The Basics of Financial Modeling

CHAPTER 5

Testing and Documenting Your Model

In this chapter, I will examine the process of testing models and providing user documentation for models. Without question, one of the most neglected stages of building models are the testing and documentation, because they are often performed toward the end of the modeling project and are subject to time constraints. I want to make sure that you have a firm understanding of why the testing and documentation should be considered just as important as any other stage in modeling.

Testing the Financial Model

You will notice that I have jumped into model testing before model building. Rest assured that this is deliberate, because the testing is planned around the model. There are no standard tests for ...