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

1. Financial Modeling Best Practice
in MS Excel Tips
Date: January 2014
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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.
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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.
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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.
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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.
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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