Financial Modelling Project

April 13th, 2007 by admin admin

Currently, I just got another project in financial modelling. The company’s name is TL in short. The model is pretty complex as they have a number of dimensions, Channels group, Channels, Product Group, products and not forgeting that we will always have to deal with a time period of 5 to 10 years.

In the old model built by somebody in the company, the channel and product are presented as a matrix. This takes up the 2 dimensions we all have to work with. For the years, the old model has to be presented in different tables.

And the revenue and expenses are presented in a sheet of its own. While this seems to be a good way to organise the data, it encounters problem when you have to consolidate the data from the different cuuntries into regions. The linking of the data is super complicated. In fact, after the links are established, you will start to wonder whether they are correctly linked.

In the new model, I recommend putting the channel and the product in one dimension, i.e. on the left hand side. In fact, in the new model, there are additional dimensions such as the revenue, COGS, etc also present at the side. I put everything in one worksheet but have them organised using the group and outline function in Excel. So I can collapse the details to give me a overview and it also allows me to drill into the details by clicking the numbers on the top left hand corner of the worksheet (which is automatically created by Excel when you use the group function).

To consolidate the data, I use another worksheet. I created a complicated formula that allows me to read the data from the input sheet. With this database, I can create a pivot table which can help me to analyze the numbers in 2 perspectives, by channels and by products. This is the wonder of pivot table. With that, I can show the budget numbers (group by products) to the product managers and to the channels managers group by channels. How much time would I need to do that, a few seconds. Why? Because the data has been organised in a worksheet, I just need to drag and drop the dimension accordingly. And the data worksheet can be the interface to consolidate the data into the regions, without links. Without links because i intent to use MSQuery to consol the data. The beauty of it? Excel will do the update for me automatically.

That’s all for the time being.

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