Modeloff – Guide to Competing
The biggest professional competition for finance students and professionals sponsored by Microsoft
What Is Modeloff?
There are many competitions, but the first major one in finance was the Modeloff competition. Financial Modeling competitions have been around for close to a decade now. Model off was the largest financial industry competition premised on Microsoft Excel.
Financial modeling competitions have been running since 2012, although not as popular as regular sports competitions.
Some of the Financial Modeling competitions include the famous Modeloff Financial Modeling World Championships, which was sponsored and funded by Microsoft. From 2012 to 2019, the Model off competition was held every year.
The competition began with an online round, and the final event was held in New York City or London.
Microsoft terminated the Modeloff competition in 2019. This led to the rise of similar competition in the Financial industry.
There was, however, criticism that more knowledgeable financial professionals who could use software other than Microsoft Excel should be included.
Nevertheless, the competition was the biggest and widely participated in by people from all over the world. This competition was an international event that brought thousands of candidates and students from over 100 countries. The contest boasts analytical skills and excellence.
The competition has seen positive feedback since its launch. This was due, in part, to the fact that it was a significant financial industry competition. With a competition prize award of $10,000, people from all over the world who were interested in finance participated.
After nine years of hosting the competition, the Modeloff halted. The competition ended in 2019, but a new one soon followed.
A similar competition known as the Financial Modeling World Cup competition was launched. It took off from 2020 to 2022 and has received a remarkably positive reaction. This competition has attracted a large audience since it first began.
Key Takeaways
- Modeloff, the largest financial industry competition, ran from 2012 to 2019, focusing on financial modeling using Microsoft Excel. It attracted participants globally and awarded a $10,000 prize.
- Candidates preparing for Modeloff needed to understand competition rules, learn Excel functions, master shortcut keystrokes, be familiar with finance formulas and accounting, and practice under time constraints.
- Learning Excel functions is important for participating in the competition. Candidates are required to familiarize themselves with the program's functions, emphasizing the importance of gaining a deeper understanding of both its functions and the overall user interface.
What is a Model off Contest?
This was the biggest professional competition for finance students and professionals. Microsoft sponsored the competition.
This competition was one of the biggest professional contests in the world. The entire competition structure was based on one of Microsoft's favorite products, Microsoft Excel.
Microsoft Excel is one of the Microsoft Office packages licensed by Microsoft Inc. It comes from the package called Microsoft 365, which consists of several other software programs. The programs in this package include Microsoft Word, Powerpoint, and Excel.
The software has an extensive application and is often used when handling quantitative data. This is because the software is robust and has evolved since 1987 to include other vital features.
Several professionals use this software, including Finance and Accounting professionals, Statisticians, and Engineers. The software is renowned for its wide application.
Although there are direct competitors to the software, like SAP, nevertheless, the software has a long history. Since the software's initial 1987 release, new features have been added and undergone improvements.
The consequence was the creation of robust software widely used in several vital sectors. In addition, the software was expanded to include operating systems for Android and Mac.
The competition heavily required the building of quantitative models using Excel. The spreadsheets that the participants built with Microsoft Excel show a grid of cells aligned in numbered rows. The computer program organizes data and allows for upgrading and manipulation.
The competition tested participants on their knowledge of the product, Financial Analysis, Investment Analysis, and Financial Modeling.
The question that may be asked by those unfamiliar with finance is, what is financial modeling? Financial modeling is simply a spreadsheet built in Microsoft Excel.
The spreadsheet forecasts a business's financial performance in the future. It touches on the historical, present, and future forecasts of the company.
Preparatory requirements for Modeloff
The need to prepare for the competition is the same as for any other competition. Several aspects demand the candidates be well-prepared in advance.
There is no question that different people prepare for competitions in different ways, but the general preparation steps that candidates most likely took are listed below.
1. Familiarize yourself with the rules of the competition
The candidates who intend to participate in the competition need to read and understand the rules of the competition. These rules were available on the official website of the competition.
2. Need to learn excel functions
The competition required the candidates to learn the functions of the program. Microsoft Excel, like any other software, has a steep learning curve. This means that there is a need to learn more about the functions and, generally, the program's user interface.
3. Need to know shortcut keystrokes
The Model off competition involved building financial models against time. This made the competition challenging, therefore. Shortcut keystrokes were an invaluable tool for the participants.
4. Familiarize yourself with finance formulas
The candidate must be acquainted with finance formulas and functions. For example, functions like NPV, IRR, and others.
5. Familiarize yourself with accounting
The candidates come from all over the world, and they are required to be acquainted with accounting formulas and documents.
Financial statements and financial modeling are complementary sides. Therefore, both sides are needed to construct financial models.
6. Practice under a time constraint
This competition measured candidates' knowledge, skill, and speed. The candidates were required to practice with time. This is true for almost all competitions.
The competition was tough, just as in the case of the Financial Modeling World cup competition that succeeded it. The candidates required dedication and focus on competing against other proficient participants.
The need for adequate preparation could not be more emphasized. It was advisable to practice creating financial models and simulating the competition for contestants.
What is Financial Modeling?
The question that many people ask themselves is what is a financial model. People who are not familiar with finance tend to ask this question.
Financial modeling is a skill set that is used to analyze and forecast. It is a skill that combines both accounting and finance tools to forecast its future. Financial modeling is crucial in finance because it aids investors in making sound investment decisions.
Note
In the Modeloff competition, participants were required to build these financial models based on the data provided by the host. The competition was based on the Microsoft Excel program.
The candidates created financial spreadsheets and forecasted companies. The competition allowed candidates to measure historical, present, and future performance.
Three documents make financial modeling possible. These Accounting documents are the Income Statement, Statement of Financial Position, and Statement of Cash Flow. These three documents are the foundation of building financial models.
An income statement is an accounting document that shows the revenue and expenses a company has incurred during a specific time period. This document is sometimes called Profit and Loss. It shows all the sales and expenses a company has incurred in a financial year.
The document is broken down into two parts Debit and Credit. Income Statements have a unique relationship with financial modeling. Income statements provide raw data that is required for making future predictions.
2. Statement of Financial Position
The second document important for financial modeling is the Statement of Financial Position. This document is sometimes referred to as the Balance sheet. This accounting document shows all the assets and liabilities a company has.
Note
Equally, the information found in this statement plays a significant role in creating financial models.
The statement of Financial Position displays Current and Non - Current Assets and Liabilities, which are essential for analytical purposes, for instance, Ratio analysis.
3. Statement of Cash Flow
The cash flow statement is another accounting document that forms part of the financial report. This document, like the Income Statement and Statement of Financial Position, is equally important.
In a nutshell, competition demands the development of financial models, but the development of financial models depends on the production of financial statements.
Financial Modeling World Cup Competition
Following the winding up of the Modeloff competition, another big competition replaced it. The Financial Modeling World Cup is a recently established competition for finance professionals and students.
This competition was established in 2020, and people have called it the successor of the Modeloff competition. The competition started in 2020 to 2022.
The Financial Modeling World Cup has multiple stages in the competition. At each level, competitors are required to solve three problems. These cases are presented as case studies with questions at the end. Similarly to its predecessor, the FMWC is premised on using Microsoft Excel.
The Financial Modeling world cup is a competition sponsored by a financial firm AG capital and Microsoft, as opposed to Modeloff. This time around, Microsoft partnered with another company to host the competition.
There are some similarities between the two competitions:
- Both competitions required competitors to be technically competent in Microsoft Excel. All candidates had to be knowledgeable about the program.
- Both competitions were designed for finance professionals, students, or individuals interested in finance. Additionally, participants were or are expected to build financial models.
- Both contests accepted participants from all over the world. For example, the Financial Modeling World Cup has winners from Australia and the United States.
Furthermore, the competition differs in the aspect of the structure. It is a series of small competitions. The participants are tasked to solve three problems in each of the stages.
The duration of the competition is two hours. Competitors are divided into groups based on their age. This is not the same as was in the case of the Model off competition.
During the competition's debut in 2020, the competition saw a positive response. Since then, there has been huge participation by people from all over the world.
The following are the winners of the Financial Modeling World Cup:
- In 2020 Joseph Lau of Australia won with 5535 points in total.
- In 2021 Diarmuid Early of the United States of America won with 11925 points.
- In 2022 Laurence Lau of the United States of America 5937 points.
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