It’s never been more important for business professionals to have the skills to build robust, flexible and dynamic forecast models. Using in-built standard Excel tools, we explore how to predict business outcomes and handle the volatile economic inputs we see in these uncertain times. Understanding the inputs, assumptions and drivers and the best way to incorporate them into forecast models is critical for accurate forward planning. We also discuss the best ways to deal with the unknown and evaluate several different forecasting techniques to perform analysis in Excel models. (more…)
Have you ever built a perfect financial model without any errors? Thought not! And for that reason, all good modellers know they need to include some error checks. But what is not as clear is how many error checks you should have, when you should include them and what form they should take. Excel “helpfully” provided us with functions like ISERR, ISERROR and IFERROR but as you progress your modelling journey you should learn to avoid these functions. Plus, you also learn the sad truth that Excel can’t even do basic maths sometimes! (more…)
Ever been guilty of using Excel as a fancy calculator? If so, you’d just be using a formula in Excel. If you entered a calculation such as =A1+A2 or =452*12, then that’s just a formula. If a formula is all you need, then that’s fine. But Excel can do so much more!
You may hear the two words function and formula used interchangeably, but they’re not technically the same. So, what’s the difference? A formula is an expression that uses cell references or hard-coded numbers to calculate the value of a cell. Sometimes a simple formula is all you need to get the right answer, but you can do so much more using functions.
With the huge amount of data available to us every day, a well-built and visually appealing dashboard is one of the best ways to interpret and communicate large quantities of information. Learn to quickly and effectively communicate the results of your analysis to be easily interpreted and understood by others at a glance. Hear from Excel modelling specialist, Danielle Stein Fairhurst as she provides an introduction to her popular online workshop “Dashboard Reporting in Modern Excel”. (more…)
Dynamic Arrays in Microsoft 365 Excel have fundamentally changed the way we use Excel for financial modelling. A single cell formula may return several values and they all spill across and/or down the grid. Financial modellers can benefit by using dynamic arrays to offer more business insights with fewer formulae than ever before. (more…)
There’s nothing quite like experience to really hone and sharpen your Excel modelling skills. Every hour that you spend nutting through a problem on the job means that the next time you come across a similar problem, you’ll solve it in a matter of minutes, not hours. This is especially true for creating complicated Excel formulas, or for model design and layout. So often I come across a problem when building a modelling solution for a client and I know I’ve seen this problem before. Whilst it might have taken me half an hour to model it out the first time, often using trial and error but the next time it’ll only take a few minutes. The more experience you’ve got, the quicker and better modeller you’ll be.
Financial models often follow a similar format, but their design, build, layout, drivers and assumptions will be entirely different depending the sector or function for which they will be used. For example, a modeller working in Mergers & Acquisitions will build a model quite differently to a FP&A professional, and a Project Finance Business Case will look very different to Tech startup model.
When embarking upon the budget process for your organisation this year, practical Microsoft Excel tools and strong financial modelling skills will be critical for managing the budget process. Historically, the budget process involves pulling out the financials and rolling them forward, but last year’s actuals can no longer be an automatic target.
I’m often asked what degree of skill level one needs to be able to include financial modelling as a skill on your resume or LinkedIn profile. Once you’ve got an idea of exactly what is financial modelling, what is involved in the modelling process and you feel like you’ve got a good knowledge of financial modelling skills that you have used in the workplace then – yes – “Financial modelling” definitely needs to go on your resume and on LinkedIn. (Hint: no one can endorse you for a skill unless you list it on your profile, so be sure to keep your skills listing up to date).
Traditional management accounting has always had its challenges and the COVID pandemic has made its shortfalls even more apparent. We find ourselves with forecasts and budgets that were not realistic, and we have learnt that organisations must be agile to survive.