Financial Statement Modeling (2024 Level II CFA® Exam – Learning Module 7)

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Topic 3 – Financial Reporting and Analysis
Module 17 – Financial Statement Modeling
LOS: Compare top-down, bottom-up, and hybrid approaches for developing inputs to equity valuation models.
LOS: Compare “growth relative to GDP growth” and “market growth and market share” approaches to forecasting revenue.
LOS: Evaluate whether economies of scale are present in an industry by analyzing operating margins and sales levels.
LOS: Demonstrate methods to forecasting cost of goods sold and operating expenses.
LOS: Demonstrate methods to forecast non-operating items, financing costs and income taxes
LOS: Describe approaches to balance sheet modeling.
LOS: Demonstrate the development of a sales-based pro forma company model.
LOS: Explain how behavioral factors affect analyst forecasts and recommend remedial actions for analyst biases.
LOS: Explain how competitive factors affect prices and costs.
LOS: Judge the competitive position of a company based on Porter’s five forces analysis.
LOS: Explain how to forecast industry and company sales and costs when they are subject to price inflation or deflation.
LOS: Evaluate the effects of technological developments on demand, selling prices, costs, and margins.
LOS: Explain considerations in the choice of an explicit forecast horizon.
LOS: Explain an analyst’s choices in developing projections beyond the short-term forecast horizon.