The top 20 finance modeling hacks they didn't teach you in school!


Hi Reader,

Have you ever been asked to build a Financial Model but didn't know where to start?

Have you noticed that Financial Modeling is a skill that is more and more required in Finance jobs?

Do you have to build financial projections for your budget?

If yes, then this week's newsletter is for you!

Finance modeling is more than just crunching data.
It's about understanding business processes and operations.

It is an important skill to have, as financial modeling expertise is key to predicting the financial health and stability of your company.

In this edition, I will dive into my top 20 finance modeling tips and show you a way how you can master this skill.

Nicolas


Free! Webinar on AI: 18th of Sept

On Wednesday, September 18th, I will be speaking in a free webinar on how to use AI for cash flow and financial analysis with Agicap’s New AI Assistant.
👉 Save your spot for the free webinar now.


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🚨Offer: Why Bojan's course will take your financial modeling to the next level!

Count down to 2024-09-13T07:00:00.000Z

I know you probably waste hours tweaking spreadsheets that don’t tell the right story, leaving your insights unnoticed.

Outdated templates, messy spreadsheets, and inconsistent results can undermine your valuable work and hold back your career.

We’ve all been there, spending countless hours building models that just don’t hit the mark. If your models aren’t driving decisions, you’re missing a key opportunity to shine.

So you are probably wondering what the solution is.

My friend Bojan, who has enormous experience in finance and consulting industry, is the biggest expert on financial modeling and has already coached big companies like Heineken, Mercedes Benz, Adecco, and Siemens.

Also, he has helped students to understand financial modeling and shine in front of their boss to access the promotion they deserve.

What will you get by taking his Finance Modeling course?

  • Transform Your Analysis: Learn advanced techniques for budgeting, forecasting, and M&A valuations that make your models clear, accurate, and decision-ready
  • Stand Out to Stakeholders: Create professional, data-driven projections that impress management and clients
  • Work Smarter, Not Harder: Save time with 50+ ready-to-use Excel templates and hands-on training

All that is packed into a 6-hour video course divided into 5 modules of 35 lessons!

On top of that, I negotiated for you a 50% discount (but don't wait, this this deal ends Thursday!)


Top 3 Financial Modeling Tips (The rest are on our website)

If you want to become successful at building financial models, then you need to start implementing my best tips based on my 15 years' experience:

#20. Start with a Clear Objective

If your model lacks a clear purpose, it’s easy to lose focus, leading to a cluttered and inefficient structure.

For example, imagine you're building a model to evaluate a new investment. Without a clear objective, you might include unnecessary details, like projecting the impact of market fluctuations when they’re irrelevant to the decision at hand.

Solution: Always start by asking, “What key decision will this model inform?” This clarity will guide your approach, ensuring that your model remains streamlined and aligned with its intended purpose.

For instance, if the objective is to assess the viability of a new project, your model should focus on cash flow projections, ROI, and risk factors directly related to that project.

#19. Simplify Assumptions

Overcomplicating assumptions can make your model less reliable and more difficult to manage.

Take a budgeting model, for instance. Instead of projecting each expense category with individual growth rates, consider grouping similar expenses and applying a single, conservative growth rate.

Solution: Focus on the key assumptions that truly drive outcomes. Group-related variables and general growth rates should be applied where possible.

For example, rather than separately estimating utilities, office supplies, and travel expenses, you could combine them under “operational expenses” with a single growth assumption.

Believe me, this not only simplifies the model but also reduces the potential for error.

#18. Avoid Hardcoding

Rigid, hardcoded inputs limit your model’s adaptability to new information or changing conditions, making updates unwieldy and increasing the risk of errors.

If your inputs are static or embedded directly into formulas, you may face significant challenges when market conditions change or when new data becomes available.

Solution: Always use dynamic inputs by linking to an input sheet where key variables are listed and can be easily modified.

For instance, instead of hardcoding sales projections or other assumptions directly into your formulas, reference these inputs from a dedicated sheet. This ensures that when market conditions or assumptions change, you only need to update one cell, and the entire model adjusts accordingly.

This has saved me hundreds of hours and made my boss loved me because each time we had a last minute change, my model could be updated in a few seconds!


Free! Webinar on AI: 18th of September


Discover proven strategies for integrating AI into financial operations to boost efficiency and drive smarter decision-making with Agicap's new AI assistant. Join me on the 18th of September in the free webinar organized by Agicap.

Nicolas

P.S.: Use the opportunity to grab the course at a price I negotiated for you. Learn financial modeling from the best expert in this field and impress your boss and stakeholders!

Count down to 2024-09-13T07:00:00.000Z

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