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April 30, 2024
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
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+Bonus: Get 27 financial modeling templates in swipe file
Macabacus helps - can colour code the hard codes etc. in one swoop.
Tracing precedents with Macabacus to see what is really driving the core of the model. Data tables to sensitize key variables can help determine the model shortfalls as well.
Keep seeing people reference Macabus. Do most PE shops not pay for FactSet plugins / a non-crap alternative? Autocolor and tracing precedents should solve most of this, as the above commenters noted.
It really depends on firm.
I know I'm a tad bit late, but I think most shops at the UMM to MF stage have these all included, or at least that's the general sense I've gotten from my own group and others that I've interacted with. FactSet, Boost, and Think-Cell were all standard, but I remember our team had to actually request Macabus. Kind of odd - in my opinion it beats out all the others, making them more-or-less redundant. CapIQ and Upslide were beaten by it as well, but that just may be tapered to the kind of specific work I'm doing.
Long story short, your firm should provide these. Employees should never be responsible for picking up the tab of enterprise-grade software additions, especially when said programs cut down man hours and personnel times to the extreme.
FactSet isn’t really ‘worth it’ if you’re not regularly using their data as well. Macabacus is fine for just boosts, and it’s multitudes cheaper.
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Been using TTS macros since my banking days. Ctrl + Shift + T until my eyes bleed
Use one of the excel plug-ins suggested above and then sit down tight and spend some time on it, models are not rocked science and you will figure it out
Here's what I *generally* do as a 2nd year VP (who still gets tasked with building models occasionally...).
I tend to only give the assumptions / input tabs a quick glance to familiarize myself with the different assumptions, but I don't really start there. I think that starting with the assumptions when I don't really know what drives the actual business / P&L is a waste of time and has no context. So I'll start at revenue. What drives revenue? Then I work backwards to figure out the operating build, the key drivers of revenue / unit economics, and what increases / decreases revenue. This way I now have some sort of foundation knowledge to work from.
I'll then go through costs in a similar fashion. While I am doing this, I create my own tab with a high level "output" where I build my own P&L to make sure what's actually happening in the model is correct as I flex different assumptions and toggles, and also making sure everything is summing and totaling up correctly. I've found creating my own scratch work tab extremely helpful.
Once I've gotten a good sense of the P&L and the build to EBITDA, I'll generally focus on capex and the capital structure, depending on the business. Another high priority is making sure the returns capture the correct cash inflows/outflows. I've seen plenty of times where the initial equity investment number is incorrect / earn-outs aren't captured / debt not flowing properly / terminal value calculation is wrong / etc.
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