Corality’s Best Practice Financial Modelling course in mid-February was fully booked and with 13 participants became a very interactive training session. The course covered Corality’s best practice financial modelling methodology, SMART, and will enable participants to achieve more consistent and accurate outcomes. It also covered the construction of flexible debt repayment functionality and ratio analysis and will help participants learn more about time saving techniques including scenario management and data tables.
Course participants were able to gain valuable industry insights from one of Corality’s expert trainers, Linh Le. With significant financial modelling experience for project finance, capital raising, debt restructuring and merger and acquisition transactions across a wide range of sectors, including mining, energy, infrastructure, technology and telecommunications, Linh kept the course informative and interactive.
Following is an interview with Linh about his take on Corality’s Best Practice Financial Modelling course in Perth on the 17 and 18 February.
What were the main learnings in the course today?
The course really emphasizes the importance of being disciplined with regard to good model structure, layout and presentation, as well as keyboard shortcuts that exponentially improves productivity. We applied this in building an example cashflow model and, in doing so, built a flexible, yet easy-to-implement scenario manager and sensitivity analysis.
Which industry sectors do you experience the highest level of activity in?
In Perth, naturally there is a lot of modelling work in the mining sector – from both junior mining explorers seeking to strategically evaluate development options and large, established operators developing their corporate strategy and using the model as a key tool. The oil and gas sector here is also highly active.
What questions did you get from the participants?
I fielded a few questions around the different approaches to sensitivity analysis and risk, particularly the ‘usual’ analysis in project finance transactions and the application of Monte Carlo simulations (not normally used, in my experience). I also fielded a question around structuring a multi-asset or multi-project model.
What were the main features of the financial model developed in the course?
Three really important features:
- a flexible scenario manager allowing for a range of flexes around various assumptions (putting an end to separate files for separate scenarios)
- sensitivity analysis via data tables (no more hours spent copy and pasting of output to build a sensitivity table)
- integrity checks – be confident at any time that the model is working as intended
How would you like to change the world of financial modelling?
Simply, to help people build great financial models that are easy to follow and a pleasure to use – I’ve seen my fair share of terrible models that cause unnecessary stress and angst. Also, to help people be more productive with their time – and get out of the office earlier through educating people about faster, easier ways to get things done (e.g. shortcuts and data tables!)
What is your favourite Excel shortcut?
Ctrl-[ to dive into the first cell that the formula references – great for diagnosing bugs and for understanding formulae. Then F5, Enter to return to the cell you were at. Anything else you would like to share? I tend to cringe a little anytime I see finance professionals and clients not get around a model or a spreadsheet very quickly – e.g. holding the right arrow to go to the very end of a sheet. I can’t emphasize enough the value in learning the shortcuts in Excel and really force oneself to get into the habit of using them: while painful at first, they save a bucket-load of time in the future – the payoff is tremendous!
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Further Reading
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