga’s FM3.
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Benninga’s FM3 is a coal-face work for individuals who must make financial decisions using models. A couple of further specialist texts in topics covered here (credit modeling, portfolio construction, option prices), however the models in FM3 are the first advanced models put on loans, bonds, options, and equity portfolios. Master these and then specialized texts are simpler to digest. Financial Modeling 3rd (FM3) is not just a mere collection of recipes but rather topical introduction, explanation, and direct technique then.
The pleasant new chapters cover bank or investment company valuation, the Black-Litterman method of portfolio optimization, and Monte Carlo methods and applications to option pricing, and the prior 2nd edition’s small section on using array functions and formulas has been extended. The chapter on data downloads from YAHOO is also welcome, especially for those on a budget.
There is a single significant flaw in the work, which is redeemable and excusable. Far too usually the discounting in the chapters is performed over a flat interest curve. The CD attached in the rear of the reserve is alone worth the purchase price, with over two rates of models that are useful and versatile for specialists and students as well. The data files are separated and stored according to chapters and subject material. Each file has a logical progression of the concepts advanced in the written book, and each separate sheet either stands, or appropriately links to data and models on other sheets alone, so editing on your own purposes is a breeze.
A partner’s fascination with the relationship is a subjective concept, but basically considers a partner’s economic, instead of tax, interest. Regarding John’s LLC, the allocation of income and loss to John and the allocation of most tax benefits to the neighbors lack a small business purpose and are, instead, made to help the neighbors avoid fees.
The people’ economic interest in the LLC is obviously at variance with the allocation of tax benefits. 15,000, and his / her taxes liability will be recalculated. The known members will owe the excess tax, plus interest, and a substantial penalty. Indications are sometimes used to try and “sell” usually unusable charitable deductions.