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Financial Modelling Best Practice in MS Excel (www.insightfocus.com.au)

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This presentation provides some key points to follow regard to Financial Modelling Best Practice in MS Excel.

You can easily and quickly identify Microsoft Excel Financial Models that have been efficiently designed and built.

In this presentation the slides contain points to take into consideration when building a financial model in MS Excel or what to look out for when a financial modelling spreadsheet is provided to you.

The content of this presentation are also located at
http://www.insightfocus.com.au/articles/excel-financial-modelling-best-practice.php

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Financial Modelling Best Practice in MS Excel (www.insightfocus.com.au)

  1. 1. Financial Modeling Best Practice in MS Excel Tips Date: January 2014 Website: Email: http://www.insightfocus.com.au info@insightfocus.com.au Do not forget to click on the ‘Follow’ button to ensure you do not miss out on future presentations Copyright © 2014 InsightFocus.com.au • All Rights Reserved
  2. 2. Financial Modeling Best Practice Introduction It is easy and very quick to identify Microsoft Excel models that have been efficiently designed and built. On the following slides are some things to take into consideration when building a financial model in MS Excel or what to look out for when a financial modelling spreadsheet is provided to you. Copyright © 2014 InsightFocus.com.au • All Rights Reserved
  3. 3. Financial Modeling Best Practice • Colour code and or format your presentation layer accordingly to highlight a different stages in the progress of the results being rolled up. • Unless absolutely necessary do not use references outside of your Excel spreadsheet. Bring these external spreadsheet references into your spreadsheet as static values and then reference them in your calculations. • Include subtotals with cross checks in your financial Excel model with cross checks to ensure accuracy and the ability to audit the Excel spreadsheet. • A consistent naming convention is used for the name of your worksheets based on their functionality and purpose. Also consider the sequencing of your worksheets and any colour coding that is applied to the worksheet tabs. Copyright © 2014 InsightFocus.com.au • All Rights Reserved
  4. 4. Financial Modeling Best Practice • There is no hard coding of values and that they are linked accordingly through the model. • Every calculated field has a unit label. • Ensure that your cells contain only one formula and avoid using nested formulas in the same cell. • Ensure that all of your worksheets in your workbook are formatted as defined in your style guide. • Summarise your models results in a summary worksheet that allows the people using your model to be able to answer the question(s) that the Excel model was designed and build for. Copyright © 2014 InsightFocus.com.au • All Rights Reserved
  5. 5. Financial Modeling Best Practice • An assumption worksheet exists containing all of the assumptions made in the model. These assumptions need to be documented in plain English including the unit of measure that is being used for them. • Ensure the ability to audit the calculations in your spreadsheet model is transparent and efficient by not creating lengthy formulas in single cells. Your formulas need to cascade and build up in a logical structure manner throughout your model. • The assumptions flow correctly through your worksheet so that your calculations and results are automatically updated. • Ensure that your numbers are correctly formatted and the formatting convention consistent throughout your financial model. Copyright © 2014 InsightFocus.com.au • All Rights Reserved
  6. 6. Thank You Contact us to find out how we can help you achieve financial models that adhere to best practice standards. Do not forget to click on the ‘Follow’ button to ensure you do not miss out on future presentations Website: http://www.insightfocus.com.au Email: info@insightfocus.com.au Copyright © 2014 InsightFocus.com.au • All Rights Reserved

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