Financial Models

This is an extended version of my publication on advanced methods of using data tables for sensitivity analysis in financial models. The methods allow seeing key outputs or short financial summaries for several scenarios at once. Any input change is reflected immediately.

This is the second part of my publication explaining an advanced and little-known method of using data tables for sensitivity analysis. 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. In the first part of this tutorial I have explained the basics of data tables and introduced some non-conventional ways of using data tables. We have: 1. Studied how to create them step-by step 2. Created advanced tables to show brief and expanded summary of key project parameters 3. Built a tornado chart This part brings our data table techniques closer to real life of financial modeling. We will: 1. Learn how to link several data tables to the same model without cross-conflicts and interference with the inputs at which the model is displayed 2. Link models and data tables located on different worksheets 3. Create a check box to switch data tables on and off (as an alternative to turning off automatic recalculation of data tables 4. Draw a waterfall chart using data tables. Waterfall charts explain the move from one scenario to another in terms of the effect of every input’s change