Strong financial models often stand out because of subtle but useful elements. A Legend clarifies formatting and assumptions, while a clear Model Structure makes navigation simple. An Error and Warnings block flags issues early, and a Model Log tracks key changes for transparency. Adding Macros for automation further improves efficiency and reduces errors. These small touches greatly enhance both reliability and user experience.
Legend
Model needs a legend to make it easier for user(s) to navigate through different cells.
Legend helps to understand the origin of the cell content.
Model Structure
Model Structure shows the flow of the logic in the model.
It not only helps to navigate through worksheets of the file but also support the flow of the modeller’s thoughts while developing the model.
Errors & Warnings
Is any of the model end year cash balance is negative?
Is the balance really balanced?
There are lines which you would like to keep under control – “Errors & Warnings” is the best instrument to do that.
Model Log
Do you remember what causes the change to IRR or NPV since last time you presented your model?
Model Log is the method to keep track of the model changes.
Log is a simple and efficient method to track the changes since last submission.
A Small Macro
A bit of automation – won’t hurt!
With changes to calculation, sieving the errors and typos, the model output constantly changing.
Every time when you need to re-run the whole set of Scenario Analysis – a small and simple – will help.
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