Financial Modeling Institute (FMI)

Although storytelling is a powerful tool in the finance industry, it is often overlooked. A 3-statement financial model is just one part of the story. To create a comprehensive narrative, an executive summary, clear assumptions, and all scenarios must be laid out, giving the story a beginning, middle, and end. When conveying the story of a financial model, conciseness and ease of understanding are crucial. Executives typically seek a summary of the model first, followed by curiosity about the assumptions used in its creation. Subsequently, the story delves into the base, best, and worst-case scenarios that were considered, concluding with all the schedules and statements that form the model. By captivating attention throughout the entire storytelling process, you can instill confidence in connecting the dots flawlessly within an error-free financial model, adhering to the best practices of an Advanced Financial Modeler. Ultimately, a well-crafted story outlining various scenarios, supported by accurate data and simple formulas, empowers decision-making. When coupled with great models and a compelling narrative, strategic decisions become clearer and more effective. To learn more, visit: https://lnkd.in/gmfFMp_H #financialmodeling #communication #storytelling

When building a financial model, attention to detail is crucial, especially when it comes to model structure. To ensure consistency and accuracy throughout the model, certain structural tips should be followed. Adhering to these structural tips can significantly enhance the user experience and ultimately contribute to the success of the model. Structural Tips: 1. Never enter the same variable twice within the model - a second instance should be linked back to the original input cell 2. Never hardcode values within formulas (i.e. =A5 + B5 + 29.832) – the 29.832 is a hardcoded value and should be entered into its own cell and referenced in the formula 3. Do not insert blank columns in between years (for extra space, make the columns wider / to add calculated growth rates, these should go on a different row) 4. Use circularity sparingly, and only if it is absolutely necessary and you have an excellent grasp of how to build, manage and de-bug circular references 5. Minimize or avoid the use of macros unless absolutely necessary. One common usage of macros in financial models is to create summary pages that populate the answers for multiple cases simultaneously #FinancialModel #Excel #Tips #FinancialModelingInstitute

Celebrating a remarkable year of growth, partnerships, and financial modeling excellence at FMI! Thank you to everyone who made 2024 truly outstanding. #FinancialModeling #FMI

Looking to distinguish yourself in your career? Get accredited as an Advanced Financial Modeler (AFM). Scholarships are available for the AFM accreditation program based on financial need and providing up to a 50% discount on the standard exam fee. The deadline to apply this month is December 31, 2024. Don’t miss out on this opportunity to advance your career. Applications are accepted monthly, so you can apply at any time. Apply Now: https://lnkd.in/g2ZfGmgX #financialmodeling #financialmodeler #scholarship #application #careergrowth

Lock in 2024 prices. Get accredited as an Advanced Financial Modeler in 2025. Validate your financial modeling knowledge and technical skills with the Advanced Financial Modeler (AFM) accreditation. AFM accreditation holders have demonstrated the skills to build best-in-class financial models. Learn more: https://lnkd.in/gkQRXJZ #FinancialModeling #AFMaccreditation #CareerGrowth #FinanceSkills 

While the FMI Community is an online platform, 2024 offered unique opportunities to meet the financial modeling community in real life. Some places where FMI could be found this year included: - Attending the Global Excel Summit in London, UK, to meet Excel users and experts from around the world - Delivering a session at the EuSpRIG Conference in London, UK - Launching FMI accreditations across China - Meeting leaders at the CFA Institute Society Leadership Conference in Montreal, Canada - Leading Faculty Development Programs, in partnership with NSE Academy, across India and meeting industry leaders in Mumbai - Presenting a session for The Active Cell conference at the Financial Modeling World Cup in Las Vegas, USA Thank you to all partners, attendees, and colleagues who made this year extraordinary. With you, we look forward to continuing to advance the discipline of financial modeling globally in 2025.

A strong financial modeler needs to demonstrate proficiency in Excel, Accounting, Design, and Finance. Many of the specific skills used by financial modelers are listed below. Skills of an Advanced Financial Modeler What decision makers see: • Model Design • Operating Schedules • Financial Schedules • Financial Statements • Scenario Analysis • Storytelling Skills • Capital Structure Modeling What decision makers don't see: • Risk Mitigation • Challenge Conventional Thinking • Quick Model Editing • Determine Optimal Assumptions • Informed Decision-Making • Perform Effective Research • Easy to Edit and Review • Ask Strategic Questions  • Excel Keyboard Shortcuts • Understand Company’s Historical Financial Statements • Adopt Alternate Approaches #FinancialModelingInstitute #financialmodeling #financialmodel #excel #skills

Get Faster in Excel with the keyboard - the Quick Access Toolbar (QAT) is a great resource to boost your efficiency. Customizing the QAT will put the features you use most, right at your fingertips. A QAT customized to your needs will save you time, allowing you to build financial models faster. If you want more tips on increasing your efficiency in Excel, watch  FMI’s Executive Director, Ian Schnoor, as he provides an easy-to-follow 8-step process here: https://lnkd.in/gidMhEqv #financialmodel #excel #bestpractices

It’s important for the model builder to address critical inquiries that lay the groundwork for an exceptional model. These questions help to unravel key information for model building. When a financial modeler is able to consider these issues, it allows the decision makers to make data-driven decisions. During the financial model building process, the model builder should be able to answer these 9 questions: 1 - Can a reader of the model understand the operations of the company? 2 - Have the assumptions been challenged and vetted? 3 - Which assumptions are key drivers to be tested as scenarios? 4 - Is there enough historical detail to validate the required amount of forecast detail? 5 - What is the important output that the users want to know? 6 - What metric is used to measure results? 7 - How many time periods should be included in the forecast? Why? 8 - What’s the appropriate periodicity for the model (e.g. monthly, quarterly, annual)? 9 - What is the most logical order to present the data? #FinancialModel #BestPractices #FinancialModelingInstitute

Before building a financial model, it is critical to have an effective plan. This helps to ensure that the scope, design, structure, level of detail, and flow are optimal. The following best practices for model planning will help construct robust financial models, facilitating informed decision-making and driving superior outcomes. 1. Review historical financial statements Read the management discussion and analysis, and the notes to the financial statements. 2. Learn about the industry Read industry journals and equity research reports. 3. Understand the purpose of the model Ensure that the output calculations allow the model users to make the required decisions. 4. Determine the key drivers Key drivers are the most critical variables that will determine the success or failure of the company. 5. Make a list of assumptions This is usually a big list of every assumption needed to build the model. 6. Identify the required schedules and components Plan the order and flow of every section in the model such as revenues, costs and working capital. #financialmodeling #planning #bestpractices #FinancialModelingInstitute