What is PFM?

Professional Financial Modeller (PFM) is professional certification program which awards PFM designation for those who have attended preparation class and pass a single level exam. The curriculum covers the field of financial model, which deals with predicting the future of financial condition of a company or project and to conduct thorough analysis on them.

PFM program is aimed at professionals dealing with development, maintenance and analysis of financial model and also individuals who want to embark career in financial sector. In order to sit in PFM Examination, participant must attend preparation program held by licensed training providers authorized to deliver PFM Program. The program is currently available as class room program in several countries.

The program consists of two components:

  1. Preparation program
  2. International examination

PFM preparation and examination is a highly interactive program designed to deliver practical understanding on effective financial modelling. The program covers many subject areas and and through real-life case studies, the emphasis will be on practical approaches.

PFM Curriculum embeds new concepts and models which are not delivered in other modelling classes where some concepts are proprietary to PFM Program.

PFM has adopted Sustainable Financial Modelling principles to ensure that a model developed has reasonable and adequate basis on model preparation process with emphasis on model reasonableness in the long run.

Why Joining PFM Program?

The main benefit of taking PFM program is the thoroughness of the program and the relatively short preparation period needed before participant can join PFM Examination. PFM program covers all the knowledge needed in order to have proficiency in financial model development and analysis. The curriculum also covers state of the art techniques not found in other financial model trainings. All delivered in just several full day sessions.

Most of all, after taking preparation program, participant can sit in international examination which enables the participant to obtain PFM Designation behind his/her name. The Designation is an international Designation, which means it is valid worldwide. Until now the examination is still a single level examination which means the Candidate can obtain the designation in relatively short period.

The set up and development of PFM certification program has undergone rigorous process over the years and PFM Designation only can be obtained through passing the examination. That process ensures that the holders gain additional credibility within financial profession and trust from employer and client.

Participants does not need to have former experience in functions related to financial modelling. As long as a Candidate fulfills some basic requirements, he/she is eligible for enrolling in PFM Program.

The examination itself is designed to enhance learning process, as it is proven that the retention rate of participants who take training and examination has been much higher than those who merely attend training.

The program itself is continuously developed by including newly invented techniques not available elsewhere.

Benefits of taking PFM Program

PFM Program provides some notable benefits to Candidates:

  • PFM Curriculum employs methods which will improve prediction and valuation quality
  • Applicable to most industries
  • The rigorous exam ensures that the participant knowledge retention rate will be much higher than non exam training. The exam also ensures that the designation holder already meets a certain standard. This is the key benefit obtained by companies who send their people to take PFM program.
  • Full of spreadsheet based practice to ensure that the curriculum can be applied in real life situation.
  • Participants who pass exam will be awarded Professional Financial Modeller (PFM) international designation.
  • Access to financial modelling community.
  • There will be no modelling software or third party service used or promoted.

Focus on core modelling skill

The Structure of PFM Program

PFM Program is a full package of Preparation Program and Examination. Currently, the preparation program and examination is available as offline (or called Onsite) program. Online program is under development to enable access by participants from any countries. The program is administered by International Financial Modelling Institute (IFMI).

IFMI, as administrator, has the authority to determine the curriculum of PFM Program including the Body of Knowledge (BOK), determine policy, administer PFM Examination, determine ethics policy, and manage members. By standard, IFMI cannot administer preparation programs to avoid conflict of interest. As such, IFMI appoints Licensed Training Providers to conduct the preparation program and register examination candidate to IFMI for specific country or region.

In order to attend PFM Examination, a candidate must sit in PFM Preparation class. PFM Preparation class is available as public lass and inhouse class. Number of delivery days will depend on discretion of local provider by considering several factor including the level of knowledge of the participants. The default delivery day for public class for practitioner or intermediate to advanced participants is 4 days.

PFM Examination may be taken after participant has attended preparation program which may take 5 days or more depending on the setting of the preparation program conducted by Licensed Training Provider.

Participants will sit on a whole day examination, in which participants will face two sets of exam: Multiple Choice and Computer Practice Exam. In order to obtain PFM Designation, a participant must pass both two exam modules. Should a candidate fails on one or more of the module, he/she is given three chances to attend examination only on the module he/she fails for three times without the need to attend retraining.

PFM CURRICULUM

PFM preparation and examination is a highly interactive program designed to deliver practical understanding on effective financial modelling. 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 modelling classes where some concepts are proprietary to PFM Program.

Main goal of PFM Program is to transform the field of financial modelling 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 Modelling 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:

  1. 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.
  2. Financial Projection: preparing future financial statements of a company. Covers complex topics such as modelling production and trading Cost of Goods Sold and Inventories, Modelling projects with Interest During Construction, Modelling FX Gain Loss, Continuous Capex and Continuous Loans, Modelling Intangibles, Estimating Working Capital. Discuss about consolidation on the projection of a group of companies.
  3. 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.

  1. 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.
  2. Project Modelling 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:

  1. Multiple Choice Exam
  2. 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 modelling classes elsewhere are also part of the curriculum,
such as:

  1. Discounted Cash Flow and other discounted based valuation models by using multiple interest rates
  2. Conducting NPV and other feasibility analyses by using multiple discount rates
  3. Modelling Delta ratios
  4. Equity Duration, Cross Duration Matrix and Assumption Sensitivity risk analysis
  5. Company and project valuation connectivity with other asset classes (bonds, forex, derivatives) by using financial model
  6. NPV Resurface and NPV sensitivity to measure the risk of project demise

Certification Scheme

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