Centre for Continuing Education

Financial Modelling Best Practice Course

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In order for finance professionals to effectively perform their duties, they need to be able to construct robust and transparent financial models that can be easily used and understood by others. Creating such models requires a systematic introduction to the best practice principles that underpin financial modelling.

This course provides an introduction to the disciplines and techniques underpinning the construction of financial models that are transparent and easy to use. The course is structured around 12 tried-and-tested best practice principles, which are the distillation of the lessons learned (often the hard way) over many years working as a professional financial modeller. It will be taught in an engaging manner, making use of our real “war stories” and practical exercises. If you are about to embark on a career that requires building financial models, or if you are already doing such work but have never been shown the ropes, then this is the course for you.

Aims

This course aims to provide a systematic overview of best practice financial modelling so that when you are required to construct financial models, particularly in spreadsheets, you will have the knowledge and confidence to do it well.

Outcomes

Upon successful completion of this course, participants should be able to:

  1. Explain why professionals need to build financial models.
  2. Explain why most financial models are constructed using Microsoft Excel.
  3. Explain where to begin when designing and constructing a financial model.
  4. Articulate the questions that should be asked when scoping a financial model.
  5. Follow the best practices when constructing financial models.
  6. Use styles to ensure consistent and disciplined formatting is used in financial models.
  7. Create flags to ensure that logic can be consistently copied across a timeline.
  8. Create punch-through calculations when modelling repeating structures.
  9. Incorporate error checks into financial models.
  10. Use range names to improve the transparency and usability of financial models.
  11. Use the best file type for any financial modelling situation.
  12. Follow a file naming taxonomy that minimises the risk of losing work when constructing models.
  13. Avoid the worst practices when constructing financial models.
  14. Assess whether a financial model that has been presented to them should be relied upon.
  15. Methodically find errors that exist in financial models (particularly those built by others).

Content

This course covers the following topics:

Why build models?

We start with the fundamental question of why financial models are required (and particularly why professionals are paid large amounts of money to build them). The answer to this question underpins the remainder of this course, which is aimed at ensuring that our financial models are transparent and robust.

Why use Excel?

Next, we focus on why Microsoft Excel has become the tool of choice when building financial models. We also examine the situations in which Excel is not the best tool for the job.

The modelling lifecycle

Here we introduce a problem-solving framework that we use to approach any modelling problem. The framework can be applied beyond financial modelling, but it just also happens to be the go-to paradigm for thinking about financial models. We will walk through each step of the lifecycle to examine what it involves and why it is important.

Modelling best practice

Here we focus on the design and build steps of the modelling lifecycle with reference to 12 best practice principles that should be adhered to. We work through each principle to understand how it got onto the list, and why it is wise to follow it. Several practical activities will be used to solidify the concepts.

The blacklist

Next, we look at the other side of the best practice coin, being the worst practices that should be avoided. We introduce the 9 techniques that should not be used when constructing financial models in Excel, and the purpose of this is to help participants critique models that may be put in front of them. Given the 9 techniques are likely new for most students, we have an activity for each that helps explain how the technique works.

Testing

In the final topic, we introduce a series of techniques that can be used to find errors in models, particularly those built by others. The techniques derive from those that we use as professionals when conducting formal model audits.

Intended Audience

This course will benefit anyone who is already working or about to start working in a career that heavily relies on Microsoft Excel to build models. Typical roles that require these skills include:

  • Investment bankers
  • Financial analysts
  • Commercial analysts
  • Strategy consultants

That said, anyone who works in a role that uses Microsoft Excel would benefit from learning the best practice principles.

This course is also suitable for students who are studying any commerce discipline such as accounting, finance, economics, marketing or actuarial studies at the undergraduate or postgraduate level (including MBA students). It would also benefit those studying in other fields involving numbers, such as engineering, mathematics, statistics and the sciences.

Delivery Style

This course is delivered as presenter-taught computer-based training in a Microsoft Windows environment. It involves a mixture of:

  • Visual content (slides and videos).
  • Open discussion of concepts (with encouragement for students to share their own experiences).
  • Practical problem solving through designing logic and converting it into Excel formulas.

The course is taught by leading financial modelling practitioners, meaning that during the classroom sessions, teachers will not only explain and demonstrate the theoretical concepts, but also talk about how they apply in a professional context, with reference to current, real world examples. This is not a theoretical course.

Materials

You will gain ongoing access to all exercises and teaching materials covered in the sessions. In addition to the slides and activities, the case studies completed will provide an ongoing reference that you can look back on when embarking on solving your own problems with financial models (be it at work or elsewhere).

Before the course

Prior to attending this course, you will be provided with an online pre-course case study. It is encouraged that you attempt this exercise in order to get the most out of this course. Further details will be provided prior to class commencement.

Features

  • Free repeat class - Conditions apply
  • Free USB flash drive
  • Expert trainer
  • Dedicated computer for every student
  • Small class size
  • Student notes – yours to keep
  • Statement of completion
$420 Limited inc GST
Financial Modelling Best Practice Course

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What others say.

  • Excellent content, exactly what I needed.
  • A great teacher who took the time to explain the fundamentals in detail.
  • Great teacher (engaging, humorous, easy going, knowledgeable), great real-world examples, great activities, very structured, great Moodle site.