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Certificate in Financial Modeling Program Curriculum
The Equity Research Institute​ at Gutenberg Research

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Our vision for this program is to provide an easy to follow, step-by-step approach to financial modeling. The curriculum demonstrates how to build a financial model from the ground up, starting with a blank spreadsheet, and ending with a comprehensive set of interrelated financial statements and share valuation estimates. The program mimics the “on-the-job” experience you would receive as a new Equity Research Associate at an investment bank. We will start by building a model for FedEx Corp from scratch. After the model is complete, we will discuss how to use it, maintain it, and execute a mock earnings release exercise where we will update the model to include the latest company earnings release, much like what would be expected of a new sell-side research analyst.

​Structure of the Program

​There are 3 primary components to this program, all designed to add various elements to your training: 1) written curriculum, 2) demonstration videos, and 3) supporting spreadsheets. These resources are available through the Certificate Program Education Hub which you will be able to access after registration.

​​This program is offered in two formats, an online virtual classroom, or live in-class program. Both formats cover the same curriculum. The live course covers the topics in a fast-paced, bootcamp-style format over the course of two days. All live course participants will also have access to the full-scope online version of the curriculum, including the online video sessions.

​​Periodic live web conference will be held online where students will be able to ask questions, or listen into their collogues’ questions. All students will be able to access the web conference sessions. Students may also submit questions through the learning hub, where answer will be posted in short videos.
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Earning the Certificate

​At the completion of this training program you will receive a Certificate in Financial Modeling from The Equity Research Institute at Gutenberg Research. In order to qualify for the Certificate, you must pass the financial modeling exam which covers the topics in the program curriculum, and build an earnings model of your own.

​About the Exam (Required): If you are taking the online version of the program, you will have six months from the day you registered to complete the exam. If you are taking the live version of the program, you have six months from the first day of class to complete the exam. The exam consists of 50 questions, each with an equal weighting. You must answer 70% or more of the questions correctly to complete the certificate program; therefore, you must answer at least 35 of the 50 questions correctly. If you do not score above 70% you will have to retake the exam.

​​The exam consists of six cases which highlight various components of the modeling program, followed by a section of multiple-choice questions which focus on financial statement relationships.

The exam has a four-hour time limit. All questions must be answered in one sitting as you will not be able to pause the exam, or return to a question after closing your web browser. All questions are multiple choice. The topics for each of the exam cases are as follows:
  • Case 1—Primary Topic Covered: Basic model building concepts. Number of Questions: 8 
  • Case 2—Primary Topic Covered: Model forecasting techniques. Number of Questions: 5
  • Case 3—Primary Topic Covered: Equity Risk Premium (ERP) and the required return on equity. Number of Questions: 6
  • Case 4—Primary Topic Covered: Cash flows and share valuation. Number of Questions: 14
  • Case 5—Primary Topic Covered: Forecasting, scenario and sensitivity analysis. Number of Questions: 4
  • Case 6—Primary Topic Covered: Regression analysis. Number of Questions: 5
  • Multiple Choice Section—Primary Topic Covered: Financial statement relationships. Number of Questions: 8
​You may access the exam anytime you are ready, but should read the curriculum, watch the demonstration videos, and complete the wrap-up questions at the end of each class before taking the test.

​About the Model Submission (Required): In addition to completing the exam, all students must also submit an earnings model to complete the certificate program. Models must be submitted within the same timeframe described in the exam section (within six months). For your model, you may select any public company listed on a U.S. exchange, or you can submit your version of the FedEx Corp model. If you choose to submit a FedEx model, you must incorporate your unique forecast (not calibrated to the consensus estimate). You must include a summary of your primary assumptions within the model. This can be in bullet form, or if you would like to publish an article (refer to the optional section below), your article will be accepted as the summary. You will be given the option to publish your model on GutenbergResearch.com if you choose. All Terms of Use apply to the submission of any content.

Models will be graded on a “Pass/Fail” basis. You must achieve 70% of the possible points to receive a passing grade. The model scoring will be governed by the following point matrix:
  • The structure of your model can differ from our templates (i.e. different worksheets for the various financials); however, the model layout must be logical and easy to follow: 20 points.​
  • The model drivers must be logical. This point covers the factors you use to disaggregate earnings in your model (i.e. “the Earnings Engine”): 20 points. Note: if you choose to submit the FedEx model, these points will be shifted to item #9 since the earnings engine has already been established for FedEx.
  • The primary model inputs (blue cells) must be logical based on your projections about the company: 20 points. Note: this does not mean the model reviewer has to agree with your forecast, but that your forecast makes sense based on your theories about the company, economic conditions, competition, etc. 
  • The 3 financial statements must be forecasted including the Income Statement, Balance Sheet, and Cash Flow Statement: 5 points.
  • You must forecast at least four quarters of projections in your model: 5 points.
  • Cash on the Balance Sheet must equal the ending cash balance from the Cash Flow Statement: 5 points.
  • The Balance Sheet must balance (Assets must equal liabilities plus equity): 5 points.
  • Links between the financial statements must be logical: 5 points. 
  • Historic results must tie to SEC filings or company reports: 5 points.
  • The segment section must reconcile to the Income Statement: 5 points.
  • At least one share valuation technique is required: 5 points. Note: You can use one of the two valuation methods described in the curriculum or a different method of your choosing. Whichever method is selected must be logical.
  • Your model cannot include macros. It will be rejected without a grade if macros are found. 
  • Regression analysis is not required. 
  • A target price band is not required.
Article/Research Report (Optional): If you choose to publish an article with your model, you will receive 10 extra credit points, which will be added to your model score. There are no specific requirements for your article/report.
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​The written portion of the curriculum consists of a textbook delivered electronically as a PDF (approximately 200 page long). The curriculum begins with an introduction to modeling in Class 1, covering some of the basic concepts which lay the foundation of the modeling process used throughout the curriculum. The core financial statement model building steps run from Class 2 through Class 4, where we will cover the Income Statement, Balance Sheet, Cash Flow Statement, and forecasting. 

​​Class 5 covers the inputs for the Discounted Cash Flow (DCF) valuation, including the calculation of the market Equity Risk Premium (ERP) using interest rates, volatility and equity market return data, deriving beta, and calculating the required return on equity. Classes 6 and 7 cover share valuation. After Class 7 you will have completed the initial model build, including the forecasted share valuation. Class 8 then demonstrates how to use and maintain your model. This includes a simulated earnings release.  Appendix 1 shows how to use regression analysis to project inputs for your model.

​​The remaining Appendix entries include the latest updates to the FedEx model, as well as the external data used as inputs: volatility, interest rates, equity market returns, beta, the Equity Risk Premium (ERP), average returns and the standard deviation in returns. As new data is released, we will continue to add appendix entries to the end of this program, so you can check back from time-to-time and continue the learning process as economic conditions, and the competitive landscape changes. 

​The following Key Concepts will be covered in the curriculum as recurring themes:
  • Key Concept 1—Modeling is a Formalization of Our Opinions: This idea demystifies the term “model”, which some take to mean a black box without transparency over the methodologies employed. Instead a model is simply the mechanism we use to list out our forecast assumptions, for the sake of bringing order to our projection.
  • Key Concept 2—The Fundamental Principles of Modeling, Balance and Drive: These two points help frame how you should design your model to fit your specific needs. Balance, relates to the level of complexity in your model. You should “balance” the resulting analytical benefit you accrue from each additional layer of complexity, against the added effort to create it. Drive, deals with the selection of metrics used in the model, which should focus on items that are critical to the related accounts in the financial statements (or “drive” the value of the financial statement line item).
  • Key Concept 3—An Approach to Model Any Account, for Any Company: There are many different approaches to creating a financial model. The Gutenberg Modeling Framework provides a basic blueprint of tasks to perform during the modeling process, with specific questions to consider as you build your forecast.
  • Key Concept 4—Valuation is in the Eye of the Beholder: There are many different opinions of market efficiency and valuation theory. Two approaches are covered in the curriculum, with many opportunities for customization based on your particular views on valuation.
  • Key Concept 5—Models are Living Tools: After a model has been built, it should not sit idle. It should be used to perform analysis, debate potential company outcomes, and explore market possibilities. Most importantly, it must be maintained as new information is released. This point is critical. A model that is completed today, will be out of date by tomorrow. Just as weather changes from day-to-day, and is difficult to predict next week, so are earnings and share valuation. Remember to keep your model up to date.
  • Key Concept 6—Be a Proactive Analyst: A proactive analyst takes risks and adjusts his or her forecast based on the information available. A reactive analyst plays it safe, waits for the subject company to issue results, and potentially revise guidance before going out on a limb with their forecast.
  • Key Concept 7—Own Your Projections: One of the most important things you can do as an analyst, is to hold yourself accountable to your projections. There are many behavioral finance concepts working against analysts. We tend to be overconfident in our ability to predict future results, and often do not fully incorporate new data into our existing projections. We also tend to focus on areas where we are correct in our predictions, and tend to forget the areas where we are wrong. Try to keep your psychological biases in mind as you compare your projections to the reported results of the company you are covering. Celebrate the accurate points in your projections, but recognize when you are wrong. If necessary correct your mistake and move on with your new forecast.
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​Difference Between the Certificate Program and the Textbook

Our Certificate program has been adapted from our textbook “Financial Modeling for Equity Research: A Step-by-Step Guide to Financial Modeling”. Despite the similarities in the text, the two sources are meant to complement one another. The book is intended to provide a basic introduction to modeling, while the Certificate Program provides a more comprehensive approach to prepare those who have decided to pursue a career in modeling. The following list highlights the primary differences between the two sources:
  1. The subject companies selected provide different modeling perspectives. Apple Inc, the subject of the book, is a product-based company which requires inventory analysis, product cycle review, and consideration of the supply chain in the forecasting process. FedEx Corp, the subject of the Certificate Program, is a service-based business which requires a different forecasting thought process, with specific attention to global trade trends, and a changing competitive landscape.  
  2. If you have chosen to pursue the Certificate in Financial Modeling Program, we have assumed that you are dedicated to learning the full scope of financial modeling. As a result, we have removed the option of creating a simplified version of the model which is demonstrated in the book. Instead, the program curriculum begins with the creation of a fully integrated Income Statement, Balance Sheet and Cash Flow Statement.
  3. In the Certificate Program we use video demonstrations of the modeling process, and discuss the important concepts to enforce the topics covered in the curriculum. The Class Wrap-Up quizzes reinforce the most important modeling concepts. 
  4. The Certificate Program requires a demonstration of knowledge through the exam and model submission.

​Thoughts From the Program Developer and Instructor

John Moschella
​I believe that throughout our lives, who we choose to educate us, and what form that education takes, is among the most fundamentally important decision we make. ​​​​Each day we learn more, and are directly influenced by the information we allow into our world: the news channels we watch, the communities we live in, the websites we visit. How you choose to educate yourself is a critical decision in all aspects of your life. Your education in accounting, finance, investments, and financial modeling is no different.To help you decide to what extent Gutenberg Research will be included in your universe of education sources, I have framed my thoughts on earnings modeling, equity valuation, and my professional background, which highlights my own education in shaping the concepts which form the core approach taken in all of our Gutenberg Research programs.
About the Instructor:  I have spent nearly 15 years analyzing companies in various capacities. After earning a BSBA in Finance, MS in Accounting and MBA from Northeastern University, I began my professional career at PricewaterhouseCoopers (PwC) in New York as an Assurance Associate in the Financial Services practice, where I earned a CPA license. During my time at PwC I participated in a rotational assignment within the Financial Service Research Institute at PwC where I studied bank mergers throughout the financial crisis, drawing on my experience as an intern bank examiner with the Federal Deposit Insurance Corporation (FDIC) during my undergraduate career.

​​After PwC, I spent five years at UBS Investment Bank where I worked first as a Capital Specialist, and then as an Equity Research Associate. During this time I became a CFA Charterholder. In my research role I built and maintained earnings models, contributed to research reports, and participated in client conferences, covering the Semiconductor and Semiconductor Capital Equipment Industries. I then moved to General Electric Capital Corp in 2014 as a Risk Analyst where I built regression models to predict asset losses based on various macroeconomic scenarios. After the sale of the majority of GE Capital’s assets, I started a consulting firm which provides capital planning support to banks, in addition to running Gutenberg Research.

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