Let’s delve deeper into our investigation into the 10 Rules of Financial Modelling. In this post, we look at the importance of presenting your financial model and how making the best use of formatting, dashboards, and charts can help others understand your work.
Although it’s essential to make your charts attractive and visually communicative, it’s vital users can access and digest the outcome of your calculations to make their decision with confidence.
In addition to how easy it is to view the financial model, it’s also crucial that it prints properly so everybody from your peers to upper management or a committee can see it. As you go, it is imperative to be aware that your model may need to be added to a bound document or added to a PowerPoint presentation.
Common presentation related mistakes
One of the most severe and time-consuming mistakes is when the financial model will not print correctly. It may come out of the printer with vital pieces of information missing, such as row headings, column headings and many parts of paper that need to be stuck together with glue or tape in the correct order to make any sense.
What is good practice when it comes to presentation in financial modelling?
First off, it’s essential to begin the financial model with the output in mind. What will you be handing over at the end of the modelling? It may not be the spreadsheet itself, as the project may require a different format.
Whatever it is, it may not even have you there to explain everything either. You’re going to need to provide a financial model in the form they’ve asked for, and it will need to justify itself.
What we do at Operis
Here at Operis, we encourage our students to consider what their end game is. Where are they going?
We teach junior analysts that they need complete the page setup right at the start. Consider:
- which headers and footers are required?
- Is the page to be an A4 printout or A3?
- Will it be in colour, b/w, landscape or portrait?
- How should the information be organised?
- Are there any necessary styles to keep with the business branding?
- What do the users expect when it comes to reporting conventions?
If the numbers used are vast and long – i.e., telephone number style, it will be less digestible than if you break them down to something sensible. For example, three digits are long enough in many cases for the outputs to read easily.
The value of charting
The graphical representation of numbers can be a compelling way to communicate. Financial information can be a little overwhelming and challenging for the eye and comprehension, but sometimes charts show numbers in a better and simpler way. For example, line charts help show movements over time, and pie charts the relationship of parts to the whole.
As you work through the financial model, consider whether charting will improve the communication of your information.
It’s all in the planning
Plan the activity, plan your model, plan the reports, print your information to check the layout, and get these approved from the outset.
As you start, immediately begin to work on the look of your numbers so that if at any time your manager wants to see where you are, then you’ve got something decent to show them so far. You have the figures of interest already in place in a form that is easy to understand. You also don’t want to be surprised by a visit from a client without being prepared. You don’t want to print off what you have so far, and a big jumble of papers comes out of the printer.
The Operis approach
At Operis, presentation is a significant point. We consider planning out the presentation as being critical to the success of the financial model. As part of developing the model, we print it out to see where we are with it so far.
Juniors print out their work as a test to take to the manager or the director, so they can secure approval before taking it any further.
There’s also the satisfaction and confidence to be had from knowing that those who use the spreadsheet will be able to use it as it will look how you expected and will be in the format they are expecting.
In summary, presentation is a vital part of financial modelling and needs to be planned and checked during the process, and you’ll vastly improve your outcome.
