All of us have bad habits when it comes to financial modelling. Some of us are self-taught and lack fundamental discipline and others have attended too many ‘Advanced Excel’ training course and are getting kicks out of showing off new fancy skills.
There are different levels of bad habits though, look and below is my list of the seven deadly sins of financial modelling.
- You have developed a custom Excel colour-scheme with a white font on black background and removed grid lines.
- You are using ISERROR on every line instead of figuring out why you are getting so many errors
- The number of named ranges in your model is greater than your number of friends.
- The auto-open macro disables tabs and Toolbars and navigation is possible only with your own custom-built super-navigation system
- The logic of your nested IF functions resemble the Amazon delta
- You are using Excel’s default colour scheme for graphs (who designed that anyway!?)
- Your balance sheet is not balancing (or worse – has a balancing item!)