 Good morning everybody. Good morning, good afternoon and good evening because we have people from all over the world here, actually recording this from the US. And so how is everybody doing? Welcome to our D Brown Consulting Financial Modeling Series. So this is actually the March episode, it's an error here. So we are ready for the webinar now and everybody could send, you could just type in your chat, type in your comments. I'm going to put a quick poll. I just want to know where everybody is here. So just give me a second, let me quickly put that up. People are still stepping into the room. That's great. All right, great. So I can see that most of us are non-modelers. So 64% of us are non-modelers, 35% of us are financial modelers. So who really is a financial modeler? Really? Who is a financial modeler? Most people don't know that they are already modelers. So what I'll do is I'm just going to play a very short one minute, two minute video that I recorded earlier about who is a financial modeler. So let's just watch that video. So who is a modeler? I'm a financial modeler and I've been building models for deals for quite a long time. Over these years, over these years working as D Brown Consulting, we've basically built up a methodology, detailed methodology on how you build models. How do you consider yourself a modeler? For example, I mean, if someone wants to build a model for a telco or you want to build a model for an oil and gas firm, it doesn't matter what organization or industry it is. As long as you understand the mechanics, as long as you understand how to sit down with the financial control of our example and understand the drivers of this deal, you will be able to build any model. So you're going to build models from scratch in our courses. You build model from scratch, from a blank spreadsheet, all the way to a detailed model with sensitivity analysis, scenario analysis, all the ratios you can think of. DuPont ratios and the likes, detailed analysis that helps management make decisions on whether or not to go in with this deal or whether or not the firm needs to kind of change their strategy, all sorts of decisions are made with your model. And guess what? There's also a certification, an internationally recognized global certification now. Yes, you can get advanced financial modeling certificate and you do the course, you do the course, you get ready for the certificate, you do the international certification and you have your certificate, which is recognized worldwide. So come on over, you could send us an email at training at dbronconsulting.net, we could go to our website dbronconsulting.net or just call us on 0700 training. That's plus 234 700 training or in Nigeria 0700 training. So we're looking forward to seeing you. See you in the next class. Great. So that was just a quick overview of who really is a financial model. Now, one of the key things is for any business really is understanding where they are going as an understanding where they are currently and where they are going. And to understand where they're going, you need models. A lot of what we do in business is we do like a one year model, which is also called a budget. So you did a detailed budget, everybody department sends budget figures. And then we use those figures to kind of plan what's going on next, right? So that's, I mean, we typically do that for, we call that budget, but really it's a model. It's a financial model. Now, the core benefits of a financial model come when you're really using it for strategic planning or you're trying to understand exactly whether or not to go into a new business line and stuff. It's a very big wide field. And for modeling, we're going to talk today about depreciation calculations and some other things related to depreciation calculations. But what I want to come to first is this new certification because I think it's a game changer. I've been modeling for a very long time, but once this certification was started last year, I had to like spend quite a bit of time to talk to these people in the US, it's based in Canada. So it's based in Canada to see how they can bring this certification to Nigeria, because I'm a chartered accountant, management, I do a member of the Institute of Management, member of the Chartered Institute of Taxation, member of CFA Institute, member of so many institutes, I've done so many exams. And what I discover with exams is you do an exam and you, yeah, you read a lot for the exam before you get to the exam. You do the exam. And when you get to work, you're not really using a lot of, you know, you're using everything about what you learned. I don't know if anyone has that feeling, you're not using all the knowledge. I mean, you did accounts, how much of the accounting skills are you really using at work? Does anybody, does anybody have another viewer? Do you agree with me? Is that something you see? Exams are good, but really we use probably 10 or 20% of the knowledge. Am I right? Okay, what percent of the knowledge do you think you use from an exam? Can you type it in the chat? Type what percent of the knowledge you gained in university are you currently using? You did so many exams in university. What percentage of that knowledge are you currently using? Me, I think, 10%. I read accounting. And I like accounting, but really I don't advise anyone to read accounting. I would advise people to read something else and then do a charter. They just do ICANN or do ACC or something like that and get that knowledge. So what I discovered with these guys is FMI, Financial Model Institute, is the exam itself. The exam is working itself because you're building a model from scratch in the exam. You go to the exam, you open your laptop and you actually build a model from scratch. It's a four-hour exam. So you build a model from scratch and once you finish building that model, you have an actual case study and the case study is to mimic something in a real situation in an office. But at the end of the day, if you answer that case study, you must build a model from scratch using best practices. So if you can go to an exam and build a model on a laptop from scratch, then you're a modeler. You know how to build a model. It's clear and it's something you're going to use directly in work. So it's a very modern way of doing an exam and there are three levels, Advanced Financial Modeler, Chartered Financial Modeler, Master Financial Modeler. For Advanced Financial Modeler, you really, let me even quickly go there. So I'm on the website right now. It's FMinstitute.com and the exams are now holding in Nigeria because we've managed to convince our guys there to bring the exams in Nigeria. So the exams to hold for April exam, April exam is on the 28th. It's going to hold in Nigeria on the 28th of April. And for a lucky person here, a couple of lucky people here, if you send, I'm going to tell you how you can win a free exam slot. If you win a free exam slot, it's worth 175,000 Naira. And how many of us here would want to do that exam and also get guidance from us on how you can do the exam? How many of us here would want that? So this is an Advanced Financial Modeler exam. You get the Advanced Financial Modeler certification. You'll be able to put the designation on your name as AFM and you're one of the few in the world that were really probably even the first in Nigeria that I would have it. So how many of us are interested in doing this Advanced Financial Modeler certification? So and this is very, this is very serious. This is real serious business, guys. I'm going to talk about, the topic I'm going to talk about is one of the tiny modules in the in the in the syllabus for the financial modeling level one exams. So what I want to do is let me ask who is really serious about wanting to be an Advanced Financial Modeler. And then I can see how we can assist you in getting in the meeting that meeting or like only becoming an Advanced Financial Modeler. So, so go to the website guys FM Institute.com while we continue talking about the slides for today. And what you should be looking for is level one AFM exams for level one. And just click on AFM and go to candidates, go to certification and then just click on level one directly level one AFM. And you see everything about the level one exams. You see what it is Advanced Financial Modeler, what it covers. So what it really covers is accounting, finance, investment, valuation and Microsoft Excel. These are the four things you need to know if you want to be a financial modeler. You need accounting, you need finance, you need investment skills, valuation skills and Microsoft Excel skills. For the level one, all you really need is intermediate accounting and intermediate finance. And then some advanced Excel. You need to be advanced in Excel. So you wouldn't do investments and valuation topics. You do investment and valuation in level two, which is your chartered financial modeler. And level three, you become a master financial modeler. You need to be advanced in everything. You need to be an expert in accounting, expert in finance, expert in investment, expert in valuation, expert in Microsoft Excel. So again, these are really super certifications. There's a lot of material online and the exams are going to hold in Nigeria on April 28th. The exams are worth about 175,000 and someone here is going to win a free exam. All right. So you're in the right place. Okay. So what's our topic for today? Let's have a look. Okay, great. We're back. Okay. So our topic for today, just okay, just quick brief about me. I'm David, David Brown. I've been modeling for, I'm building using Excel for about 22 years. I'm an ATD master trainer, master instructional designer, and I also model for the World Bank. So I do financial models as an international consultant for the World Bank. And I have a lot of other certifications as well. So that's quick, quick about me. And sponsors are D Brown consulting for this webinar. We do training, consulting and payroll. And for the training, we are the analyst hub. So if you go over to office training hub.com, you get a free course on Excel. If you get a free course on Excel right now, if you go to office training hub.com, if you can't find it, let me know on the chat and someone will send that link to you. Right. And these are the courses we offer in D Brown consulting. And we do Excel. We do office 365 financial analysis, financial modeling, we have plenty of online courses, business intelligence. And of course, we do these free webinars every month. We do an Excel webinar every month. It's actually, we just finish that one. It starts nine to 10 o'clock on the third Thursday of every month. And then we do this one financial modeling webinar. And we do a talent development webinar, which starts at two o'clock today. All right. So that's us. Of course, I mentioned fmi financial modeling Institute, we are actually the approved training providers, one of the few in Africa, probably the very first approved training providers in the whole of Africa for the financial modeling Institute. We also partners to Microsoft. And we are also members of the association for talent development based in the US. Right. These are the free winners you have, you're doing this one currently, we have a meetup group. So how many of us here have joined the meetup group? The meetup group, you get loads of notices of when we're doing live meetups, you get all the invites for this kind of webinar. And then you also get invites for many other things as well, especially invites as a member of our meetup. So go to meetup.com and look for us as financial modeling meetup. If you want the link on this chat, just let me know. I'll post the link on the chat as well. We also have a Power BI and Excel meetup and we have a Pog group. Pog group is Power BI user group. So if you're a Power BI fan and Excel fan, we answer questions there. Just go there. If you have any problem in Power BI or Excel, ask questions on this Power BI user group and then we answer the questions for you. Great. So that's done. Let's just quickly move on to today. Okay. So I'm going to go straight into the file. Let me go to the slide. Let me go straight and share my screen. Hold on a second. I want to go straight into the file and start the demo. So I'm sharing my screen right now. And we are going to do some depreciation calculations. So we're going to do some depreciation calculations. How many of us here do this in a model? Because we have some modelers here already. Can you guys tell me what methodology used to do depreciation calculation? You know, the 30% of us that are modelers. Can you please let me know what, you know, about 35% of us are modelers. So what do you, how do you do depreciation calculations currently? Just type in the chat. Let me type. How do you form depreciation calculations? Type in the chat and then let me know how you perform depreciation calculations. Okay, I was just waiting to wondering what was wrong with the connection just since people are very quiet. So we have depreciation is being calculated based on different methods, straight line, reducing balance method. Yeah, correct Raji. But what do you use? I know most people in the world use straight line. But how do you calculate it in your current model? What formulas do you use? That was my question. What formulas do you use? So I want us to continue the conversation by chatting so that we can, it's important we chat, chat so that from there on we now move on with other things. So if you could chat, there we go. All right. So let's move, let's just look at this. So let's look at, so look at my screen. I'm just going to maximize. There are certain best practices when it comes to building models, right? So if you look at this, this model looks very organized and very neat and tidy. If you're doing the exams, the FMI exam, which is advanced financial modeler, one of the key points that will give you for the exams is how well your model is structured. So I'll just give you a quick overview of your structure. So this is the structure of my model. I have a column here, two columns here. These two columns A and B I used to navigate. So you can see I can hold my control key and my down arrow key and you will see my mouse jumping up and down. So that's how you navigate within the big model. You just have, this can be your header, header, and then this one can be a subheader. You could even have up to three or four of the first columns, very small and narrow like this. And that's for navigation purposes, right? Cool. And then here I have my general assumptions and then I have my KPEX assumptions. So if you want to do depreciation calculations, you need KPEX, KPEX right? So and one of the key aspects of the model, if you want your model to be very functional and very dynamic, you need to know something called counters and masks. Maybe we'll do another webinar on that counters and masks are very key. So counters and masks help automate reporting. So if you look to the right here, I have this thing they're looking at is actually a mask. And if I come here, what is it testing? It's saying money stated in real terms. In real terms, let's say real terms 2015, well, we're in 2018, let's say 2018. So it's a money stated in real terms 2018. And this type 2018 in here, you can see 2018 appearing as green in there. How was this done? All this, what a mask does is it shows true or false, true or false. And when it's false, it's green as red. When it's true, it's green. This is just a conditional format. But typically what you see inside this cell is true or false. Let me just show you that. I do equals to this. What do you have in that cell is false? If I drag to the right, you see that this one is true. And this is why this is showing true because it's green. That's why it's green. So if I change this to 2014, for example, and let's say my month is stated in 2014 terms, you see that true is now here. So having masks and flags and switches and masks and counters is very important to your model because now I can use this in a calculation, which we're going to do very soon. What's a counter? For us, a counter is just counting. You're counting 1, 2, 3, 1, 2, 3, 4, 5, 6. You're counting, for example, I want to know that this is year one. So I'm just going to say equals to self to the left plus 1. So this is how you do a simple counter. Self to the left plus 1, I have 1 in here, and then I drag to the right control R. So again, this counter will be used in other calculations. In a model, best practices is to use these counters, these masks, these flags in calculations. That way, your calculations are easy to audit. Very easy to audit and make sense not to use nested ifs. So counters are key, critical. All right. So here we're going to our inflation index. I'm not going to talk about inflation index, how to build this index. In fact, we have a video on our YouTube channel that explains how you build an inflation index in your model. I think we did a webinar on that some time ago. I'm just scrolling down here to Kpex. So for my Kpex, the thing about Kpex is, or Kpex, you are saying that, okay, I'm going to buy assets. I'm going to buy assets and then depreciate them over a time period. So obviously your assets have to have a useful life. So here, this cell here is an input I have. This is my useful life. I'm saying the useful life is 4. I could change the useful life to 5 if I like, but the whole idea of modeling is you try and reduce the number of activity you do. So if I type 5 in here, it should automatically update my depreciation schedule, right? It should update my depreciation schedule, which we're going to build very soon. Right. So that's it. I'm just going to leave it at 4. And then let's say that our Kpex in real terms in today's money, what is the total? This is basically just a total. This is the summation of all the Kpex. So in a model, it's a good thing to have a total column. This total column sums up all the figures to the right, all the figures in the various years that you're projecting. And that way, this total that you have here will be used as an audit figure. It can be used to trap errors. You do a reconciliation based on that total. So here we're saying we're buying assets 10, 10 million, naira worth of assets, 10 million, 10 million, 10 million, then 20 million, 20 million, 20 million, and it goes on like that, right? So let me just reduce this a bit so you can see more. So these are just my assumptions. These are my assumptions for the assets I'm buying. I mean, I can, I just typed in, right? I can change this to 15, for example. Yeah. Right. Then the next thing is Kpex money of the day. This is today's money. When we say today's money, we mean we are buying an asset for 10 million. And 10 million is what we're putting in today's money. That is 10 million is what the asset will cost us today. And for argument sake, today is 2014. Today is 2014, right? 2014. Now, when you build a model, it's very important that all your assumptions, your fixed amount assumptions in today's money, which means they are based on today's terms. So you just put 10, 10, 10. So this 10 you have here in 2020, for example, this 30. This 30 that I have in 2020, this means that the asset is going to cost us 30 million, but 30 million in today's money. That means 30 million of today, which I will need to buy an asset in 2020. So if this is today's money, then what exactly is it going to be in 2020? So in 2020, it's definitely not going to be 30 million. It's probably going to be like 40 million, right? It's going to be like 40 million. So that is where the inflation index comes. So the inflation index. That inflation index will kind of put this up, inflate this to today's money. So if I come in here, I won't show you how the index works. I'm just going to type create the index inflation rates themselves. So let's just say your annual fixed, where's inflation? Okay. Yeah, here we have inflation. Let's say your fixed inflation percentage is 10%. Right? That's your annual inflation rate. So if my annual inflation rate is 10%, that means, and let's just assume that today's 2014, the formula is one plus my inflation rate, which I can log, raised to the power of time, raised to the power of time. What is the time? Time is that counter that I just did. So the time is this. This is the power of time. So this, this is my inflation rate. So my inflation is this, I'll just say one, raised to the power of time minus one. So it's obviously 10%. Let's scroll right. So if cumulatively, cumulatively, or let's even leave it as the index, let me not remove one. Let's just say cumulatively, whatever it is you're buying, or sorry, this time will be zero. So let me just make this, let me make this zero. This today will be zero. So tomorrow, any asset we buy for the next day is going to be 110%. Then the next asset, if we're buying something worth 10 million a day in this third year, this third year is going to be 121 million a year. So that's what that inflation index does. And I just copy this formula all the way to the right. So this just inflates all my assets based on today's money by the inflation. Now, this whole factor thing, just go online and see a video on our YouTube channel on how to make this dynamic. I'm just not making it dynamic here. So I'm coming here and I'm multiplying the asset itself in today's money. I'm multiplying it by the index, the inflation index, the crude one I just did there. So if I highlight this and copy to the right, you'll see that based on today's money, all the total assets we bought is 300 million. But based on the money of the day, the money that will be spent in those various future years, the total we've spent for KPEX is 609 million. This is something I see that people don't do in models. Before you even do the depreciation calculation, you need to put all the values of what you're buying in today's money and let the model inflate it to the money of the day, to the money in five years time. How many of us do this? And some of our modellers type in the chat, please. How many of us use money of the day calculations? How many of us use money of the day calculations in our model? How many of us do this? Let's say yes, yes, if you do. How many of us use money of the day? Everybody should go to the chat, please, and just type how many of us use money of the day calculations in our model. So it doesn't even have to be a financial model. When you're saying we're going to be spending 20 million era every year to buy cars, your car, especially with Nigeria, with our inflation that has gone over off the roof, your 20 million may not be enough to buy those cars that you wanted in five years time. But does it make sense, guys? Does this make sense that you should always put the assets you're buying in the future in today's money, which means you're putting it based on the value of those assets today, and then in your model you inflate those amounts. So you will need to worry about, oh, how much will it be in 10 years time? Your model has taken care of that. You know it's going to be worth 10 million now, and your model has taken care of the inflation index has now inflated it to whatever that value will be later. But you have to be careful about what percentage, what inflation rates you use. So this is key. So that's the first step. So our next step after this is to now do the calculations for depreciation. And for that, we need a schedule, a depreciation schedule. Schedule, right? We need a depreciation schedule. So let's look at that. So for our depreciation schedule, if you look at mine, I have, it's basically called a base schedule. So for our base schedule lesson is a new company, so I don't have any assets. I'm assuming my company started in 2014. Just to make it easier for everyone to understand, let me just change this 2013 to 2017. And let's say our projections are starting from 2018, right? So it makes more sense for everyone. That's fine. So we're saying that 2017 historically, there was no asset zero. I didn't have any historical assets. These, if you have in your model, especially if you're doing the exams, the advanced financial model exams next month, you need to understand that you're going to do two depreciation or two KPEG schedules. You should do one schedule or you do one schedule for all your new assets, all right? Do one schedule and one depreciation calculation for all your new assets. And then do another one for your old assets. So the assets you already had, the historical assets you had, you can say, okay, you're going to depreciate these ones over three years, over five years, the old assets. But then this is for the new assets. So here, I'm assuming that these are all new assets. I don't have any old assets in my business. And for the first thing in your schedule is beginning balance. Your beginning balance is always equal to what? So I want to type in the chat. I need feedback. What is my beginning balance? It's a very simple question. What's my beginning balance? For those coming in, quite a few people are just coming up. Can you quickly type in the chat? What's your beginning balance? Okay. Yes, beginning balance is zero. Thanks. Since only Austin is talking, where is everybody? Everybody should talk. Somebody say hello. Okay, guys, I want everyone to just say hello. I'm not going to continue. I'm on strike. Hello. Everyone should say hello. Once you say hello, then I'll continue. People are now responding. Good. Someone said, you said, yeah, you said H39. Perfect. You're right. So equals to the sale in H39. Perfect. So what about my KPEX? My KPEX is going to be equal to KPEX addition is equal to what I just did up here. Now, the KPEX addition should not be today's money. It shouldn't be those values you enter based on what the value of those assets are today. It should be your inflated money of the day values. I'm sure I need to do another webinar on this real versus money of the day because this is the money of the day, the money you're going to spend in five years time or the money you're going to spend. So you have to convert your today's values to those values in the future, your projected values in the future. Inflate depreciation, we don't know. That's what we're going to calculate. The net book value or the ending balance is equal to your beginning balance plus your addition minus your depreciation. Now, some of us, we know that something is missing here and it's deliberate. The thing that's missing is you have disposal. But really, in a business, you're not really disposing your assets. You're not in the business to dispose your assets. So you can ignore that in a model. You can really ignore that. I mean, but in a real model, you may want to put that in there, but I really think you can do that calculation elsewhere because you're not selling assets anyway. So that's it. So I can highlight this and highlight to the right and do that our trick, control R, copyright. Great. That's that control R. So then we're now going to do the depreciation calculation. There are two methods I'm going to show you today. This is the offset method at the top. But really, I wanted to start with the schedule method. So let me quickly do the same schedule I did here. I'm going to do it for the second method. I'll start with the second method, not the offset method. So this, sorry, this is equal to this. Just like what we did before, the additions is equal to whatever we have at the top here. And then the net book value will be equal to the beginning valence plus the addition minus the subtraction. And we can highlight this and control R. So the key is depreciation. And this is what people do mostly here. They build a schedule or schedule, right? And they build a schedule and then they ask themselves, okay, we are in 2018, right? What is the depreciation for 2018? Anybody? Let me pretend there is no inflation, right? So let me put inflation at zero. If I put inflation at zero, the figures will be easier to manage. So what is the depreciation for 2018, please? Someone tell me. Tell me in the chat. Depreciation figure for 2018, anybody? Nobody is helping me out. I'm on my own, right? I can't see. Okay, I have a question. Raji says, when an asset reaches the estimated useful life, such an asset can be disposed of. Yes, it can be disposed of. In the books, you have the asset as a zero or salvage value. Typically what we do in a depreciation is we say the depreciation should be equal to the cost minus salvage value divided by the useful life. Here, we're assuming that the salvage value is zero. So your accountant will have that asset. The reason we have the salvage value is just to remember what that asset is. Just to have it in the books that always asset is worth 10 naira in the books. But of course, asset will be worth a bit more. Then when you sell that asset, there's a different set of accounting that you do to get your profit from sale of assets, right? Profit from disposal, which goes into your piano. But we're not going into all of that right now. We're assuming that your assets stay in your company. You don't dispose of it, right? But if you do dispose, you just have another line for your disposal. Then you move the salvage value away from this schedule to another account where you're going to do the calculations for profit, which goes to your piano. We're not going there. My question was 2.5. Good. Austin says 2.5. So yeah, you're right. 2.5. So this is a typical calculation equals to this, where is it? Let's say this guy divided by useful life. Right. Well, this is not really a good way of calculating it. It's not efficient. It's not left to right consistent. One of the golden rules of modeling is left to right consistency. Take note of that, please. Left to right consistency means your formula must be left to right consistent, which means I must be able to do this. What did I do? I just copied from the left and pasted to the right. Now, is this correct? Is the depreciation for 2018 assets? Yeah, it's correct, I think. Not really. If you look at it, this is not correct. And that's because 2018, an asset bought in 2018, this is supposed to be locked, right? But still, I lock this. I lock this so it doesn't move. If you look at the second one, the second one, this asset was not bought in 2018. It was bought in 2019. So this rule here, 2018, means the assets bought in 2018, how long are we going to depreciate it for? We need to depreciate it for four years. So if I do this, you'll see that this is correct for now. I will need to lock this and I'm just only going to lock the rule. Now, if I drag this to the right, you'll see that it's still not correct because the asset, sorry, I need to lock the column. In fact, I lock the column. All right. So again, it shouldn't make sense to lock the column. It's better to bring the KPEX here so that we can walk from this column here. So all these your KPEX values here, see all these KPEX, we need to replicate it here. And then again, this is where some people do it manually. They come here, they come and click this, and then they come here, and then they come and click this. It's not efficient at all. So what you need to do is highlight all the fields and then do a trick in Excel. You do equal to transpose. So just say transpose, and then highlight all the assets to the right like this. So once you highlight like that, close your bracket, then you do control, shift, enter. Control, shift, and enter. Once you do control, shift, and enter, what we're doing here is any all these assets that are listed here are now transposed and can now be listed down here. So for example, if I change this one to 21, you'll see 21 appear here. If I change this one to 33, you see 33 appear here. Can you see that, right? So that's how that works. So let me change this back. Let's copy this to the left. Great. Any questions so far? Any questions, questions before I move on? I really like us to be very interactive. So let's questions, questions, questions before I move on? No questions. All right, cool. I'll put the slides. I'm sure some of us want this. I have some slides, but I'm not really going to go through the slides. I think I'll put the slides for you to use later. If you put it up for you later. Okay. So where were we? Yeah. Hold on a second. I have some small technical issues to solve here. Okay. So if you look at this, we can now say something like this equals to this, our asset here, and I lock my column. I will now divide it by the number of years here, right? Once I do that, and I lock this, this looks a little bit better because now I can copy this to the right all the way and enter. I copy to the right all the way. The only problem is I have 2.5, 2.5, 2.5, but I can also copy this down, right? If I copy it down, it's not really correct, isn't it? See, if I copy right and down, it's just not right. Doesn't make sense, does it? Yeah. This is really supposed to be zero. The problem is this doesn't work. So what people do is they, they break it down in chunks. They say, okay, this is correct for here. And then this is not correct. And then this is correct up to here. This is a manual approach. Please don't do this. This is manual. Please. I want us to confess anyone, does anyone do depreciation like this? This is manual approach that I'm doing right now. Anybody? So yeah, it's the depreciation figure is correct, but the approach is very mechanical. So the approach I want us to use is an automated approach of calculating this cascade. It should automatically work with left to right consistency. And the very first thing you need to do is actually not do the calculation and ask yourself when should the calculations happen? These calculations that are done here is a very simple calculation. It is this asset divided by the useful life. That is your straight line depreciation calculation. The only problem is we need to identify when the calculation should happen. So why are we saying that this cell here? Why are we saying that this cell here is zero? Why? Why are we saying that? Why? So the reason we're saying this cell is zero is because this is 2018. So we need to look at this in context. Why is this cell to the right? Why should this cell to the right be zero? Why should this cell to the left be zero? When you solve that in a model, you will now be able to automate. That's how you automate in a model. So let's solve the first one. Let's solve the empty cell to the left problem and the empty cell to the right problem. So for the empty cell to the left, the reason that this cell, let me just color the cell I'm looking at right now so you see where I am. The reason that this cell should be empty is because this year, this column, the column this year is 2019. But the depreciation we're calculating is for 2020. 2020 doesn't exist in 2019. It only exists in 2020 and after. So the question, the logic we're going to put here is this. We're saying, hey, this year at the top, right? We're going to lock two things. We're locking the row. The only time I want you to work is when you are greater than or equal to, right? Greater than or equal to this year to the left. Does that make sense? Oh, I wrote to me, wrote to me, everything seems strange to you. Slow me down. If things are strange to you, slow me down. So this is a depreciation schedule, right? So this is the logic. This is a very first logic. This first logic traps one error. It says that, hey, the only time you should calculate depreciation in 2020 is obviously on the year 2020 or after. So this would give us a false year. But if I copy this and take it here to give me, take it to the next cell, is it giving me a true? So it's supposed to be true here, but it's supposed to be false here. So this is the first thing we have solved the first problem, which is the first blank issue. So false, anytime we see false, we're going to let it be a blank. That's fine. But this false, if I copy this formula that is trapping things, you know, the only time we should do a calculation is when it is true. That means when the depreciation has happened over four years and the depreciation started in the exact year you wanted it to start and ended in the exact year you wanted it to end. So this asset, whatever this asset is that we bought in 2020, right? Can you see 2020 here? It should start in 2020 and end in 1, 2, 3, 4, end in 2023. We shouldn't have any calculations in 2024 because the asset has been fully depreciated. If I copy this and paste it here, you see it still shows. So we have the problem of wanting to have a false here as well to trap this error from happening. Now, if you see we've trapped the one to the left, you can see if I copy this to the left, it's working fine. Yeah. If I copy this to the right, it is true. So it's supposed to be true here. It's supposed to be true for the second year. It's supposed to be true for the third year. It's supposed to be true for the fourth year, but it's supposed to be false here. And right versus another, this is the problem. It's not showing false here. It's supposed to have been false, but it's not false. If I continue going right, it's not. So this is wrong. This one here is wrong. So this one here is wrong. We need to solve this problem. So that trap that we did doesn't trap. Now, why is it false? The reason it's false is because the only time it should be true is again, we trapped the year before. Now, the year after, we can't depreciate an asset we bought in 2020. We can't depreciate it in 2024 because it has already been fully depreciated. So we're saying that this 2024, we're saying this asset that was bought in 2020, it should only be depreciated in 2020, 2021, 2022, 2023, and 2024. So first of all, we need to put something here that says, hey, you asset. I want to take this year, right? And this year, I'm going to lock after lock the column. I'm going to add the number of useful life. This is where the trick is. I'm adding the useful life to it. And this useful life, I'm locking it. So that will give me 2024, but that's wrong. I will need to remove one year. I need to say minus one. This is going to give me the end of the last year that depreciation should happen. Okay, so in my formula, I'm saying that age 53 this year, plus the useful life minus one. This is the last year depreciation should happen. Then we're going to compare this last year that depreciation should happen. We're comparing it to the year at the top here. We're saying, hey, you this year at the top. This year at the top. We're saying you should lock in the row. You should be less than or equal to this calculation of the last year of depreciation. If you are less than or equal to that last year of depreciation, then it's a valid calculation. You're valid. So you can see that we have two traps. We have a trap that traps the beginning of when your depreciation should happen. So it says false, false, false in the beginning and says true when it should start. But then we need another mask or another logic to stop it from continuing depreciation. So we need to add these two logics together. If you remember the first logic, all the first logic did was say, hey, this year to the left, are you greater than or no, this year at the top, are you greater than or equal to the year at the left? Which means my depreciation can start. This other second one is trapping the end of your depreciation. So what you do is you combine these two with the end function. So the end function will combine these two logics because we need the two logics to happen. So the first logic, which was the same this year here, all right, this year here, don't worry guys, this looks all complex. When I show you the second method is far more easier than this. This is the old school method, which to me is nice, but I prefer the other method. We'll just hold on for the other method. So here we're saying, hey, I want to know when to start this depreciation. And this depreciation should only start when this forecast year is greater than or equal to the year we're depreciating to the left. You can see these are the two logical formulas. So this is the logic that makes things happen. Now let me show you why it's so magical. When I copy this logic now, I'm going to copy it and paste it all everywhere in the entire schedule or shadow. And let's have a look at the logic. Now look at this logic. It looks very funny, but really, this is the main trick about how you build models that are dynamic. So if you see this logic, you have your true. You can see true, true, true like this. You can see false here, and then true, true, true like this, so that you can see how it goes. Let me make this ones and zeros. If I make it ones and zeros, you know, true is one. If I multiply everything by one, you will see ones and zeros. Where you have true, you will see one. Where you have false, you see zero. Make it easier for you to understand. Now look at that. So all these tricks is just conditional formatting I did. So say if there is zero, make it yellow or something, and if there is one, make it another color. So you can see one, one, one, one. This is true, true, true, true. And because both are set in 2018, is depreciating 2018, 2019, 2020, 2021. Then here again, we have true, true, true, true. True, true, true, true. Then because our true is working, this is our mask is working, all we now need to do is multiply these truths and falses by the amount of depreciation you need, which is multiplied by the Kpex amount, right, divided by number of years. So look at my formula there. My Kpex amount is a column constant, which means I'm locking the column, divided by the number of years. Now if your Kpex amount obviously would have removed salvage value from there, if you have salvage value. Right. Now when I enter, you see a depreciation value, I copy and I left to right consistency, I pick the whole thing is left to right consistent. And this is your dynamic depreciation schedule. It works perfectly dynamically. All right. And you can see it's perfect. Everything just works perfectly. You don't ever need to touch the schedule anymore. Even if I come here and change this to five years, the depreciation is over five years, right? You see the schedule updates, depreciation is over two years. See the schedule just automatically updates perfectly. Can you see that? Nice. Now that we have this schedule, all we need to do is come up here and say depreciation is equal to, first of all, obviously we need to sum up all this depreciation for the year. It's already done. So right down here, I've summed up all the depreciation, summed it up. Then this summed depreciation is what I'm now going to link here, equals to the depreciation here. Then I'm going to highlight this to the right. Okay. There we go. Now, how was that? Did everybody, did this make sense? Did this make sense to everybody? People are not talking. I have quite a number, quite a lot of people on this webinar. Now, people are going to give me feedback, feedback, feedback. Does this make sense? Now, who is ready for the offset? Who wants to know how to do this whole thing using the more powerful offset function? Okay. Okay. Nobody wants the offset. So I'm not doing it. The offset. Now, for those that want to know how offset works, I want you to go to our YouTube channel. So let me show you, let me show you the YouTube channel. Let me just, let me just quickly do that for you. Let me open our YouTube channel. Okay. So hold on a second. I'm just going to open our YouTube channel and show you where you can go and find all the goodies about offset. Okay. So in the screen without our YouTube channel, if you go to YouTube, right, just come to YouTube and type into the search, just type dbrown consulting. So if you just type dbrown consulting, you'll see us. You just click it and then take it to our channel. And we have almost a hundred videos. I think over a hundred videos on this channel and with all sorts of very free stuff. Everything is free, obviously, in the channel. This is the video you watched just recently, just now. So you could come in here, for example, I'm going to the search and type depreciation. When you come to the channel, please click on the subscribe button so that you get notifications for all our new videos. Depreciation, type depreciation and enter. Let me see. What comes up? Exactly. So can you see that? Excel tutorial, master the Excel offset function for depreciation and other advanced uses. Can you see that? So this is exactly what I wanted to show you. So I'm not going to show you the offset. I'll just tell you about offset. You can go there right now and watch this, right? So instead of showing you that which I've already done, it's easy to just type depreciation and go there and watch it. Just go type depreciation. You could type most things, I mean, anything, right? Say another one here, Excel hack. What's that? 8 videos. So this is a series, 8 video series playlist. You can go to our playlists. We have various playlists. I think we have a playlist for Power BI, Excel webinars, a playlist for financial modeling, a playlist for reconciliation and that. Now, I want to get back to offset. Let me show you that briefly. Offset is a very wonderful function. In fact, I think you should type offset. The first thing you should do, maybe you would explain offset issue in the search type offset. I did a video that explains offsets very well. I don't think I can explain it better than what I did in that video. So I think it's also still in this video for depreciation. So if you watch that, you see how to use offset. Many people confuse offset. They don't really know how to use offset function. That video will give you in detail how to use it. So pop by there. I'll just jump straight back to this. Now, I want to know who is serious really about becoming an advanced financial modeler because I'm passionate about creating or making or helping people become modelers. And it's something that I see is lacking in most organizations. And I can tell you something for free. If you're a good modeler, your salary will increase significantly because the skills are needed are so, so, so, so needed. And modeling is a very interesting topic because it cuts across every organization. I mean, look at the accounting. They are an accountant, a tutorial asset management budget and forecasting credit and credit and equity research and financial treasury and insurance investment banking operations risk management venture capital. Most people that that's where most people most people in these industries require financial modeling skills, but at a different level. But I think everybody needs at least the level one, which is advanced financial modeler. Once you do the exams, your name is going to be listed on this directory. So these are advanced advanced financial modelers worldwide. So a lot of them are mostly CFA charter holders and mostly chartered accountants. Most people that do this exam, but you don't need to know accounting too well to do level one. Don't worry about that. Yeah, we'll guide you through the process. So what we have in D Brown Consulting is we have a couple of free slots. Let me tell you how we are going to win. If you want to know how you're going to win that free slot, the exam is about 175,000 Naira. Let me show you where that is. So I want to tell you how you're going to win the free slot. So if you're interested, put your hands up, say yes. So exams, these are the exams, the exams are happening. As we said, it's going to happen in Nigeria. So the exams April 28th and don't worry if we don't have any modeling skills, you will get those modeling skills before you do the exams. It's not something that I know you can do. You need 100 hours of study which we'll guide you with. Now, who is going to win this? Let's see. Let me show you the exam cost in Nigeria. So Nigeria, we have Lagos. Where's Lagos? Okay, Lagos, Nigeria. So you can see that the exam is actually 170,000 Naira. Currently, if you register before the 24th of March, you can get it for 129,000. Remember how the exam runs. The exam is for four hours. You come to the exam hall, you see a laptop, you'll be told to build a model from scratch based on a case study. So you build your model with a blank spreadsheet from scratch and once you finish building that detail model that answers that question in the case study, you must have your P&L balance sheet, cash flow, inputs, assumptions, calculations, this depreciation that I just showed you, all that. And then that's it. But then you do that for three and a half hours. And then for 30 minutes, you answer some objective questions, some objectives. So objectives will cover all the other aspects that the exam didn't cover. So that's how you do four hours. Then, of course, you get your results probably eight weeks or six weeks after. So that's the exam. So for winning our three slots, what I need you to do is this. Send an email to training at dbrownconsulting.net. Let me type that in the chat. Training. So training at dbrownconsulting.net. So what I want you to do is send an email. Oh, did I spell that right? Let me see. Oh, sorry, I didn't spell that right. Ignore, ignore, ignore. It's training at dbrownconsulting.net. Okay. So send an email to training at dbrownconsulting.net. And what you need to send is tell us exactly why you should be given this free exam slot, because we want to give someone that's really serious about passing the exam. So tell us, send us an email and say why we should give you that free slot. Explain, and before you can send an email, you need to have gone to this website, go and check the syllabus, check everything, understand what is required of you, because all the content is there. The exam, a sample exam and everything is all there. So go there, check and then tell us why you think we should give you that free slot. So it's like a small essay. Be very serious about it, but send this to us, please, before Tuesday next, the deadline, let me just give you the deadline. The deadline is Tuesday next week. Tuesday next week. So that line is to the next, send us a detail, tell us why you think we should, you should do this. What I'm saying, why, why we should give you the free exam slot, $170,000 to do the exam and also guidance, because we'll give you guidance as well. Also guidance. Send us that detail. Now for everybody else, for those that probably couldn't get this, we have a course that we're launching in April. Now I want you guys to go over, let me go over to let me, let me quickly go over to our office training hub. So you'll see office training hub, by the way, is our e-learning platform. That's where I said you get a free, free training, get free training on, where are we? Okay. Okay. Sorry about that. What's happening here? Let's see. All right, cool. So I said the office training hub, this is our e-learning platform and we have a course in March. In fact, we have a course on the 26th of March that prepares you fully for these exams that are coming up next year. And if it prepares you for the exams that are coming up next month, sorry, on the 28th. So you can go there right now and see a pre-course because there's some free videos there. I'll advise you to go there right now. So there's a pre-course called, let me go to the page. So let me give you guys a link. It's good, at least you can go there and get the free videos that are there because there's some free videos. There's a course called Advanced Financial Modular Online Pre-Course. It's about $300 worth, but at least there's some free videos there. So you can go and enjoy the free videos without paying anything. So let me give you that. So this pre-course is going to prepare you for our full course or full five-day course on the 26th of March to the end of March that will prepare you for the exams for FMI, which is coming up next month. And of course, I will prepare the person for the exams that whoever is going to win this prize. So whoever is going to win this prize, I'm not saying you attend the course, but at least we'll probably give you a lot of online resources and stuff that you can get ready to do the exam. And if you do win the prize, we'll probably give you a 50% discount on the course as well, but that's fine. So please send an email to trainingadibranconsulting.net. And once you do that, by Tuesday, we're going to review all the emails and see who qualifies to win this prize of $175,000 worth of exam. And you'll be probably the first Nigerian in the world to have advanced financial modulus certification. And I can show you, it is a huge, huge thing. It will improve your skills. It will improve your employability tremendously. All right. So hope that's good. And yeah, so you're going to write an essay on why you should get the free slot. And I'll give you the clue. The clue for the essay is go to fmi's website. Understand level one very well. Understand what is required of you in level one. Once you understand what is required of you in level one, then let us know what are the skillset you currently have that you think you can pass, because we only want to give people that have the high potential of passing. So tell us what your plan is for passing the exam. And if you're convincing, we'll give you a free slot, right? So come to here. There's so much material on level one to download. You could go and download all that material on your own. All right. So let me share with you one last thing before we go. Let's see if I can have polls out, set my poll. Of course, I mean, I'm just, I just had another poll asking, okay, so who is interested in who would like to win a free exam slot for the advanced financial model classification? Yeah, I just asked a question. So I have a poll up for you guys. Just answer the poll. Okay. So answer the poll. It's not, don't be scared about the exam. I think it's such a cool exam and it doesn't really need too much skill. They think the skill that needs the most is Excel skills. The accounting and finance side is not complex at all. It's not complex. It starts from level two. It's level two that the finance and accounting get a little bit more complex. And then there's some investment and valuation. There's no investment and valuation level one. You just know how to build the skills you learn in level one. You can build any budget model. You can confidently answer questions, do sensitivity analysis, scenario analysis, you have to link your piano ball and sheets and cash flow and stuff like that, best practices, structure and stuff. So I can see 67% of us here want to win that financial modeling, financial model exam. That's good. So send us that email with why, why we should choose you for the free slot. A couple of us prefer the course. For those that prefer the course, let me also give you another something. Let me give you something. I think we gave this to our guys last month, the people that joined the group. But before I do that, I want to ask how many of us have joined the Meetup group? How many of us here have joined the financial modeling Meetup group? If you haven't, I have a link for you there. You can just click on the link to take you on another page to join our financial modeling group. And please share this group with other people. There are many people that want this skill, that need this financial modeling skill, and they will have access to this webinar as if they joined the group. And for you guys, we usually just send this to only our clients and people on our group. So just share. It's good to share. Right? So once you just click on that button to join us, to take you straight to the group and then you can see join or something. Right? Okay. Excellent. So how many of us have clicked? Are we done? So I can move on to the next one. Okay, so I'm moving on to the next thing. And the next thing here is I'll just give you, let me remove this offer. I'll give you, I already gave the guys last month. I think we'll try and I'll try and make this a bit more. So again, we gave people last month this offer. I think we can extend it. I'll talk to our guys to extend the offer to you guys as well. So if you're interested in one of our flagship courses, the flagship course is making you a master in reporting in Excel. So, but again, I'll give you a secret, right? This is a very high advanced course, but you could do a free course, could do a free course on our platform. We have a free course on our platform in Excel, which is an excellent one five day course. So just look at five day course in Excel. If you're giving you 15 minutes or 10 minutes of video every day for five days, and then you finish the course, very excellent course. You will learn stuff you never knew in Excel. Yeah. So those are the quick offers. We'll send you an email of the actual financial modeling training we're doing on the 26th. This is a very detailed training that includes this pre-course. So you know, I told you there's a pre-course. This is the pre-course you have on the screen. So what the pre-course does, it gives you a lot of material on different topics, building financial modeling template, working with maths and rounding functions in Excel, working with texts and dates and time, mastering lookup, performing scenarios and sensitivity analysis, building KPEX depreciation schedules, time value of money calculations, integrity, error checking, using logical formulas and bonus materials. All these you need to do before you attend the course on the 26th. All right. So you guys anyway, see free. That means you can watch those videos now without paying anything. So you could do that. All right. So if you have any questions for me, please type them out. If you want to talk or chat, put your hand up and I'll open your mic because we're actually done with the webinar for this month. As I told you the offset, you can go to our YouTube channel and watch how to do what I did using calculations for depreciation, how to use the offset method. We already recorded a video for that on our YouTube channel and you can watch that and then subscribe to our YouTube channel as well. Right. So any questions for me? Okay. I can see questions. So I just have any time for any short questions before I close the webinar. Let me give you a link to that offset which is already on our YouTube channel. So put that link for you guys. Let me see share link. Okay. I'm just looking out for any questions you guys may have before we move on. All right. No questions. Where's the link to join the meetup? Okay. Let me do that. The link to join the meetup. Let me add that for you. So that's the link to join the meetup. We also have an Excel meetup. So if you want to join that one as well is also good. Excel and Power BI Meetup. You can join that. Orlala, you said, can you apply for the slot even though you have registered? Oh, you've registered for the exams already. Then you've registered already. So you've paid. This is for people that haven't registered. But I don't know if you're doing our course. We could probably give you a discount to give you a good discount on our course. If you send me an email, they tell us you've registered and you'd like to attend the course, which should be able to give you a very good discount on the course. Please, where can we check for the syllabus? For the syllabus, if you go to the website, let me do that. If you go to, where are we? If I go to FMIs website and then I come to, but if you join our course, you'll be able to download all the syllabus, the syllabi, level one. If I click on level one, so I clicked on level one, I scroll down. Once you scroll down, you see material, learning material. So you have, add the advanced financial model is the explanation to your CV and resume. Find out more about the learning materials. So if I click on learning materials, by the way, scroll down here, you can see all the, all the other stuff. But if I click on learning materials here, you would see all sorts of learning materials for you for free. The learning materials for level one is this, you see the mapping of what you need to learn, what you need to read. You will see the download section here where you can download your body of knowledge. So this is the body of knowledge for financial modeling for level one. You can download the skills download skills checklist. You can download that as well. Level two starts in April. Those are for people that are past level one sample exam. You can download study guide. You can download. And that's it. And then they have some recommended books that have a list of recommended books. So you need to do all of this and then tell us in detail send us by Tuesday why after you've digested all these free downloads, let me just copy this link for you guys right now. Download all of this. You understand exactly what the exams entail. And remember also how to take the exams is a four hour exam, three and a half hours of building the model from scratch with the laptop. And then which you need to follow all the best practices that you see under this body of knowledge. And then you have 30 minutes of objectives. So thank you very much everybody. I hope you enjoyed this session. And of course you can go on online and get the other session as well. Take advantage of all our promos. Take advantage of all our free videos about 100 videos on YouTube. Take advantage of the course itself, which also has some free free sections. You can just take advantage of those three sections and see if this is what you want. If this is a course for you. And we'll also see you online on the Meetup group and all. So thank you very much everybody and bye bye.