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Overview of VTA's Financial Training PROGRAMS |
VTA’s training programs are focused, hands-on, and intellectually challenging. Participants require a laptop with Excel 2000 or higher. Participants also need to prepare for programs via background reading material supplied by VTA. Where appropriate, case studies and problem solving workbooks are provided.
Without exception, all programs require participants to make intensive use of Excel VBA, which is the solution platform for all programs. Training programs are conducted either as publicly hosted programs or as in-house training programs. Course material is supplied 4 weeks in advance and includes, Reading Material, Program Slides, Case Studies, Scenarios, Hands-On Exercises and where relevant, Scenarios. Most programs are of 4 days duration – where required, programs can extend to five-days to provide additional coverage.
Download the India Brochure for a complete listing and description of Financial Training Programs on offer.
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The 'DCF & FINANCIAL VALUATION' Program |
Just as matter is composed of Atoms, every efficient financial transaction, whether in the corporate world, in a financial institution, in a non-profit institute, an educational institute, a municipality or Government, needs to be structured using Discounted Cash Flow concepts (DCF) - only a single yardstick of financial efficiency guides the investment decision: the return from Investment must be higher than the Cost of Capital of the Investment (after adjusting for Risk associated with the transaction). Return, in turn, comes from: (a) increase in Revenue or (b) reduction in Cost, or both. Universally, the evaluation of efficiency is accomplished by employing the Discounted Cash Flow Framework.
Project Finance, Bond Pricing, Securitization, Venture Capital and Private Equity Investments, Capital Expenditure Budgets, Financial and Savings Products, Mergers and Acquisitions, Replacement of Machinery, Viability of a New Road, Research and Development, Prospecting for Oil, Establishing new Minefields, Feasibility of a new Sports Facility or a Recovery Facility for Drug Addicts, Build-Operate-Transfer Projects, and so on, are examples of financial transactions where DCF techniques are applied to ensure resources are deployed in line with Return on Investment objectives (ROI) of an enterprise.
The measurement/forecasting of cash flow from an investment, the risk associated with cash flow, the discount rate to translate future flows to the present reflecting an appropriate cost of capital, constitute important components of DCF.
To acquire skills in employing DCF, participants need to be familiar with a specialized branch of mathematics that is at the heart of DCF: financial mathematics. Thus, the first and second days of the program are devoted entirely to discussing theory and financial mathematics.
Since Excel is an important tool for implementing DCF, the third day of the program will examine advanced features of Excel. The last day will be devoted to understanding theory in a real-life setting: the use of DCF concepts in Project Finance and Appraisals, Securitizing Cash Flows, Bond and Stock Pricing, Developing Financial and Savings Products, Replacing Machinery, Developing a Housing Finance Product, Developing a Leasing Product, Developing Banking Products, using Excel to carryout Monte Carlo Simulation Exercises, and so on. Participants will receive training in the use of CapInvest and in developing new products using CapInvest.
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The 'RISK RETURN FRAMEWORK FOR FINANCIAL INSTITUTION LENDING' Program
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Risk is a fact of life for every financial institution, whether a commercial bank, a leasing company or a consumer finance company. There are two ways to deal with Risk: (a) ignore Risk by dealing only in ‘Safe’ Transactions; for example, providing finance only for movable assets that can easily be repossessed in the event of default or movable assets having an active secondary market – this strategy limits the business a financial institution is able to participate in and thereby, its role and influence in the financial system. An unexpected side-effect of this risk-avoidance strategy is that a financial institution unwittingly assumes risk as its portfolio of assets tends to be confined to a ‘safe’ class of assets that do not necessarily represent a diversified portfolio of assets from a conventional viewpoint. A second limitation of this strategy is profitability: spreads and volume of business tends to be thinner.
The second (and preferred) approach to dealing with Risk requires a financial institution to integrate Risk into operations via the Pricing Mechanism: the Risk-Return Framework. At the heart of the framework is the fact that Risk and Return go together. Accordingly, high-risk transactions are priced higher compared to transactions with little or no Risk. This ensures a financial institution earns the expected rate of return, even with defaults, as these are statistically estimated and factored into Pricing. The Risk-Return framework requires a transaction be priced using several components:
- A Risk Free Rate, in turn derived from an Institution’s Cost of Capital;
- A Profit Mark-up, in turn derived from competitive forces in an economy;
- A Risk Premium, derived from the Risk Categorization of a Transaction – the higher the Risk, the higher the Risk Premium.
The Risk-Return Framework is a ‘Portfolio’ approach to dealing with Risk, in much the same manner as Risk is addressed in the Stock Markets or in the Insurance Industry. The Portfolio concept is very powerful, yet simple: the ‘outcome’ of a Portfolio can be measured with greater precision than the outcome of an individual item.
This 5-day Masterclass provides in-depth exposure to the theory and practice underlying the induction of a Risk-Return Framework into a financial institution’s operations. Once the transition is completed, financial institutions can expect a significant transformation of their role and influence in the financial system along with enhanced profitability, as they would have mastered an essential ingredient of operating in a World where Risk is a fact of life.
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Course Background
An executive in the present day global economy faces complex situations comprising of thousands of variables that need to be identified, related and processed, in order to arrive at an optimal decision, whether it is a M&A Situation, an Option Pricing Situation, an Econometrics Situation, a Treasury Situation, a Consumer Finance Situation, a Private Equity Situation, a Human Resources Situation or a Marketing Situation.
The use of spreadsheets and databases as decision making tools in such situations is fraught with limitations as these address simplistic situations and rely over-abundantly on Excel functions and recorded Macros whose effect is to transform a spreadsheet into a complicated theater where causes and effects become difficult to discern.
While a model can be constructed without writing a single line of code, such models tend to be severely limited in utility. Thus, the need to graduate to the next level of model building using Excel and its programming counterpart, Visual Basic for Applications (VBA).
A properly designed model enables a situation to be easily examined and its dimensions intricately manipulated to facilitate optimal decision making, whether it is a merger & acquisition model, an option pricing model, a budget, a securitization model, a model to forecast operations of an enterprise, a tax collections model or a lease pricing model.
This program exposes participants to advanced features of Excel and more importantly, to Excel's programming counterpart, Visual Basic for Applications. The program anchors topics by exposing participants to real-life models to encourage development of models that address unique requirements.
Regardless of the functional background of a participant, the program imparts skills
to (a) conceptualize (b) break-down
(c) order and (d) map variables to a modeling eco-system using Microsoft Excel.
Course Structure
Before participants are able to manipulate variables
for an end-objective, they need to break down a situation
into its constituent parts by identifying relevant variables
and by understanding relationships between variables.
Participants also need to understand the tools for creating
a financial model and to appreciate the difference between
database techniques (and data stored in enterprise databases)
and tools for financial modeling - they are not the same
- do not expect the database administrator of your organization
to provide you with these tools.
Finally, participants will need to develop skills in using
a desktop modeling tool; participants will need to realize
that skills are incomplete when these extend only to manipulating
Excel with the User Interface, no matter the degree of expertise
in Excel; participants will be exposed to the power that
can be unleashed when Excel is programmed
Course Objectives
This course focuses on modeling as a generalized
subject, regardless of the functionality a participant comes
from. The course will focus on conceptualizing relationships
that apply to variables in a given situation and the manipulation
of variables for an end-objective. Participants will take
part in a project to create a financial model from scratch
by programming Excel and in the process, applying theory
to practice. The course will impart valuable perspectives
and skills in applying financial modeling techniques to
address situations with a high degree of preparedness, whether
it is in a bank, in a mortgage lending institution, in corporate
finance, in a central bank, in astronomy, or in a chemical
or biological research institution.
Teaching Method
This course comprises of slide presentations, problem solving,
and discussions on (a) conceptual topics, (b) the architecture
of the Excel User Interface, (c) the Excel Programming Architecture,
(d) important features of Excel, (e) Excel objects and object
hierarchy, (f) the structure of the visual basic language
for programming Excel. Participants will be divided into
groups of two to four and each group will work on situations
using Excel; participants will receive a floppy with topics
for problem solving and will be encouraged to discuss and
question. A complimentary copy will be provided of "CapInvest",
a sophisticated financial model developed by the course
director, to provide focus to the program and to construct
from scratch, one of the pricing modules in CapInvest. Participants
will receive background notes, summary notes and instruction
sets on relevant topics.
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Financial Modeling / Program
Schedule
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Introduction |
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• Introduction to Financial
Modeling • About Vish Tumu Associates
• Definition of Financial Modeling
• Components of Financial Modeling
• What is not a Financial Model
• Advantages of Financial Modeling
• IPO Framework • Layout
Issues • Examples of Models
• Databases and Spreadsheets •
Excel Overview • Accessing Excel
• Code Modules • Objects
• Collections • Manipulating
Objects • Identifying Objects
• Worksheet as a Platform •
Form as a Platform • Requirements
for Modeling • Demo of CapInvest
and LeaseEx 2000
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Financial Modeling
Schedule - Advanced Excel |
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• Arrays •
Functions • Built-In •
Analysis Tool Pak • User-Defined
• Names • Formatting Values
• Excel Controls • Add-Ins
• Data Validation • Data
Management • Lists •
Data Filters • D Functions
• Pivot Tables • What-If
Analysis • One Variable Data Tables
• Two Variable Data Tables •
Goal Seek • Solver •
Scenario Manager
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Financial Program
Schedule - Excel Programming |
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• Entry Points into
Excel • GUI Vs Code •
Visual Basic Code • Parts of a
VB Procedure • Executing Code
• Manipulating Excel with Objects,
Properties and methods • Object
Hierarchy • Object Collections
• Excel Object Model • Macro
Recorder • Control Structures
• Types of Control Structures
• Excel Events • User Forms
• VB Controls • Alternatives
to Forms • VB Functions •
Object Browser • Range Object
• Worksheet Object, Properties, Methods
and Events • Range Properties
and Methods • VB Variables and
Constants • Arrays •
VB Operators • Examples of Code
• Hands-On Programming |
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Financial Program
Schedule - Projects |
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Participants
will utilize their knowledge to build
several models, including the following:
• Monte Carlo Simulation
– Queuing Scenario
• Monte Carlo Simulation –
Investment Scenario
• Share Price Forecasting
• Securitization Model
• Financial Calculator
• Consumer Finance Model
• Risk-Return Pricing Model
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The 'DEVELOPING CONSUMER
FINANCE PRODUCTS' Program |
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The IT enabled world offers a cornucopia of opportunities
to Finance professionals and institutions to deliver
cutting-edge, innovative solutions and products
to customers. To do so, entities need to make the
transition from rudimentary tools such as financial
calculators and homegrown spreadsheets, to sophisticated
decision tools and financial models. As competition
heats up in the financial market place, banks, leasing
and hire purchase companies, consumer finance, insurance,
and housing finance companies, all face the need
to develop new products, both financial and savings,
to retain existing customers and attract new customers.
To make their presence in the financial market place,
a permanent one, rather than transitory, finance
professionals need: (a) knowledge of fundamental
financial concepts underlying the development of
financial and savings products; (b) dexterity in
operating a world-class product creation software.
This program (a) provides a 3-day intensive training
in financial concepts and in the use of "CapInvest",
software of Vish Tumu Associates for creating Savings
and Financial Products; (b) offers a free 3-Month
license for installation and use of CapInvest on
unlimited PCs in an organization.
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Basic Structuring
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Analytical
Tools Vs. Databases |
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CI Installation Process |
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Common Features of Modules |
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Passwords |
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Fast Track Feature |
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Goal Seek Feature |
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Flat Rate Vs. True Rate |
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Localization Features |
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Reports. |
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Output Formats |
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Printing |
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Navigation |
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CI Documentation |
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On-Line Help System |
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Equated Transactions |
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Profiled Transactions |
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Reverse Transactions |
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LOAN / HP Equated Module |
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LOAN / HP Profiled Module |
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Cost of Capital Module |
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LEASING Equated Module |
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LEASING Profiled Module |
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Post-Tax Module |
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Lease Vs. Buy Modules |
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Overview of CI Portals |
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Characteristics
of Financial and Savings Products |
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Example of Financial and Savings
Products |
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Creating a Housing Finance
Product |
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Creating a personalized
Savings Product for a Bank |
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Creating a Leasing Product |
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Creating a Pension Plan Product |
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Using the Product
Developer Portal to create Advanced Financial
and Savings Products |
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Using the RePricing Portal
to Reprice Transactions in a floating rate scenario,
in an arrears scenario, to add principal to an
existing transaction or to deduct principal from
an existing transaction |
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Using the Zero Rate Portal
to create zero finance or concessional finance
products |
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Using the Rate
Conversion Portal to handle ticklish rate conversion
scenarios in a bank or in other deposit accepting
institutions |
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Using the Reverse
Function to develop flexible repayment transactions
wherein a customer develops the repayment schedule |
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Discussion
of Operating Lease via Case Study |
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A Lease Vs.
Buy Analysis to convince customers of superiority
of leasing vis-à-vis borrowing from a bank |
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Leveraging
the Taxation system to develop competitive lease
products using the Post Tax Module |
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Using the Power Pack Portal |
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Using CapInvest
to aggressively respond to a competitive financing
proposals
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This program comprises of 15 sections and is designed to familiarize participants to leasing fundamentals and leasing issues; the focus of the workshop will be mainly conceptual, although country specific examples will be used appropriately. Issues will be examined from an Institutional as well as a Leasing Company's perspective. In disseminating content, the workshop will follow the Socratic method of exposition, encouraging attendee participation; as such the duration of the workshop is divided equally between exposition and discussion. Workshop attendees will be encouraged to participate vigorously in the workshop. The workshop will help participants to augment their knowledge of leasing and enhance the quality of project appraisals. A 63 page background paper will be furnished in advance to attendees, along with hard copy of slides. |
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The Concept |
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The Division Vs. Subsidiary Issue |
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Leasing Risks |
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Lease Pricing |
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Leasing Variables |
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VAT |
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Portfolio Construction |
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Lease Distribution |
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Project Funding |
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Project Sponsors |
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Quantitative Models in Leasing and DCF |
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Lease Accounting Issues |
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Project Preparation |
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Supportive Leasing Environment |
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Operating Lease Case Study, Lease Vs. Buy Case Study, Pricing Case Studies, Post Tax Pricing Case Study, Lease Pricing in a VAT Enabled Scenario |
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