Spreadsheets allow us to perform dynamic and complex calculations while offering rich in-built functionalities with the goal to process, calculate, analyze and understand numbers in every aspect. They allow us to easily change parts of the calculations and use complex methodologies to get the result of our calculation in no time. As such spreadsheets have become valuable tools in business and they have become essential for the work of finance professionals in today’s worlds.
At eFinancialModels we focus on Excel Spreadsheet Templates for the main reason that they are the number one tool used by finance professionals today. Our goal is to provide a repository of quality Excel spreadsheet templates which are available to anybody interested.
What are Qualities of Good Excel Spreadsheet Templates?
1. They solve a problem
Each financial spreadsheet serves a purpose, otherwise, we wouldn’t spend hours of our time creating them. Excel spreadsheets normally solve information problems: We either do not know something or we do know but we don’t know why. Therefore each excel spreadsheets has been created with a purpose to solve an information problem. In Financial Modeling common problems Excel spreadsheets are solving are the following:
- What will be the cash position end of year?
- How much profit do we expect next year?
- What is the value of our company?
- How much funding do we require?
- How much return can investors’ expect?
- How much will the equity stakes become diluted when taking on new investors?
- What happens if some of our key value drivers (e.g. revenue growth, profit margin) changes to the better or the worse?
- What will be the relevant bank ratios when we take on new debt finacing?
- When will we achieve breakeven?
- When do we achieve a payback on our investment?
You get the idea, there are many problems to solve in finance and in business
2. Time Savings
Good spreadsheet templates allow significant time-savings as they leverage existing work and make work that has already been done reusable. This is especially the case if the spreadsheet template being used is very similar to the problem we are trying to solve. Instead of having to develop the spreadsheet from scratch, one can simply enter the new assumptions and the model will do all the work for you.
Good spreadsheets contain deep technical and/ or industry know-how. They focus on the right questions and analysis and provide deep insights into why the result was achieved.
4. Technical Correctness
In order to be relied upon, an analysis needs to be technically correct. Unfortunately, errors are very common in Excel spreadsheets and sometimes the errors are not necessary inside the models but in the way they are used or when feeding the spreadsheets with wrong information. Garbage in will lead to garbage out! Nevertheless, a good spreadsheet template needs to be technically correct.
When coming up with a result, very often the question is why. This requires us to recheck the calculations made in the spreadsheet and figure out which assumptions are mainly responsible for the outcome. Auditing a spreadsheet becomes much easier when the structure follows a stringent logic and if all calculations are disclosed in a transparent and traceable manner. So good spreadsheets avoid black box calculations, such as e.g. sometimes used in Macros. Better to keep things simple, and show the calculations step by step so the spreadsheet becomes easier to read and understand.
At eFinancialModels, we and our Vendors every day try very hard to meet these requirements and offer our readers access to best in class financial model spreadsheet templates.
Free Spreadsheet Templates
The three statement model provides a simple template in Excel to forecast the three financial statements over the next 5 years: Income Statement, Balance Sheet, Cash Flow Statement
This model calculates the Weighted Average Cost of Capital (WACC) which can be used as discount rate for any DCF calculation.
This simple DCF model in Excel allows you to value a company via the Discounted Free Cash Flow (DCF) valuation method. The discounted cash flow valuation model uses a three statement model to derive free…
Advanced Spreadsheet Templates
This financial modeling provide the essential financial information for strategical decision to provide the company growth
This financial model can be used to evaluate the financial feasibility of a real estate development project and present it in investor grade quality to your partners. There is everything in there which is needed…
Dynamic financial model for calculating cash splits to sponsors/investors based on various IRR hurdles getting reached.
Test out various assumptions to see if it makes sense for you to open a franchise or multiple franchises. Includes assumptions specific to the operations of a franchise.
This financial model attempts to give the user a full scope of starting a 250 bed (adjustable) hospital. It will allow for all revenue and cost assumptions at a very complex level that is fully…
This Financial Model for Mobile Apps provides an easy way to forecast the financial performance for an App sold in the App Stores and deriving revenues from paid downloads, advertisement and subscriptions.
The eCommerce Valuation Model forecasts the expected financials for a webshop or eCommerce business and calculates the resulting DCF value.