It has been a while since my last update, as you know this website is a side project and lately work has kept me quite busy. More updates will be coming in the next few weeks/months but in the meantime I wanted to share with you an example of my work. I have recently published a research paper on the pricing of partially guaranteed bonds (a product that the World Bank is rolling out), the paper was published on the World Bank website with the supporting financial model.
Even though the topic is very specific, you can download the financial model to see how I apply all the best practices of this website to design a financial model. I hope you will find this useful.
A financial model is always in motion (and should be designed as such), assumptions keeps changing all the time, the coding is optimized, new scenarios are added and you quickly end up with tens or hundreds of versions of your model just after a few weeks.
Then your boss asks you what the latest numbers look like. So you print out a few tables and graphs for him and suddenly he takes from his drawer the same tables and charts that you had printed out a few weeks earlier, but of course the numbers have changed. The NPV which used to be $452m is now $312m. "What happened?!" he then should logically ask you, and if at this point you had forgotten to add a changelog in your model, the next few minutes might not be the best of your life as you would likely struggle to explain precisely what changed since the previous version...
This is why a changelog is absolutely needed in every single model, with it you can explain in detail any change in the results of your model. But you have to be ver...
Sometimes you receive entires spreadsheets with (hardcoded) numbers that you wish were expressed in millions but instead are expressed in thousands (or worse, in full), this makes the tables hard to read and more confusing.
There is however a way to perform 1 of the 4 basic operations to a whole table or set of data, it just takes seconds and it can instantly convert numbers from thousands to millions (or the opposite).
This new tutorial is available in the Excel Tricks section, you can find it here.
What if you could save a lot of time spent running countless scenarios and sensitivities when Excel could actually do it for you with the help of a smart macro? This is what the new tutorial released today will teach you do.
When you have only two variables that you want to change, it is easy you can just use a data table when you want to run several scenarios (see here), but when you have complete sets of assumptions that you want to test you cannot do so, you have to run them manually one by one... unless VBA can help you do so. What the tutorial will show you is how to tell Excel to run a repetitive task until all the scenarios have been run.
I have added a new trick in the Excel tricks section. You can now learn how to create dynamic titles that will be updated automatically when you change inputs and/or outputs of the model. This is particularly useful when you run several scenarios and you want the title of your graph to change when you select a different scenario.
The last category that was not open yet is now! Without any prior knowledge of Visual Basic coding you can now create simple macros that will calculate interests during construction or any other financing costs for you. These macros are the solution to circular references that you should ban from your models. In this section you can also learn how to automate repetitive taks such as running Goal Seek with the creation of a button that will make the whole process seamless for the user.
One week after the launch of the Financial Modeling Academy the first update has arrived! You can go to the "More Excel tricks" section to learn additional tricks to save time and make your models more user friendly.
In this section you will learn how to add spin buttons to help users change input values, how to create dynamic graphs that not only will save you time but also impress whoever you will show this to, how to create the very useful waterfall graph and how to hide spreadsheets in a manner that will make it harder for non expert user to access them.
You can click here to access the Excel Tricks section.
I hope you will enjoy this first update and let me know if there are specific topics you want me to add in the website!
After a lot of long nights and weekends spent working on the content and on the design of the website, the Financial Modeling Academy (FMA) is finally born!
I created the FMA after realizing that a lot of people never received any proper training in financial modeling and do not realize that Microsoft Excel is actually much more powerful than they think. All it takes is knowing a few tricks, functions and good practices to take your models to a whole new level. And because it is through practice that one can improve his/her skills, I have prepared exercices that members can download.
I will update the website regularly and I will take into account your feedback and your requests to add new categories.
I hope you will find it useful and that you will enjoy it.