Mastering Financial Modeling: A Professional’s Guide to Building Financial Models in Excel

CHAPTER TWOBest Practice Principles

2.1 WHAT CONSTITUTES A GOOD MODEL?

A “good” model should exhibit a number of characteristics; for example, it should be:

Well structured

Easy to follow

Built in a way that minimizes the risk of errors

Using best practice in modeling makes it easier to develop models that exhibit these characteristics.

2.2 KEY BEST PRACTICE PRINCIPLES

2.2.1 First Draw a Sketch of Your Model on Paper

Please resist the temptation ...