Designing a Financial Model – Structure
When designing the structure of a financial model, always identify other similar financial models which can be leveraged as points of reference. Do not attempt to re-create the wheel.
A key decision any good financial analyst needs to make in a financial modeling exercise is on the financial model’s workbook structure: whether the financial model should be built within a single workbook, or multiple workbooks.
Advantages of using a single workbook
- All contents reside within one file
- No need to worry about linking between workbooks
Advantages of using multiple workbooks
- Each workbook can operate as a stand alone module to ease division of work
- Files are smaller
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