What’s in this lesson

The exercise above is from Module 2 Lesson 2; the video is Lesson 2.1, the step-by-step solution. By the time you reach Module 2 in the full course, you’ve already worked through the financial-statement-analysis foundation in Module 1, so you start the revenue projection with the right groundwork.

What the lesson covers

• Linking revenue to the projected P&L. The revenue forecast you built earlier in Module 2 feeds the top line of the projection; operating expenses build off it.
• Operating-expense projection. Splitting cost lines that scale with revenue vs. those that are flat. The judgement calls a generalist modeling course skips for REITs specifically.
• The fair-value adjustment line. Where it lives, why it’s non-cash, and how to model it so it doesn’t distort projected operating income across years.
• Linking through to FFO. The clean P&L projection terminates in FFO — the metric REIT analysts actually use. You’ll see the bridge constructed.

What this looks like in the full course

This is the second Excel exercise in Module 2 — the capstone of the income-statement build. By this point in the full course you’ve built revenue, operating expenses, the fair-value adjustment, and the FFO bridge. The next lessons in Module 3 cover the balance sheet roll-forward.

What students said about the modeling approach

“Especially the written course materials were very useful. Together with the Excel assignments the course gives you a good basis for building models more or less independently.” — Katrin Kandlbinder · University of Regensburg

“The course offered direct insights into how Financial Analysts in the Real Estate industry think and model. The on-the-job training with concrete annual reports of ‘real’ companies made the course especially worthwhile.” — Daniel Wurstbauer · IREBS / University of Regensburg