1. A Few Guidelines for the Design of a Financial Planning Model
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2. Desirable Attributes for a F.P. Model?
Easy to use
Flexible
Reliable …
(0) Attributes
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3. System Design: Input, Process, Output (Checks!)
Accounting Model
Historical Data
(1) Worksheet Structure
Parameters & Controls
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4. “mod” Sheet (Time Structure)
(1) Worksheet Structure
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5. “mod” Sheet (Account Structure)
(1) Worksheet Structure
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6. Enter: Historical Statements (Check!)
(1) Worksheet Structure
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7. (1) Worksheet Structure
Enter Parameters
(1) Worksheet Structure
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8. Importance of Common Logic Across Time
(2) Time Frame
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9. Columns with same logic
Recovery
Columns with same logic
(6) Operation
Ctrl R
Base Column: T0
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10. Importance of Checking for: Steady State Growth
(3) Diagnostics
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11. Easy to See Warning Signals
(3) Diagnostics
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12. Calculation Options: Iterations Allowed
(6) Operation
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13. Setting Calculation Options
(6) Operation
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14. Summary Easy to use Flexible Reliable
Separate data entry, assumptions, and model sheets
Document with labels, titles, messages
Allow recovery if model crashes
Flexible
Variable time horizon: length, actual (period length?)
Switches to choose different modeling behavior
Reliable
Diagnostics and warning signals on:
Accounting consistency
Valuation theory consistency
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