Financial Modeling Best Practices: Color Conventions
What are color conventions that you guys follow to make your financial models idiot proof?
There are so many links and assumptions that I am finding it difficult to standardize.
Right now I have:
Hard coded inputs= blue with a background color
Drivers such as '% of revenue'= green
links to other worksheet in same workbook=black
referencing from other workbook=red
Financial Modeling Text Color Codes
First - it is important to note that each firm / group could have its own preferences - when working you should simply adhear to that format. If practicing modeling - the most important thing is to practice consistency.
Several users shared their preferences / experiences below:
I'd just have one colour for all hardcodes, one colour for all formula, one colour for links within same worksheet, one for link to external sheets and one for hardcodes that aren't obviously hardcodes (basically non assumption stuff), then footnote the latter as well and explain why you did smthg non standard in the spot.
Hardcode = Blue
Formula = Black
Links to other worksheets within the same file = Green
Links to other excel files = Green and sometimes Purple
Blue = input
Black = formula
Green = link to other sheets
Purple = links to other excel files
red = fix this shit.
User @rufiolove", a private equity associate, pointed out that Red can be used to indicate an important number:
Don't fuck with this input because it is important and there for a reason / critical plug.
Partial inputs (e.g =1*E5) are also sometimes formatted differently, but there's no universal convention for that.
Model Formatting Summary
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