Hi,
I'm relatively new to this, but feel like my modeling skill is not really improving. People keep telling me that it improves with repetition, but I don't think I'm getting better at it between repetitions.
How long after you started in banking did you start to feel very comfortable with modeling? What are some tips I can adopt? Sometimes I feel like I'm just relying on template or copying/pasting without really knowing how to check things...
Thanks
You should try to take a step back and think about what you are modeling / trying to accomplish vs. just mechanically following a template or formula.
Maybe try to write out a description of each step you are taking to explain (at a 8th grade level to make sure you fully understand the purpose of each step)
Build your own. There is no better way to learn than to build. Doing so will not only cause you to better understand the model, but also the transaction you are modeling.
The more you ask "why" the faster you'll improve. Understand the reason behind everything that's done. Why this number and not that number. If it doesn't make intuitive sense you're doing something wrong. Don't do step 4 until you're 100% clear on why steps 1-3 were done.
I am not a math guy by any means (shocking?) but I got into the gist of modeling by working thru understanding what each line item etc really means in the grand scheme of things. If it helps, write down in a comments section what each segment of the model represents and how it ties into getting to the final goal... assuming your gripe with modeling is the conceptual bit.
If it's the excel portion just be a machine and practice shortcuts etc you don't get over and over with the goal of efficiency in mind
"Sometimes I feel like I'm just relying on template or copying/pasting without really knowing how to check things..."
If I'm understanding this correctly, this right here is your problem. A template already has pre-built linkages to model out things like a DCF, target price, etc depending on the goal of said template. In such a case you're just entering numbers into a spreadsheet without any real understanding of how they are being used to drive other outputs.
To improve, you need to build a model form scratch, or at least develop a deep understanding of the templates used. I recommend the former. Start with some easy financials like those of REITs, and work your way up to more difficult financials such as those that belong to conglomerates or tech companies as you get better.
It would also have been helpful to know what exactly you feel you are lacking in your modelling skills. Is it the constant presence of failed balance sheet checks? Lack of granularity on revenue/cost drivers? Or something else entirely?
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