Transcript (Edited for Clarity)
Introduction
Well, it sounds like everyone is here. Super. Let’s get started.
We’ll go for about an hour today. I want to show you some really great skills to check and review a financial model. If you ever look at a financial model, you’ll want to know that it’s working, and if you ever need to check a model, you’ll want to confirm it’s doing what it’s supposed to do.
Have You Ever Checked Someone Else’s Spreadsheet?
Raise your thumb, send me a note, or drop me a direct Slack message if you’ve ever had to check a spreadsheet that you didn’t build. Anyone done that before?
Some hands are going up for sure. It can be very stressful to check someone else’s spreadsheet or financial model. And that’s exactly what we’re going to tackle today.
Why This Session Matters
I want to show you some great tips and skills for checking a model, skills I call the Swiss Army Knife for Error Detection, a session I’ve led globally.
Why? Because financial models support the entire global financial system. Modeling is one of the most important skills in accounting and finance, but it can be stressful to check someone else’s model.
Why is it stressful? Because if you bless it, you own it. It becomes your responsibility. But if the model has errors (and many do), the best thing that can happen is that you find those errors. If you find them, it’s not your problem because you didn’t bless it. But once you approve it, it’s yours.
What You’ll Learn Today
I will show you practical Excel skills and tips so you can confidently check someone else’s spreadsheet. I hope you’re using Excel, learning keyboard shortcuts, and building your skill set, because I’ll show you how to review a spreadsheet properly.
Who I Am
This webinar is hosted by me—I’m Ian Schnoor with the Financial Modeling Institute (FMI).
I’m based in Toronto, Canada. Has anyone been to Canada or Toronto before? Raise your thumb if you have. No? I’d love to visit the Gulf region again, especially Bahrain, which I’ve heard is beautiful. If I do, hopefully, I’ll meet some of you in person at an event at the NGN Center.
My Background
I’ve spent my entire career building, teaching, and working with financial models.
- I am currently the Executive Director of the Financial Modeling Institute (FMI), the world’s only financial modeling accreditation organization.
- I founded and ran a financial training company globally for 20 years.
- I sold that company to a US private equity firm in 2023.
- I created the Financial Modeling Practical Skills module for the CFA Institute, now a popular component of the CFA program.
Has anyone here completed or is thinking about the CFA program? If you are, feel free to reach out. I earned my CFA charter many years ago, and it’s a great program.
I also teach Advanced Financial Modeling at Queen’s University in Canada, and I’ve been deep in the world of financial modeling for a long time.
About FMI
If you’re new to FMI, let me share quickly:
- We are the world’s only financial modeling accreditation organization.
- Our candidates go through rigorous financial modeling curriculum and exams.
- It’s not just about watching videos; it’s about building a full three-statement financial model from scratch in our Level 1 AFM program.
- The exam is Excel-based, four hours, and offered quarterly.
Those who complete it become excellent financial modelers. If you want to level up, check our website for details.
Why We Check Models
Whether you built the model or someone else did, you need to:
- Ensure it can be relied upon
- Confirm it has no errors
- Maintain credibility
- Check for completeness
I have a list of 10 practical tips for checking a model. We’ll cover around 6–7 of them today, and you can review the rest in the slides afterward.
The Model We’ll Review
Today, we will review a financial model from Henderson Manufacturing Company, the type of model you would build during the AFM exam.
It includes:
- Cover sheet
- Executive summary
- Assumptions page
- Scenarios page (upside and downside cases)
- The model itself: Revenue schedule, Cost schedule, Income statement, Cash flow statement, Balance sheet
The Swiss Army Knife for Error Detection
Here’s how you can confidently check any financial model.
1. Drone View
What it is: Zooming out for a high-level perspective.
Why: Normally you only see a small window. Zooming out to 30–40% helps you see structure, hidden data blocks, and layout.
How:
- Use ALT + W + Q or ALT + V + Z to adjust zoom.
- At 30–40% you instantly see if there’s hidden data or layout issues.
2. Camouflage Detection
What it is: Finding hidden white-text values.
Why: People sometimes hide data in white text.
How:
- Press CTRL + A to select the entire sheet.
- Change the background color to gray.
- Hidden white-text values now appear clearly.
- Undo afterward to return to your working view.
3. Landmines: Hardcoded Values
What it is: Identifying cells with hardcoded numbers.
Why: Hardcoded values can break models if assumptions change.
How:
- Press F5 > Special > Constants to highlight hardcoded values.
- Review and replace them with dynamic, reference-based formulas.
4. Formation Consistency
What it is: Checking consistency across formulas.
Why: Every formula in a row should be the same for consistency.
How:
- Switch to formula view with CTRL + ` or ALT + M + H.
- Use CTRL + \ (backslash) to highlight cells in a row with formula differences.
5. Navigation Efficiency
What it is: Fast navigation across model sections.
Why: Jumping between sections saves time.
How:
- Use ALT + V + V to open Custom Views.
- Save views like “Revenue Schedule” or “Income Statement”.
- Later, jump instantly without scrolling.
6. Using the Watch Window
What it is: Monitoring key outputs while testing assumptions.
Why: Track how changes in assumptions affect EBITDA, Net Income, etc., in real-time.
How:
- Use ALT + M + W to open the Watch Window.
- Add key output cells.
- Adjust assumptions and watch results live.
7. Navigating Precedents
What it is: Quickly tracing linked cells.
Why: Manually tracing links is slow.
How:
- Use CTRL + [ (left bracket) to jump to a precedent cell.
- Use F5 + ENTER to return to your original position.
Q&A and Audience Interaction
As we went through the techniques, a few common questions came up:
- “Will the recording be shared?”
Yes, the session is recorded. You will be able to watch it later.
- Distractions during the session
No problem at all. Everything is recorded, so you can review afterward.
- Questions about CFA
Some of you mentioned plans to pursue the CFA program. Feel free to connect. FMI’s Financial Modeling Practical Skills module is now included in Level I.
- Other tips from participants
A few of you mentioned you’ve seen hardcoded values in spreadsheets before. That’s exactly why error detection skills are critical.
Recap of Key Lessons
We covered a lot of ground. Here are the core points again:
- Drone View — zoom out for structure and hidden data.
- Camouflage Detection — find hidden white-text values.
- Landmines — spot and eliminate hardcoded inputs.
- Formation Consistency — check that formulas are consistent across rows.
- Navigation Efficiency — use Custom Views to jump between sections.
- Watch Window — monitor outputs in real time.
- Navigating Precedents — trace links with CTRL + [ and return with F5 ENTER.
Each of these is quick to apply and gives you confidence when reviewing models you did not build.
Final Remarks
Checking a financial model is about more than reviewing numbers—it is about protecting credibility. Once you approve a model, you own it. That is why it is critical to find and fix errors before signing off.
Thank you for joining, especially during Ramadan when many of you are balancing other commitments. I appreciate your time and focus.
Thanks also to Iman and NGN for supporting this event and for your partnership with FMI. If I have the chance to visit Bahrain again, I look forward to meeting many of you in person at the NGN Center.
Until then, I encourage you to apply these skills in your daily work:
- Enjoy your modeling.
- Happy modeling.
- And continue building credibility by checking carefully.
I look forward to seeing you in future FMI sessions.
