I think over the last couple of years, I would have conducted 100 of days of workshops concepts involving excel. I love posing the following question to the participants:
Do you know Excel?
I think if I would have asked this question to 1000 participants, I would have got a Yeah! From a minimum 990!
We all use Excel. Most of us use Excel as a data store sometimes to store names of the friends we are inviting for the Halloween Party, sometimes the birthdays of our near and dear and sometimes to store important financial information. Again I thing I found common:
We try to Maximize the Entropy!
We would randomly put data in Excel and finally wish that for sorting information and finding the relevant data we had a Google for Excel!
If you are planning to create a large model, it would always help to get a systematic structure in thoughts and model in Excel. It can help you scale the model and when you come back to it 6 months from today, it still makes sense!
Structure the Template (Shorten Col A, B, Make the Col C wider)
Create sections for different Parts
Once you have the basic template in place, it is time to format. Two things that I like:
Hide the gridlines
Color the constant (Assumptions) Blue and the calculations Black
If you are working in the finance industry, most of the stuff that you do on a day to day basis is quite routine. But you need to make sure that whatever you do, you are perfectly structured. Small mistakes can cost you dearly. In such a scenario, templates play important role. They help you remain on track as far as creating the model is concerned. Most of the good finance firms would have standard templates to build models and the analysts have to follow the same to the dot.
Pristine conducts trainings for financial modeling in Excel, where we help you understand how to build a complete integrated model. The first step in the training is to get a template and follow it to structure information.
Do you also use templates in your models? If yes, why donot you share?
I have created a template for you, where the subheadings are given! You can download the same from here. You can go through the post and try to create the structure on your own. I also recommend that you try to create this structure on your own (so that you get a hang of what information is to be recorded).
If you are planning to build a career in finance, it is absolutely necessary that you understand financial modeling. ABC of financial modeling requires you to structure your thoughts and appropriately express them. In one of the next tutorial
For any queries regarding the concepts or modeling in Excel, feel free to put the comments in the blog or write an email to firstname.lastname@example.org
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