By Anurag K
Why Fred Fears Financial Modelling?
Fred is an enthusiastic young individual, having sound knowledge of excel has been working on his first few modelling projects for couple of months now.
Having got into the first few modelling projects, Fred though initially confident, has started to fear financial modelling. But why?
As for my personal experience.
- Financial models can be both a horror story or a fairy tale.
- Models change and can become unrecognizable very quickly to what was originally perceived.
- Can be a horror story when failing to understand initial assumptions/objective clearly.
- Met with people who did a fantastic work at model logic building but then personally had no confidence over it.
Modelling nightmares Fred encounters every now and then
- External links excel search can't find.
- Sudden appearance of unwanted circularities
- Balance Sheet mismatches, unable to find and correct.
- Sudden appearance of #DIVs, #REFs, #VALUEs on changing inputs.
- Inappropriate values unable to trace the source.
- Named ranges behaving inappropriately and not picking values it should be.
- Losing track of versions/changes done in different versions and the question 'why did we arrive at a particular logic/input?'
- Dealing with constantly changing client requirements and Fred (the modeller) is unsure whether the previous logics now hold valid in the new scenario.
- If many modellers are involved in a single project, each sheet gets structurally different and separate formatting/outputs. No one knows what's happening except for the sheets individuals are building.
- Excel file get corrupted and crucial changes gets lost.
- A single Excel sheet gets too slow to navigate, work, add or remove line, even though there aren't too many formulas or data.
Nightmares for the client
- Single/Primary modeller unwell when urgent changes are required in the model, while others including the client are in dark concerning the actual model calculations.
- Last minute changes by client, not entertained by the modeller, conveying inflexibility of the model and couple of more hours required to incorporate them when you have only minutes.
- Changing inputs too difficult for the client as he's dependents on the modeller to alter even trivial inputs. This may be due to input sheet is not user friendly.
- Client knows in theory what the model should be doing or what has been conveyed to the modeller but can't trace the outputs to calculations, to be certain of, in a non-transparent model.
The EModel Factory Approach
We are working on a novel, futuristic and an innovative approach to financial modelling, not only to counter these errors but to rethink the entire modelling process.
We work on modular logics, which are well tested calculations, flexible in all scenarios. Our users can create a preliminary model, error free and ready to use, using the objective form available here.
We also entertain any customization client may further have, handled by the expert modellers indeed.
Contact us at firstname.lastname@example.org
Here is a free addin you to download, which helps in removing external links.
Click here to download
We are working on several other modelling addins to solve the above problems and these will be available shortly on this page. Would be happy to know if there are any other addins you think we should put on this blog. We will start working on those first. Please add to comment section below.