Chapter 4
Building a Financial Model by the Rulebook
IN THIS CHAPTER
Documenting assumptions
Creating dynamic formulas using links
Entering data once
Modeling with consistent formulas
Building error checks
Formatting and labeling your models
Because Excel is such a wonderfully flexible and universal tool, you can pretty much do anything with it — but that doesn’t mean you should! A key danger of using Excel is lack of discipline, leading to errors. When building a financial model in Excel, you’re unlikely to encounter the limitations and boundaries imposed by other, less flexible software, so there are certain rules you should follow to avoid these issues. In this chapter, I fill you in on some key rules you should follow when building a financial model.
Document Your Assumptions
The term “garbage in, garbage out” is never truer than in relation to financial modeling. You can have ...
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