PFM preparation and examination is a highly interactive program designed to deliver practical understanding on effective financial modeling. The program covers many subject areas and and through real-life case studies, the emphasis will be on practical approaches.
The curriculum covers all the knowledge required for an analyst to develop and analyze a model. The curriculum includes new concepts and models which are not delivered in other modeling classes where some concepts are proprietary to PFM Program.
Main goal of PFM Program is to transform the field of financial modeling to a new level. For that goal, the curriculum is developed in such a way that it delivers topics, techniques and perspective never delivered in other programs.
PFM Curriculum is outlined in PFM Body of Knowledge (PFM BOK). The BOK is the basis to determine which topic will appear on PFM examination.
PFM has adopted Sustainable Financial Modeling principles to ensure that a model developed based on reasonable and adequate basis on model preparation process with emphasis on model reasonableness in the long run. This is important because no onecannot really predict the future. However, by developing a model based on sound principles, the potential for future deviation from prediction is much reduced. Hence, the models will gain more credibility and trust from clients and public.
The Body of Knowledge of the Program has been carefully developed in order to equip participants with techniques to improve the quality of financial model that he/she produces. The aim of the goal is to enable participants to prepare complex financial model by using Excel. Hence, this program is practice intensive and can be directly implemented in day to day work.
The curriculum covers topics based on five basic pillars:
- Forecasting Techniques: predicting assumptions by using time series statistics. The forecasting methods used are linear and non-linear models. There will be session on how to develop Monte Carlo Model by using Excel.
- Financial Projection: preparing future financial statements of a company. Covers complex topics such as modeling production and trading Cost of Goods Sold and Inventories, Modeling projects with Interest During Construction, Modeling FX Gain Loss, Continuous Capex and Continuous Loans, Modeling Intangibles, Estimating Working Capital. Discuss about consolidation on the projection of a group of companies.
- Corporate and Project Valuation: by using 6 internationally recognized valuation methods, PFM Program will enable you to value company by using various methods and understand the strength and weakness of each model. The capability to employ those models on realistic setting will enable you to have many valuation arsenals which will help you find the more accurate valuation.
Those models are:
- Discounted Cash Flows
- Enterprise Value Based Discounted Cash Flow
- Dividend Discount Model
- Residual Income
- Enterprise Value Multiples
- Price Multiples
The discounted based valuation can be conducted by using single or multiple interest rates.
- Risk Analysis: consists of Sensitivity Analysis and Scenario Analysis by using methods such as: various types of Ratios, various types of Duration, Assumption Sensitivities and many others. Participant will also learn to develop risk analysis (including Probability of Default) from Monte Carlo based model.
- Project Modeling and Analysis: Helping you understand how to model a project and conduct various feasibility analysis tools. Discuss about weaknesses in popular tools such as Net Present Value and how it can be gamed to have an artificially feasible project. There will also be discussion about NPV and IRR Sensitivity for project risk analysis.
PFM curriculum is built in line with Chartered Financial Analyst (CFA) and Financial Risk Model (FRM) PFM Curriculum. Hence, for participants who are enthusiasts of those programs, PFM curriculum will provide strong practical understanding on how to apply the concepts taught in those programs and increase the probability of passing exams in those programs.
PFM Program consists of training session and 1 whole day exam consists of two exams:
- Multiple Choice Exam
- Computer Practice Exam by Using Excel In order to obtain PFM Designation, you need to pass both exams.
PFM program is developed based on thorough study to find the best method to predict the future of a company or project. Some applicable proprietary methods which are not or rarely taught in modeling classes elsewhere are also part of the curriculum,
- Discounted Cash Flow and other discounted based valuation models by using multiple interest rates
- Conducting NPV and other feasibility analyses by using multiple discount rates
- Modeling Delta ratios
- Equity Duration, Cross Duration Matrix and Assumption Sensitivity risk analysis
- Company and project valuation connectivity with other asset classes (bonds, forex, derivatives) by using financial model
- NPV Resurface and NPV sensitivity to measure the risk of project demise