Excel, Google Sheets, and other tools of the trade


Hi Monkeys:

So I've been out of finance game in a direct capacity for a few years now (made a transition to software development). I'm assuming the tools of the trade for everyday work are largely the same as they were when I was in IB / PE (e.g. Excel for analysis and Powerpoint for decks / presentations), but I'm curious if anything has changed, or if there's anything you wish would change. Specifically:

  • Does anyone use Google Sheets? Awhile back I would have laughed if you suggested I use Google Sheets for spreadsheet work, but I've been using it for some ad-hoc analyses and it's actually getting pretty good. Google makes better software in my opinion, and really the only reason I still use Excel is because I have all the old Excel shortcuts burned into my muscle memory.

  • Are Factset and CapIQ still the data sources of choice? Are you guys still manually spreading comps (e.g. pull the SEC filing and tab / highlight the sources) or is it just a CapIQ download at this point?

  • When you're building models, do you build most models from scratch, use templates, or some combination of both?

  • Microsoft has recently given software developers a lot more flexibility when it comes to integrating with / customizing Excel, and Google gives developers a lot of custom functionality options for Sheets. Do you guys think banking / PE specific functionality would interesting? I'm thinking generate a starter Sources & Uses or debt schedule with a click, calculate working capital ratios and other metrics with built in formulas, verify certain calculations are correct, apply banker style formatting automatically etc.

  • When it comes to general business info (e.g. business descriptions, board of directors, office locations, etc.) is it still mostly Google searching and CapIQ?

  • On the sourcing side, are any of you using sales and marketing tools like Salesforce (with add-ons like Clearbit to automate data entry) or is it mostly spreadsheets and Outlook contacts?

Comments (25)

May 12, 2019 - 2:02am

Hey labanker, I think you deserve a response...heck, everyone does. We're listening, sorry about the delay ...my best guess at places on WSO that could help:

  • Why do most people suck at Excel? Microsoft Excel: the lifeblood of 21st century finance and business. A phenomenal spreadsheet tool ... (sometimes) in the click of a button (when it's not crashing). Most of us probably use excel every single ... "formulas" for spread-sheeting. However, what I can't determine is whether or not poor
  • How to Not Be a Tool going through the reps of applying, I made a master spreadsheet on Excel (you're going to be using ... a lot of Excel over the coming years, so might as well become chummy now). Mine was structured similarly ... point was, and any other relevant notes; ii) About the firm- description of the business and
  • Excel: how to display pulldowns from other workbooks In book #1, I have a pulldown menu with the validations on the same sheet. Pretend the pulldown is ... like to display the pulldown results in book #2, but it's giving me #VALUE errors. how do i fix ... this? excel 2013 ...
  • Excel Help!- Cells do not update when they reference another Excel file links reference the absolute path of the linked spreadsheet Check if sheet updates on a coworker's ... an issue between Excel 03 and 07. The sheet was created in Excel 03, but when it was opened in Excel ... It's not unusual for us to run a model that references back to 20+ other Excel
  • Cap IQ Formula Sheet a powerful tool made even more powerful by its Excel plugin. Check out their helpful cheat sheet of popular ... "millions of data points from millions of sources." Similar to other market data sources such as ... such as the following: CapIQ Client Services In addition to the cheat sheet above, the
  • Complex Task in Excel Having exhausted many other options, I have turned to the resident Excel monkeys to see if any of ... spreadsheet, I need to match all of the 4000 names with their own names from the 9000-name sheet, in two ... 9000 includes all of the company names on the 4000-name sheet plu
  • How to Convince My Boss to Include Excel Modeling Into the Job? on how to incorporate some sort of financial modeling (Excel) into the job function, that would be ... analyzing their cash flows, balance sheets, etc. Some site inspections and I may be getting the life co. ... loans in my portfolio pretty soon. But overall, pretty basic work once you get the hang of it. This is ...
  • More suggestions...

Fingers crossed that one of those helps you.

Most Helpful
May 14, 2019 - 8:35am

Hate to disappoint, but the tech stack that the finance world uses is still roughly the same. As you’d suggested, excel and PowerPoint are still the only major softwares used. I’ve never heard of a banker or PE professional using Google Sheets and I think a lot of it has to do with how excel does the job well and, even though google sheets has more robust functionality, it does the job good enough and google sheets isn’t a step change improvement for what a banker uses spreadsheets for.

Most of my modeling is built starting with a template and making adjustments if necessary. Building a model from scratch is a good exercise to learn how different drivers affect valuation, but is fairly inefficient.

I do believe there are opportunities to help improve the CRM tools and finance professionals use to manage their rolodex, but I also believe that excel does a good enough job. My firm uses an internally built crm system that is super clunky, but it meets compliance standards etc.

May 15, 2019 - 1:56am

I've heard the CRM idea a few times. Good to know. I know email / staying on top of contacts can really bog people down, particularly senior people.

I think a solid solution in this vein would automate a lot of the "lower level" communication (scheduling meetings, sending / requesting status updates, basic intros, etc.) freeing you up to focus on higher level, more important communication.

Think it would also have to be largely Outlook based, ideally working in background so you don't have to log into some other app to manage your workflow.

May 17, 2019 - 4:14pm

Yeah come to think of it, CRM systems really suck at investment firms. Excel is a quick and dirty method to have a long list of contacts, but that doesn't do a good job tracking engagement with each contact. Tangentially, if you could build an outlook/gmail plugin to help automate relationship maintenance and setting up meetings (there are bots that do that like clara.ai) that'd be very useful as well.

May 14, 2019 - 2:59pm

I think ultimately what you're driving at is is there an opportunity in this sector. My guess is its really hard to get banks / pe shops to spend on incremental services and some of the things already exist / add minor incremental value

  • don't use google spread sheets, doubt anyone does

  • CapIQ yes (can't speak to factset). Still need to spread comps. I dont think this will ever change. Its imperative that someone actually reads/double checks numbers.

  • scratch, maybe temp

  • I think things like this exist on a plug in basis but not sure how valuable would be

  • There is a company that does this, Made Market and Pitchbook, that do this

May 15, 2019 - 1:45am

Wow, still manually spreading comps! I thought just maybe that tradition would have died by now.

I figured most people don't use Google Sheets / GSuite, but in tech / startups it's ubiquitous so thought maybe there was a chance it trickled in just like the casual dress code did.

Made Market looks interesting. Is that software seeing wide adoption? What does pricing look like? Does it integrate w/ Outlook?

I hear you re: the modeling helpers. I never really liked templates but I know a lot of people think modeling from scratch is inefficient, so I was thinking of something that gives you the flexibility and control of modeling from scratch but the efficiency of a template. From blank spreadsheet to full blown bespoke model in a half hour. Something like that.

May 15, 2019 - 2:27am

Yea - just think of all the noise that can be in numbers and then how much money is on the line and then the cost is just time, typically a junior person.

High level stuff you can take a capiq or bloomberg number - but when you're really making a decision you're gonna want that stuff doubled checked.

If anything its crazy to think that it wouldn't be checked - upside/downside risk is massive.

May 14, 2019 - 9:26pm

Nobody uses Google. When you compare the cost of the employee to the cost of teaching them something new the cost/benefit analysis still skews hugely Microsoft.

I had to google capital IQ, and S&P is a major vendor for us. We do use FactSet, but last year they failed to deliver to the point that they jeopardized what is probably one of their 50 biggest accounts for failing to get data for me. After my boss read them the riot act they put a team of Thai engineers on it and ultimately delivered. We generally prefer Bloomberg, and will go to Morningstar for AM specific information.

I generally see somebody I know on TV on Bloomberg/CNBC etc. once or twice a week. This sounds cool, until I remind myself that I see somebody I know on ESPN five days a week.
May 14, 2019 - 10:27pm

I work in tech now but use a mix of Google Sheets and Excel. I use sheets primarily for stuff that needs to be collaborated on (e.g. lists, contact trackers, etc.) and excel for more modely stuff that requires calcs.

I do like Google Docs more than MS word and don't really use word anymore but not entirely sure why, probably something to do with the easier autosaving plus central repository.

May 15, 2019 - 1:49am

Yeah, in my experience most Google products are just a lot more seamless than Microsoft's. They anticipate common use cases better and yes, their collaboration / sharing story is MUCH better than Microsoft's.

Keyboard shortcuts in Sheets still need some work though.

May 15, 2019 - 7:19am

Interesting thread. Maybe I'm just the curmudgeon here but I've always been highly skeptical of attempts to modernize IB and PE processes. For a few reasons:

  1. Functionality often does more harm than good. The math behind modeling and financial data analysis is already so simple, and anything additional may be of little value and runs the risk of making the interface tougher to use.

  2. Process improvements are focused on improving precision and granularity, when those things rarely matter. For example, I've noticed a trend of IBs and consequently, service providers to IBs, offering increasingly detailed analysis of the shareholder base. Things like shareholder churn and getting really granular on which type of funds hold your stock, and how that type changes over time. The problem is, the valuable portion of this information is the very general part (i.e. "you've become much more of a value stock in the last decade so there may be more scrutiny of your ROIC now") where as the granular part ("GARP funds moved from 10% to 11% and quant funds moved from 7% to 8%" and so on) is useless and in many cases actually damaging because it misleads. So what the bank needs is better qualitative interpretation of basic data, rather than more deeply granular quantitative solutions. But the bank is offered (and frequently adopts) processes that lend themselves to automated solutions because it creates the appearance of process improvement.

Sorry if that example departs from what you're focused on, but it's an example of a broader problem of functionality often missing the point.

Also, when I started IB in 2010 everyone was using Excel '99 with no issues. Now its 2019 and everyone is using Excel 2010, and I don't see that it does anything better than Excel '99 did.

Still interested to hear what improvements are out there. Just trying to shed some light on the trends I've seen and why it breeds skepticism on my part.

May 15, 2019 - 1:25pm

Funny you mention Excell '99. When I started as an analyst we were using Excel 2003 and in my opinion that was the best version of Excel (it was before they introduced the ribbon).

I agree wholeheartedly that it's usually a few higher level concepts that matter in any given deck / model / pitch. I guess what I've been thinking about is what tools can you build or what processes can you improve so that you can focus more on those higher level, often qualitative insights. And maybe get home at a reasonable hour :)

May 16, 2019 - 10:17am

Oh the ribbon. The motherfucking ribbon. It's a crime against humanity.

I reviewed the list of bullets from the OP and roughly speaking, they fall into two categories: improving on the modeling function in Excel and improving on the data pulling / comp sreading type functions that rely on CapIQ and Factset.

I would generally say the latter is more of an opportunity for improvement. My point with Excel '99 is that they kept coming out with new versions and nobody felt an ounce of improvement; takeaway being that maybe there's nothing left to improve there.

Reason people still hand spread comps is that the automated data isn't reliable. CapIQ's EBITDA number for example, is often useless. Thankfully they give you the ability to click on the number so they can show you exactly why its useless (i.e. how they calculated it) but at the end of the day, the accuracy (but not precision) of the number is important enough that its worth a hand spread.

May 15, 2019 - 4:03pm

When you simplify data you lose information. Investment bankers charge a premium because they are as close to the source as possible and make custom adjustments, have a proprietary approach/method, etc., when it comes to evaluating business performance. While, conceptually, the underlying mechanisms are the same, choosing the right investment bank (and their process) is like making the decision between choosing what type of language to code in. The tech stack you use for software development (Atom Notepad, SDK, etc., on a PC or Mac) is pretty much the same as it has been for decades too. The difference is that you are pitching your specialized, idiosyncratic, knowledge.

In other words, focusing on the tools of the trade themselves (e.g. excel, powerpoint, etc.) is missing the point. Just as you probably use Note++ or Atom (which are both pretty simplistic), the value add is not that they replace the interaction with your code (Note++ isn't trying to automate your coding), but that they make interacting with your code much easier. This is why the excel enhancement (plug-in) space for bankers is fairly successful, while excel replacement apps aren't (at least to investment banks). Just my opinion.

May 17, 2019 - 4:21pm

Now that I think about it, one really viral software that has been gaining popularity amongst investment banks is bamSEC. bamSEC allows you to easily navigate SEC filings from an intuitive UI and lets you highlight text and automatically creates links that will bring clickers directly to the same spot that you highlighted. This helps tremendously when auditing/reviewing work. I think this is a super interesting concept that has applications outside of finance and would be super helpful in improving the efficiency of heavy internet users (software sales, bloggers, internet marketers etc.)

May 17, 2019 - 5:58pm

From personal experience, the FactSet SEC filing navigation tool is super clunky and took forever to load. bamSEC works very fast and is uniquely intuitive. Every banker on my floor had an account.

Additionally, I could also see why some smaller firms would want to use bamSEC; they could avoid paying the larger cost of buying a comprehensive package from bloomberg or capiq etc.

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