Designing a Financial Model – Structure

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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