Review: Financial Modeling in Excel for Dummies

“Hey, George. We have this spreadsheet we use to create our financial models. It is really complex. 

Some nights when we need to get projections to the CFO the model breaks and we are here until 11pm.

It is really complex. (I already heard that, thank you!)

Think you can look at it?”

Every analyst can expect this day of reckoning. You get “that one spreadsheet” that nobody knows how to handle. Do you make do, hoping that it’s right and putting life on hold when it breaks?

Or do you dissect the workbook with surgical precision, delivering a solution that impresses your boss, induces envy in your coworkers, and sends you home on time? 

Control the model, or the model controls you. 

I don’t know that I ever fixed that model entirely before I took a new job. But maybe I could have if I’d read Financial Modeling in Excel for Dummies first.

Danielle is the principal consultant of Plum Solutions and brings decades of modeling experience to the book

Danielle gets it

A theme of my blogging is to help people take control of their work through better Excel practices. It’s not enough just to know lots of functions and walk through clean models. You’re more likely to fix broken data sets, inherent clunky models, and wage overall guerrilla data analysis.

Danielle Stein Fairhurst, the book’s author, shares this outlook. The principal consultant at Australia’s Plum Solutions and founder of LinkedIn’s Financial Modeling in Excel group, Danielle brings decades of modeling consulting and training to this book. (I learned of Danielle through her appearance on Excel.TV.)

Financial Modeling in Excel has plenty of battle-tested techniques for error-checking, formula validation, and so forth. Compare this to many courses, often taught by instructors with limited experience in the field, which only teach you how to use Excel when everything goes right. And if you’ve spent any time in an office, you know how important it is to be able to troubleshoot broken Excel models.

Danielle also discusses the challenges of inheriting, auditing, and sharing workbooks. What happens when you take a departed employee’s spreadsheets and there is no documentation? How do you control coworkers from breaking your models? These “people” problems can be just as delicate as the spreadsheet design itself. 

First learn Excel, then give your opinion

Excel is an easy target for many computer purists — not quite a programming language, not a menu-driven application, it requires a set of practices largely its own. The problem is, many users dismiss Excel on its shortcomings before learning all its functionalities. 

Excel is extremely flexible: a double-edged sword. While there is no better tool for quick, digestible data analysis, Excel is trickier to use for rigid, sustainable models.

Trickier, yes. But not impossible. And Danielle does a wonderful, honest job discussing the strengths and weaknesses of Excel for financial modeling. 

Hidden rows? Cell references not updating? Danielle knows all the objections, and shows you how to overcome these alleged limitations. Ever use the Watch Window or the Inspect Workbook element? If not, you are missing some excellent spreadsheet audit tools baked right into Excel. 

You would be no dummy to purchase this book!

A tip-of-the-iceberg master class

In around 300 pages, Danielle takes you from spreadsheet design principles to building and visualizing your very own financial models — a lot of ground! The book reads like a distillation of decades of Danielle’s experience, but there is plenty more to learn. I would suggest, for example, Excel TV’s Dashboard Pro Course to expand your knowledge of data visualization (covered briefly in the book). Or take Jon Acampora’s VBA Pro Course and learn how to automate routines in your modeling. Danielle also offers several forms of Excel training — she’ll even come on-site to your workplace! (Although I might prefer a trip to Sydney.)

Financial Modeling in Excel for Dummies is a great reference for analysts of all skill levels. While the content focuses on building financial models like income statements and budget pro formas, the principles apply to any variety of Excel modeling. Most chapters, in fact, could apply to nearly any model in Excel as much as they do to financial models. 

Don’t let messy workbooks control what time you leave work! Control your data! (And apologies to past me for not having this reference earlier.)

Ready to Rock Financial Models? Get your copy here.

Note: I am an affiliate of some of the products mentioned in this review and may receive a portion of their sales.

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