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I work in a lean staffed investment firm, I work directly for one of the MDs. I work a lot of hours.

I keep mistaking silly makes on my excel models and because there is really no one else to check my work, the MD chewed me out a few times.

My question is, how do you guys avoid making these silly mistakes? like adding an extra digit to a number or making a stupid grammar mistake?

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Comments (32)

  • SpacemanSpiff's picture

    Print out all your stuff and take the time to go over it by yourself before meeting your MD

    Looking at the numbers on a sheet of paper usually allows you a better perspective to spot things out whack than being stuck in the weeds F2-ing in excel

  • hartfordwhalers84's picture

    Print it out and go through it twice. I often catch formatting or date errors on a second review.

  • Determined's picture

    spartahill:

    I keep mistaking silly makes on my excel models

    I hope this was intentional.

    Talent is hitting a target no one can hit.
    Genius is hitting a target no one can see.

  • In reply to Determined
    andyinsandiego's picture

    Determined:
    spartahill:

    I keep mistaking silly makes on my excel models

    I hope this was intentional.

    hahahaha.

    To the OP, The obvious way to not make silly mistakes is to slow down.

  • Gun's picture

    How about I take your job and you can practice excel/English.

  • bonks's picture

    Nothing short of everything will really do.

  • All American Reject's picture

    #1 Pay attention to the details.
    #2 Get to know your people

    Profit comes in there somewhere after.

  • SC911's picture

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  • Disincentivy's picture

    Two things that help me a lot:
    1- Print it and read the numbers out loud in a different language (I do understand this is not an option for some)
    2- Take a break, do something else and return to it. Even a 5 min break from looking at the same thing helps.

    I may not be on the Jedi Council, but I sure am great with the Force.

    See my WSO blog posts

  • labanker's picture

    Printing out things and looking them over is good. However, if the buck stops with you (as is frequently the case once you're out of the analyst banking environment) you need to develop a few more error proofing tools. I've been thinking about how to do this better myself a lot lately. It's an interesting issue when you really think about it - if you put together a model with 1,000 calculations and you have a 99% accuracy rate (which is very high), you'll still have 10 errors in your model. This could obviously be very bad depending on what the errors are. So how do you prevent this? Here are a few observations from me - would be interested to hear other techniques:

    (1) Focus on what you are doing. Sounds obvious but you'd be surprised how often you aren't 100% focused on the task at hand. Instead you're modeling or writing rather mindlessly while simultaneously checking email, fielding phone calls, or surfing the web. Work in blocks of 1 or 2 hours where you don't respond to emails or fuck around. At then end of those blocks respond to email or take a break, then get back to it.

    (2) Lay out in detail what you plan to put together before you fire up Excel and start modeling. Think about what you are trying to accomplish overall, where the pitfalls may be, where some logical complexities might reside, how the analysis may change over time (and what functionality you need to incorporate as a result). This separates the planning from the execution of modeling, which allows you to focus on one thing at a time. When your brain is able to focus on one thing at a time, you generally make fewer mistakes.

    (3) Accept that you are not going to be perfect and will make mistakes. Some people say if you make a mistake your MD / VP / Partner / group will not trust you again and your career will be over. These are not good people to listen to. If you are the one putting together your analysis and also checking it, it's unrealistic to assume you won't make any mistakes. Accept this and stop worrying about it. You'll find the less you worry about this the fewer mistakes you will make.

    (4) Build-in checks to all of your models. Calculate important, headline numbers multiple ways to make sure everything pencils. Put the check outputs in an easily recognized form (i.e. "OK" or "0.000") where a quick glance lets you know if something's amiss.

    (5) Check the punchline numbers back-of-the envelope style. Think about it as if you had to explain the calculation in a meeting. That will give you a firm grasp on the logic and expose errors that tend to get lost among thousands of Excel cells.

  • In reply to labanker
    Whiskey5's picture

    labanker:
    Printing out things and looking them over is good. However, if the buck stops with you (as is frequently the case once you're out of the analyst banking environment) you need to develop a few more error proofing tools. I've been thinking about how to do this better myself a lot lately. It's an interesting issue when you really think about it - if you put together a model with 1,000 calculations and you have a 99% accuracy rate (which is very high), you'll still have 10 errors in your model. This could obviously be very bad depending on what the errors are. So how do you prevent this? Here are a few observations from me - would be interested to hear other techniques:

    (1) Focus on what you are doing. Sounds obvious but you'd be surprised how often you aren't 100% focused on the task at hand. Instead you're modeling or writing rather mindlessly while simultaneously checking email, fielding phone calls, or surfing the web. Work in blocks of 1 or 2 hours where you don't respond to emails or fuck around. At then end of those blocks respond to email or take a break, then get back to it.

    (2) Lay out in detail what you plan to put together before you fire up Excel and start modeling. Think about what you are trying to accomplish overall, where the pitfalls may be, where some logical complexities might reside, how the analysis may change over time (and what functionality you need to incorporate as a result). This separates the planning from the execution of modeling, which allows you to focus on one thing at a time. When your brain is able to focus on one thing at a time, you generally make fewer mistakes.

    (3) Accept that you are not going to be perfect and will make mistakes. Some people say if you make a mistake your MD / VP / Partner / group will not trust you again and your career will be over. These are not good people to listen to. If you are the one putting together your analysis and also checking it, it's unrealistic to assume you won't make any mistakes. Accept this and stop worrying about it. You'll find the less you worry about this the fewer mistakes you will make.

    (4) Build-in checks to all of your models. Calculate important, headline numbers multiple ways to make sure everything pencils. Put the check outputs in an easily recognized form (i.e. "OK" or "0.000") where a quick glance lets you know if something's amiss.

    (5) Check the punchline numbers back-of-the envelope style. Think about it as if you had to explain the calculation in a meeting. That will give you a firm grasp on the logic and expose errors that tend to get lost among thousands of Excel cells.

    Thanks. SB'd.

  • Gate_Crasher's picture

    Take a deep breath and go through everything.
    Everyone makes mistakes.

    "If they can't handle you at your worst, maybe they don't deserve you at your best." HAHAHAHAHAHAHAAHAH
    Ok that was pretty funny - I read that off some female's facebook. The dumb things they say.

  • Dr Joe's picture

    When summarizing an analysis in email form, I have found it very helpful to email it to myself in advance and see if anything looks funny. Surprisingly effective - things just look different once in your inbox.

  • In reply to bonks
    arant's picture

    bonks:
    Checklists checklists checklists.
    http://www.amazon.com/The-Checklist-Manifesto-Thin...

    This seems like a good idea, Do you have a checklist that you use in your work
    I understand that each model could be unique etc. but general pointers etc. would be useful

    Simplicity is the highest form of sophistication ~ Leonardo da Vinci

  • In reply to labanker
    arant's picture

    labanker:
    Printing out things and looking them over is good. However, if the buck stops with you (as is frequently the case once you're out of the analyst banking environment) you need to develop a few more error proofing tools. I've been thinking about how to do this better myself a lot lately. It's an interesting issue when you really think about it - if you put together a model with 1,000 calculations and you have a 99% accuracy rate (which is very high), you'll still have 10 errors in your model. This could obviously be very bad depending on what the errors are. So how do you prevent this? Here are a few observations from me - would be interested to hear other techniques:

    (1) Focus on what you are doing. Sounds obvious but you'd be surprised how often you aren't 100% focused on the task at hand. Instead you're modeling or writing rather mindlessly while simultaneously checking email, fielding phone calls, or surfing the web. Work in blocks of 1 or 2 hours where you don't respond to emails or fuck around. At then end of those blocks respond to email or take a break, then get back to it.

    (2) Lay out in detail what you plan to put together before you fire up Excel and start modeling. Think about what you are trying to accomplish overall, where the pitfalls may be, where some logical complexities might reside, how the analysis may change over time (and what functionality you need to incorporate as a result). This separates the planning from the execution of modeling, which allows you to focus on one thing at a time. When your brain is able to focus on one thing at a time, you generally make fewer mistakes.

    (3) Accept that you are not going to be perfect and will make mistakes. Some people say if you make a mistake your MD / VP / Partner / group will not trust you again and your career will be over. These are not good people to listen to. If you are the one putting together your analysis and also checking it, it's unrealistic to assume you won't make any mistakes. Accept this and stop worrying about it. You'll find the less you worry about this the fewer mistakes you will make.

    (4) Build-in checks to all of your models. Calculate important, headline numbers multiple ways to make sure everything pencils. Put the check outputs in an easily recognized form (i.e. "OK" or "0.000") where a quick glance lets you know if something's amiss.

    (5) Check the punchline numbers back-of-the envelope style. Think about it as if you had to explain the calculation in a meeting. That will give you a firm grasp on the logic and expose errors that tend to get lost among thousands of Excel cells.

    Awesome post if I could I would SB you

    As far as building in checks are concerned, I guess you could easily flag stuff like A =/= L+E etc.
    Do you have a list of all the checks that you typically build into your models?

    Simplicity is the highest form of sophistication ~ Leonardo da Vinci

  • leveredarb's picture

    tricky situation, the problem is once you have seen a slide/excel file too many times you can't spot your own mistakes any more. Some hints:

    1) Pay attention to what the MD pays attention to, in what areas does he find mistakes? Then check those areas intensively

    2) Always print out

    3) Review your own work as if you were reviewing someone elses and trying to screw them as much as possible (this one helps alot)

  • TonyPerkis's picture

    print it out and read it while you take a dump...i'll be right there next to you proofreading as well

    I eat success for breakfast...with skim milk

  • NewGuy's picture

    1) Financial statements - check your cash flow numbers match the company's (given you will be building your model in a different way to how the company laid it out). If not, analyse and find where differences lie.

    2) Balance sheet check - Assets / Liabilities + Equity = 100.00000000% (I always go to a ridiculous amount of decimal places)

    3) Your valuation makes sense. Look at comps EBITDA, EV, and multiples, and compare to yours

    4) Make sure the capital structure and other debt add up to what company reports as total debt on the balance sheet

    5) Avoid using plugs in the model e.g. you know total Opex was 300m. You break out two items (X - 78m, Y - 120m, and make Z = 300-(X+Y). I try to avoid using plugs like Z as if there's an error in what you input as X or Y, it won't be obvious when you're checking the model. If you add up the numbers for Z individually (even if just in the same cell), then any mistakes on X or Y will feed through to cash flow when you notice your net cash flow is different to what the company reported.

    6) Rest is qualitative stuff about the business which you can only check by doing your diligence properly

    I rarely find mistakes in #1-5. Where I do make mistakes, are in my judgement of a business' key value drivers and value proposition. But that comes with trying to learn a new industry every other week. When you're in an investment seat, you'll realise how little 1-5 really matter (an obvious mistake should be picked up by who you're pitching it to, assuming you're not sole PM and analyst). #6 is where money will be made and lost.

  • Walkerr's picture

    Great post from New Guy.

    I didn't have problems with the financials during my internship, but really understanding the business was not easy.

    Take your time the get to know the market, the players and the company.

    I always used to print a lot as well, even if it was just to see whether formatting was correct.

  • suchislife's picture

    Print it out, and ask your self does this make logical sense, most mistakes don't!! By doing this you can screen about 85% of mistakes out. FYI this is the technique that your MD most likely uses to catch yours!

    Remember that models make logical sense if they don't there is something wrong in there!

  • suchislife's picture

    And for grammar mistakes don't be naive!

    RULE OF THUMB #4: Always use F-7 (a.k.a. excel spellcheck)!!

    If you don't typos can sneak in given that excel does not mark your typos like word does!

  • In reply to suchislife
    Oreos's picture

    suchislife:
    And for grammar mistakes don't be naive!

    RULE OF THUMB #4: Always use F-7 (a.k.a. excel spellcheck)!!

    If you don't typos can sneak in given that excel does not mark your typos like word does!


    It's spellcheck in everything dude; outlook etc...

    .

  • Hayek's picture

    Printing out beforehand and stepping away from your work for a bit are both helpful.

    Also, you should hard code as little as possible and use formulas for everything beyond whatever data you originally entered.

  • Boreed's picture

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  • In reply to TonyPerkis
    Johnny Ringo's picture

    Eventus stultorum magister.

  • In reply to TonyPerkis
    Johnny Ringo's picture

    Eventus stultorum magister.

  • In reply to TonyPerkis
    Johnny Ringo's picture

    Eventus stultorum magister.

  • jack_donaghy's picture
  • Johnny Ringo's picture

    Eventus stultorum magister.