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

CHAPTER FIVECASE STUDY 1:Modeling the Calculations Sheet

In the previous chapter, we built the Front and Inputs sheets. We will now apply the knowledge gained in Chapters 1 and 2 to build the Calculations sheet for the financial model for the phone factory project.

5.1 STEP 1: WRITING MODEL SPECIFICATIONS

We already started thinking about the calculations in Steps 1 and 2 of the previous chapter. We now need to expand on this initial thinking so that we can start building the Calculations sheet. This detailed description of the calculations is often referred to as the model specifications, and for complex modeling projects, the model specifications can be a separate document in its own right. The model specifications describe the numerical relationships ...