Here are some common statements about financial modelling. Which ones do you agree with?
- Financial models are very complex and therefore need lots of IF functions.
- Financial models are inherently circular and therefore should be switched to iteration.
- Iteration should be switched on to calculate interest.
- Circular references should be broken with macros.
- Financial models need copy paste macros for complex tasks like debt sculpting.
- Young people today have good Excel skills. After all, they have grown up with computers.
- Excel is easy to learn to play about with.
- Online Excel training will teach you all you need to know about financial modelling.
- New graduates should be able to pick up Excel on the job.
- Complex models need long formulae.
If you agree with any of these statements, then please get in touch and hopefully I can convince you otherwise. Widespread belief in these common myths is the cause of “black box” models: time consuming to write and hard to analyse. And inevitably full of risk.