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Improving your financial modelling

20th Mar 2014
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"How can I get better at Excel modelling"? This question was asked recently by a delegate on a financial modelling course. Here are some ideas. You can get fuller details here: getting better at financial modelling.

Modelling and surfing

Learning modelling is probably a bit like learning to surf. You can look at it and talk about it forever, but at some point you've got to just get out there and "just do it".

Build your own model

The quickest way to come up the curve is to find an opportunity (e.g. as part of a work project) to build your own model. Hopefully, in an environment where you have a few friends you can say "Hey, how can I do this?". That's the quickest way to start learning and keep learning.

Buy a book?

Don't rush out and buy a book (they can be helpful, but it's like the difference between reading about surfing - which is always something that's going to be hard to describe - instead of doing it) - unless it's something you decide you can keep on your shelf and use for reference as do your own modelling.

Make use of Excel's own 'built in' resources

Get used to clicking on Excel's fx (insert function) button all the time as you see other modellers using functions you haven't seen before - that will give you some clues about function structure and help you work out what others are trying to achieve. Get used to using Excel's help function all the time (it takes a bit of effort, but it's generally very good).

Practise using your keyboard shortcuts?

If you want to get faster, we've got some material to help you bone up on your Excel shortcuts.

Hone in on the Excel functions most likely to help your modelling

Here is some material that highlights some of the Excel functions you will likely find most helpful for modelling: Excel modelling functions

Relax - just a little bit

Excel is massively over-engineered (they feel like they have to add something every time they want to try and sell you a new version - and they've been bringing out new versions regularly for more than 20 years). The great news is that you can survive a career in finance using hardly any functions at all. People around you may use all kinds of functions to try and make themselves feel clever compared to others. But maybe they're not quite as clever as the soul surfing modellers who aren't going to be intimidated by what everyone else does; the modellers who play their own game, constantly challenge themselves to solve the problem in the neatest way possible, work out how to break the problem into clear logical steps, are really careful about how they structure their model, and use just a few neat functions at each stage.

Get surfing/ start modelling!

Time to paddle out into the waves/ fire up Excel!

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Replies (3)

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By The 5-50 Coach
25th Mar 2014 09:07

Great article, totally agree and have been getting frustrated at all the over engineering that's been added ever since excel 4!

Get out and play is always the way.

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By DaniJDevine
30th Apr 2018 09:49

I really like your post. Keep it up!!

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By BonitaMKatz
04th May 2018 10:48

Well done. Thank you for sharing.

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