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Financial Modeling (Paperback)
by Simon Benninga
| Category:
Finance, Textbooks |
| Market price: ¥ 718.00
MSL price:
¥ 708.00
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| Stock:
Pre-order item, lead time 3-7 weeks upon payment [ COD term does not apply to pre-order items ] |
MSL rating:
 Good for Gifts |
| MSL Pointer Review:
Comprehensive with concepts explained with immense clarity, and end-of-the chapter exercises as well as CD-ROM, this book is wildly popular and an absolutely essential reading on financial modeling. |
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Author: Simon Benninga
Publisher: The MIT Press; 2nd edition
Pub. in: September, 2000
ISBN: 0262024829
Pages: 640
Measurements: 9.3 x 7.3 x 1.3 inches
Origin of product: USA
Order code: BA00319
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- Awards & Credential -
A bestseller in the finance category on Amazon.com. |
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- MSL Picks -
A guide to solving financial models with spreadsheets, bridging the gap between theory and practice. Takes the reader through each model step by step. The CD-ROM, which is platform independent, contains Excel worksheets and solutions to the end-of-chapter exercises in the text. DLC: Finance - Mathematical models.
Overall this is an excellent text on financial models.
Target readers:
Investment bankers, corporate financiers, controllers, analysts, MBAs, finance students, and anyone who wants to use core Corporate Finance concepts in the real world.
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- Better with -
Better with
Mergers, Acquisitions, and Corporate Restructurings
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Simon Benninga is Professor of Finance at Tel Aviv University and at the Wharton School of the University of Pennsylvania.
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From Publisher
Too often, finance courses stop short of making a connection between textbook finance and the problems of real-world business. Financial Modeling bridges this gap between theory and practice by providing a nuts-and-bolts guide to solving common financial models with spreadsheets. Simon Benninga takes the reader step by step through each model, showing how it can be solved using Microsoft Excel®. In this sense, this is a finance "cookbook," providing recipes with lists of ingredients and instructions.
Areas covered include computation of corporate finance problems, standard portfolio problems, option pricing and applications, and duration and immunization. The second edition contains six new chapters covering financial calculations, cost of capital, value at risk (VaR), real options, early exercise boundaries, and term structure modeling. A new technical chapter contains a potpourri of tips for using Excel®.
Although the reader should know enough about Excel™ to set up a simple spreadsheet, the author explains advanced Excel® techniques used in the book. The book includes chapters dealing with random number generation, data tables, matrix manipulation, and VBA programming. It also comes with a CD-ROM containing Excel® worksheets and solutions to end-of-chapter exercises.
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| View all 10 comments |
Yvonne Reinertson (MSL quote), USA
<2006-12-29 00:00>
As a university teacher of strategic corporate finance and optimal investment, I have watched the financial industry analytics transcend hand calculation with financial calculators to financial modeling with spreadsheet software. Depending on whether the financial specialty is in corporate or banking/brokerage, the job skills requirement can range from corporate cost control to optimal portfolio design. Thus, modeling skills services both company research and financial planning.
Whenever I travel in my business, this reference book goes with me; additionally, in both Russia and Germany, it was the book used by the corresponding McKinsey consultants. If you are comfortable with financial principles, purchase this book. If, however, you need to review financial fundamentals, then first purchase Dr. Benninga's textbook, Principles of Finance with Excel (see my review).
Statement: Learning this skill will keep you from selling electronic appliances at a discount retailer, cold calling for a debt shop, or writing contracts on leased vehicles, as your first "out-of-college" job. If you are already out of college, learning this skill might keep you from being stuck in a dead-end position.
INVESTMENTS: The study of equity and capital markets is fundamental to anyone specializing in finance. Potential development from studying this book is the possibly dramatic extension to your financial skill set by adding the ability to analyze and then model optimal investment portfolios using Excel. Most analyses in business will be completed using spreadsheets, or other software, and not by hand calculation. In fact, much of your time as a financial specialist, in any capacity, will be building spreadsheets to solve complex financial problems. The sequence of spreadsheets used in investments analytics have become increasingly sophisticated: From complex financial models in asset valuation to detailed derivative payoff structures. With the skills developed in studying advanced business analysis techniques in Dr. Benninga's textbooks, investors, and advisors, can locate efficiently run companies to be included in optimally diversified portfolios.
In watching the transcendence of financial industry analytics transcendence hand calculation with financial calculators to financial modeling with spreadsheet software, I have repeatedly witnessed students with financial modeling skills obtain jobs that are typically reserved for specialists holding advanced degrees or having multiple years of experience. Both brokerages and banks in the investment side of the financial industry are increasing requiring knowledge and skills in designing optimal portfolio design. Put simply, it is the ability to strategically design a "real time" investor's portfolio that is driving the demand for Excel modeling skills by financial firms. In order to design optimal portfolios, skills in corporate financial modeling are necessary. The ability to recognize well run companies is the ability to compile a diversified and optimal portfolio: The company seeks tools to help run operations and financing efficiently, and the investor seeks tools to help find efficiently managed companies. While most company's financial models are designed based on revenue analytics, the investor's model is a portfolio consisting of the various potentially profitable investments. For investors, the stocks being held in the investor's portfolio will be those of efficient companies exhibiting the investment characteristics required by the investor. From the business viewpoint, those who truly gain from knowing these analysis techniques are the businesspeople that use them to run efficient companies; from the investment viewpoint, those who truly gain are the individuals who use the tools to find those efficiently managed companies worthy of investment. It is important to realize that the skills needed by an investor are no different from the skills needed by good managers. When evaluating a company for investment, an investor will often use the same models that business executives use in their financial and operational management and forecasting. Once an individual learns how to analyze and value cash flows, the viewpoint can be either that of a business evaluating a potential project, or an individual evaluating a potential investment. The point in all of this, with either company financial planning, or investment planning, making the needed modifications to a changing, and rapidly more global, world in Excel is easy.
In using Dr. Benninga's books, you can expand beyond the capital market basics in your financial knowledge to include spreadsheet modeling; furthermore, in this process, develop highly marketable financial modeling skills that will boost your ability to advance your career. |
A reader (MSL quote), USA
<2006-12-29 00:00>
The simplicity and transparency of many of these models inspires me to give this book five stars. I am an expert modeler and find it useful to have an excel version of many of the more complex models as a cross-check and as a quick desk-top reference. People are often amazed at how quickly I can produce a ball park indication in which the handle is always correct. This book is a must for advanced model builders. If one can't produce a close answer in Excel, one may have to review the fundamentals before embarking on an advanced - and time consuming - model project.
The only shortcoming is in the fastest growing new products in the credit derivatives world, but the methods in this book can be adapted. Tavakoli provides product descriptions in another excellent resource "Credit Derivatives".
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James Garrett (MSL quote), USA
<2006-12-29 00:00>
If you need to build a working valuation model, calculate the risk of a portfolio with 100+ securities, or figure out what return you might expect to get from a portfolio of high-yield bonds, then you'll find Simon Beninga's "Financial Modeling" merits far more than five stars: this is one book that is indispensable.
One of the biggest problems I ran into during my MBA program was the way my professors taught Corporate Finance. I had great profs, true, but they were teaching theoretical concepts from theoretical textbooks. Sure, you learned the basics: CAPM, net present value, basic options and futures, Arbitrage Pricing Theory, VAR and TEV, but I have always maintained that the best way of learning a subject - particularly corporate finance - is by getting your hands dirty and digging into the guts of the material.
Since Corporate Finance, off-balance sheet instruments aside, isn't very dirty, the best way to get a hands-on practical approach in terms of Capital Structure, the appropriate discount rate to use in pricing an asset, risk, and optimal debt and dividends is to program in Excel and Visual Basic. The problem is that many top finance texts don't offer supplemental material to translate the theoretical concepts into actual valuation and spreadsheet models, which any financial analyst will contend is the life-blood of the industry.
With that in mind, Simon Beninga's Financial Modeling is a kind of "Joy of Cooking" for initiate investment bankers, corporate financiers, controllers, analysts, and anyone who wants to use core Corporate Finance concepts in the real world. Beninga goes through the standard laundry list of Corporate Finance text topics - from the optimal risky portfolio to the term structure of interest rates - and shows you how to translate these concepts into workable spreadsheet models that can illustrate, illuminate, and get to the heart of a problem.
If you're a new MBA or financial analyst, you'll find much to love in Beninga's approach, and by pairing the newly expanded 2nd edition up with a top theoretical finance textbook (Ross, Westerfield et al.'s Corporate Finance is a fine example) you'll get the most out of your MBA program and have a solid foundation for building Excel and Visual Basic financial models that work.
I liken Financial Modeling to a cookbook, in that Beninga provides all the ingredients necessary to the model at hand: he begins with a sprinkling of theory, whether it's modeling a bond portfolio's immunization, calculating the cost of capital, estimating a portfolio's Beta with no short-selling, or pricing put and call options using both the binomial theorem and Black- Scholes. His writing is spare, terse, and to the point, but I have learned more about advanced corporate finance theory through Beninga's marvellously pithy writing and copious Excel examples than I have in reading ten 'top of the list' finance books.
In addition to nicely expanded sections on options (including portfolio insurance) and leasing (including the technically sophisticated subject of leveraged leasing, which requires Excel to comprehend), Beninga concludes his sprightly little tome with a section on getting the most out of Excel (useful little shortcuts that a financial analyst will need but may not have heard of) and a nice little introductory primer on programming in Visual Basic.
Financial Modeling is an absolute essential if you're going to make Corporate Finance your profession. For an equally elegant and practical treatment of building discounted cash flow models for businesses, the reader would be advised to pick up Beninga's Corporate Finance, which, while not equally oriented in spreadsheet modeling, is one of the most terse, accessible, and reasonably technically sophisticated Corp-Fin books on the market today. (James Stephen Garrett, USA)
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A reader (MSL quote), USA
<2006-12-29 00:00>
I recently got Benninga's book on financial modeling. I think it is a great book! For once, someone has taken the time to write a book that takes financial theory out of the classroom and follows it directly in a simple path to useful applications. Unfortunately all too many academic authors fail to take their work the final step and thus much of it can never be fully applied.
I went through many of the exercises and did not find any errors or mistakes. I suspect that those readers commenting on mistakes lack certain basic Excel skills (necessary for this book). If you're interested in financial modeling, or want to sharpen your finance skills, this is the book to get.
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