A good financial analyst will use each column and row for only one type of information, and will always cluster numbers to be added in a financial modeling exercise.
Preserving each column and row for a specific type and value helps you in …
- Using named ranges – e.g. if a row is named “sales”, and columns I to L are months September to November, entering “=sales” in column J will refer to sales in October only in the financial model.
- Checking for errors – calculation formula in any one column or row should generally only refer to cells in the same column or row in the financial model.
… and it will help you avoid:
- Deleting or inserting columns that look blank but in fact contain information in another part of the spreadsheet of the financial model.
- Unintentionally overwriting information as you copy calculation formula across or down a spreadsheet in a financial model.
- Try to put numbers to be added up together instead of putting them in random selections of rows, for example,
use =sum(A27:A30) rather than =E352+E370+E406+E411
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