There’s a great article by The Financial Modeling World Cup Team that shows how it pays to remember that good decisions based on bad financial modelling can lead to costly business mistakes.
Usage Of Long And Complex Formulas
Long formulas are hard to write, read, understand, check and improve. Keep your Excel formulas short and simple by looking for functions that are simply more effective!
Also, check your initial data structure – you might feel the need to use long and complex formulas if the dataset is poorly organised.
Usage Of Merged Cells
One of Excel’s most condemned practices is the usage of merged cells. Anyone who is using the Excel file after you will be notorious if they try to move, sort, or do any other data manipulations with the merged cells.
To avoid the usage of merged cells, use the “Center Across Selection” function. Go to Home -> Alignment group -> Find the arrow in the bottom-right corner -> Text Alignment -> Horizontal -> Center Across Selection.
Usage Of Help Cells Hidden From The End-User
For the model’s reusability and later improvements, it is always better to be transparent in your calculations. If you hide the cells or simply colour the inputs in the same colour as the cell, it will be hard for other people to edit the file later.
Putting Numbers Directly Into Formulas
The model will be very hard to update later if you put numbers directly into formulas and not into a designated place for assumptions. This will poorly affect the usability and time spent on making model adjustments.
This article is based on a post by The Financial Modeling World Cup Team that can be found at the following link.
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