Financial Models

This publication explains an advanced method of using data tables for sensitivity analysis in financial models. Allows seeing key outputs or short financial summaries for several scenarios at once. Any input change is reflected immediately.

Data tables is a powerful tool to analyze sensitivities in Excel financial models. A conventional data table is a one- or two-dimensional table showing the results of a calculation (model outputs) at various model inputs in the headings of rows and/or columns of the data table. In the attached files we will study the essential principles of data tables. But the abilities of data tables go far beyond that and in this tutorial I will introduce and explain some non-conventional ways of using data tables. In the first part I will first explain the basics of data tables and will show how to create them. I will then demonstrate how to use data tables to create: a) a summary table showing the key metrics (gross profit, gross profit margin, etc.) b) a high-level cash flow summary for each scenario (showing annual volumes, sales, costs etc.) c)a "tornado" chart which shows the effect of every input change on the model's outcome Data tables make the above visuals fully interactive - you can change one of the inputs in any scenario and see the effect of this change immediately in the outputs (tables and charts). This functionality does not require the use of macros. This publication is followed by its second part which explores this topic further and covers: a. Linking several complex data tables to one source model 2. Locating the model and data tables on different worksheets 3. Creating a check box to switch data tables on and off 4. Drawing a waterfall chart