Those of us in the F1F9 instructor team have got packing a suitcase down to a fine art.
Much like building a standardised financial model, 80 per cent of the packing is boiler plate: heavy stuff at the bottom, socks et al to fill the smaller gaps. Larger items go on top before a miscellany of items: chargers, wash bag, microphone (there is always much that can be recorded for F1F9’s online course material when you are in a hotel room) and head phones.
And the remaining 20 per cent is location specific: I’ll have course material with me if we don’t trust the postal system. There will be extra layers for chilly Toronto and heavy shoes for snowy Moscow. I will bring sunglasses for Abu Dhabi and Dubai. Don’t forget an extra spring in my step for New York.
In November, we plan to run a 2 day FAST financial modelling course in Johannesburg, South Africa. It is my first visit and the first time I will run a course in the southern hemisphere for F1F9. These are exciting times.
For my first trip, here are five items that I will be taking with me in my Excel FAST financial modelling kit bag. Those joining me on our courses might want to look out for them.
Positive numbers are quite simply useful for getting lots of stuff done without too much complexity. If a model has calculations that are based on a “positive is normal” convention, then any negative numbers that do appear stick out like a sore thumb. My immediate response: there must be an error. And I investigate.
Input sheets become easy to read and change. It is so simple to say: “all inputs are positive”.
And when the decision is made to turn a number negative, it is made with forethought, deliberation and consistency.
The INDEX() function is unrivalled for simple scenario selection. Consider a data set and return a value from that data set according to its position.
It is flexible and when the input is wrong the model will tell you that it is broken.
It is neat, robust and handy in a number of situations. It is a bit like a travel iron.
MATCH() is a twin for INDEX(): its equal and opposite. Consider a data set and return a position from that data set according to a value. In combination, the twins are an essential component of scenario managers.
As useful for picking out single numbers from a row as it is adding up a range in a row, SUMIF() is there in my toolkit for working capital, depreciation calculated on an ongoing programme of capital expenditure and other structures requiring numbers that needed to be shifted along the row.
It is the device on the penknife that is there to get stones out of horses’ hooves. You wonder what its function might be and then you have a stone to remove. Its potential becomes crystal clear.
MIN() and MAX()
Another set of twins – and I would make certain I have both with me.
MAX( 0, number) gives me positive numbers only; MIN( 0, number) * -1 gives me negative numbers only (positive version thereof). This little device is fundamental to modelling cash sweeps, dividend pay outs, reserve accounts and revolving credit facilities.
It is a simple device – but modelling comfort and happiness relies heavily on its use. It is my hand held fan, perhaps.
So think of me as I walk through customs at Johannesburg and offer my bags to the officials: positive numbers, two sets of twins and a device for removing stones from horses’ hooves are under inspection.