Financial Modelling Articles

The Balance Sheet can be one of the trickiest financial statements to model, as several line items are the result of decisions you make for the other financial statements. Most importantly, getting your balance sheet to balance (and stay balanced!) can be quite a challenge.

Here are a few tips to help you master the balance sheet:

Excel is the backbone to any custom built financial model, and one of the core attributes of a financial modeller is to have good technical Excel skills.  When struggling with their financial models, some managers’ first reaction is to send their staff on an advanced Excel course to improve their modelling skills.  However, with training budgets under constant scrutiny you really need to make sure that you get the best value out of your training options.

When creating a financial model, there are always multiple ways to write a formula which will all give you the same result.  The key is to write formulas intelligently so they are easily deciphered by yourself at a later date, or by another party reviewing your model.  As well, writing a formula one way may cause problems for your model at a future date when you start inserting rows and columns, and expecting the new data to automatically be included in calculations. 

The online world is truly an amazing resource - particularly when it comes to finding specialist information on “how to” to do practically anything.  This is particularly the case for commonly used software such as Excel, and the closely related specialist area of Financial Modelling.  No longer do we need to sit through hours of mostly irrelevant Excel training courses which show us how to use formulas you may never need.  Research shows that people learn better by doing, and many of the answers we need are only a Google-search away.