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May 23, 2019

Lifting the lid on the big 4 corporate finance teams – financial modelling

Navigating the various teams under the “Corporate Finance” (AKA Deals, Deals Advisory or Transaction Advisory) umbrella within Big 4 Chartered Accounting firms can be challenging.

Knowing what each of these teams can and can’t offer you in terms of your future Corporate Finance career and professional skills development might be the difference between securing your dream job or being overlooked time and time again.

In the fifth of a series of articles focusing on the various “Corporate Finance” teams within a Chartered Accounting firm, Numbers Executive endeavours to explain the pros and cons of working in the “Financial Modelling” line of service (AKA Deals Modelling or Business Modelling”).

Our insights are based entirely on Numbers Executive’s precedent experiences and we caveat that our views represent common outcomes we have seen. As with everything, there can be outliers..

The Elevator Pitch:

Financial Modelling teams generally provide two core offerings, being the provision of:

1. Financial Model Build (AKA Development) Services, which involves the development of bespoke, robust and flexible excel-based financial models, that are provided to clients to use and make informed decisions from with regard to (inter alia) :

Whilst other corporate finance teams develop financial models to support a broader process (such as building a valuation model to support a valuation within an Information Memorandum within an M&A team), specialist financial modelling teams develop models AS THE SERVICE (i.e. The financial model is the product, not any broader advice).

2. Financial Model Audit (AKA Review) Services, which involves a highly detailed, highly technical cell-by-cell review of an external party’s excel-based financial model in order to provide assurance that calculations are accurate, model-logic is sound and that it can be relied upon as a basis to make significant investment decisions.

What’s great about it:

Model Build :

Model Audit

What’s to be conscious of:

Most common future employment outcomes (with only this skillset):

Our advice to Financial Modelling professionals wanting to move into Investment Banking, Corporate Development or Private Equity

Financial Modelling teams offer professionals the opportunity to cover a lot of ground over all sectors, business types and for a variety of financial outcomes. The mandates you undertake will often shape your future employability, hence it’s important to focus on your long term career goals and do your best to be involved in the mandates you think will support these (and keep you interested).

Furthermore, Stay Curious and continue to think about the commercial aspects of the underlying asset you’re building a model for (or reviewing). Is this a good investment? Why is it being structured like this from a tax perspective? Is the discount rate applied correct? Are the forecasts realistic? How is the sector performing as a whole?

As with all teams, further studies such as the CFA designation, a Master of Applied Finance or Diploma of Chartered Accounting will demonstrate your technical capability.

About the author

Nicolas is a Co-Founder and Director of Numbers Executive Recruitment. He has ~20 years of experience spanning Accounting, Corporate Finance and Executive Search & Recruitment.