Financial Modeler's Corner
00:38:34 · Giles Male, Paul Barnhurst
[00:38:34] S1: No. It's great. And it's a nice real world answer because I think, like, my textbook answer every time on this, if you pick up a messy model is, oh, you should just rebuild it. Know? Oh, wait. Start from scratch. Don't try and just use what's there. But actually, the reality for a lot of teams and individuals is you don't have the capacity to just stop for three weeks or whatever. You might argue it's a day now with AI, but you don't have that time to just stop and start from scratch. Sometimes the reality is you've gotta make something work to the best of your ability with as much confidence as you can. [00:39:08] S0: Yeah. And so it's just a real... It was a really good learning journey, and it got better and better as we went. And I felt like I at least handed something over that could support the business even though there were some areas that definitely needed to be rebuilt. [00:39:22] S1: And you described something which has always been a bit of a litmus test for me, which is when somebody goes, just explain to me how you got to that cost of sales number. If you don't fall apart when you're asked that and you're on the model and you can go, yep, it's here. Like, there's the logic. This is how it flows through. That's kind of a litmus test for me for for good modeling or one of them at least.
00:39:22 · Giles Male, Paul Barnhurst
[00:39:22] S1: And you described something which has always been a bit of a litmus test for me, which is when somebody goes, just explain to me how you got to that cost of sales number. If you don't fall apart when you're asked that and you're on the model and you can go, yep, it's here. Like, there's the logic. This is how it flows through. That's kind of a litmus test for me for for good modeling or one of them at least. [00:39:42] S0: Yeah. No. I hear you. It's asking them to... When they can explain assumptions and you can tell they really understand the business, you get much more comfortable with the model. I think the second one is when you ask them a question and you could see the models in some kind of order where you can follow what they're doing, that's another one that you get. You automatically feel more comfortable. Doesn't mean it's perfect. You could be wrong, but it increases that comfort level that they know what they're doing. [00:40:09] S1: Alright. Similar question. What's the most unique thing that you've ever seen being built in terms of a model or Excel?
00:40:09 · Giles Male, Paul Barnhurst
[00:40:09] S1: Alright. Similar question. What's the most unique thing that you've ever seen being built in terms of a model or Excel? [00:40:16] S0: Oh, that's a good question. You know, so my not that I build, but one of the favorite things I've seen, if anyone's followed them, I always love. I used to share it in some of my chaining. Have you ever seen the Japanese artist? What's his name? He's an artist that he sold some of his paintings. He would do complete paintings in Excel. So we were sold for, like, 70,000. Landscapes and different things where he do the entire artwork in Excel. So not me. And I'll have to find his name. I wanna go look at Yoshi's son, but if you just type in Japanese Excel spreadsheet artist, you'll find it. And it's fascinating some of the pictures. So that's probably one of my favorite because I'm like, wow. Who would have thought that you could make a career? And he had made a career. If you sold something for 70,000, that's a career out of painting in Excel. Like, just bizarre. [00:41:09] S1: I've never heard that before. That's really, really cool. There's a guy called... I've forgotten his name. He was at the Global Excel Summit a few years ago. A guy called George who builds, like, the, like, the orbit of planets within the solar system in Excel. Not sure if it's VBA or something else. That's probably the craziest one I've seen, but I think I think yours is cooler, actually,
00:41:09 · Giles Male, Paul Barnhurst
[00:41:09] S1: I've never heard that before. That's really, really cool. There's a guy called... I've forgotten his name. He was at the Global Excel Summit a few years ago. A guy called George who builds, like, the, like, the orbit of planets within the solar system in Excel. Not sure if it's VBA or something else. That's probably the craziest one I've seen, but I think I think yours is cooler, actually, [00:41:29] S0: artwork. Yeah. There's a lot of crazy. I mean, some of the games, if someone knows there's some Easter eggs where there's a spy hunter in an earlier version of Excel, there's a flight simulator in Excel, you know, just some fun stuff. Doom. They actually created a doom game. If anyone... If you played the first person shooting game when you were a kid, doom, that was created once. I think they call it the hall of tortured souls, which we've all felt that way using Excel. Let's be honest. Rapid fire incoming. 20 questions. Yes or no answers. No hedging allowed, circular references, VBA, the future of Excel, and more. Let's find out what our guest really thinks. [00:42:09] S1: Circular references. Yes or no? [00:42:11] S0: No. [00:42:12] S1: VBA? No. Lambdas in Financial Models? [00:42:18] S0: I'm gonna say no at this point. There are exceptions, but I'm gonna say no. [00:42:22] S1: External workbook links? [00:42:25] S0: Do as I say, don't do as I do. I've used a few, but the answer is no.
00:42:25 · Paul Barnhurst, Giles Male
[00:42:25] S0: Do as I say, don't do as I do. I've used a few, but the answer is no. [00:42:29] S1: Okay. Should... I know I know what your answer is gonna be to this. Should modelers primarily use keyboard shortcuts? No. Should modelers always be print ready? No. Models, maybe not the modelers, the models. No. Are merge cells ever acceptable? [00:42:46] S0: Yes. But you'll go to hell according to many of my guests. [00:42:50] S1: Yeah. Yeah. Yeah. Including me. Should financial modelers learn Python in Excel? No. Should they learn Power Query? Yes. Should modelers learn Power BI? [00:43:05] S0: I I guess technically, the answer is should. You could say yes to all these, but I'm gonna say no in the sense of I don't think it's necessary. [00:43:12] S1: Should every financial modeler be able to build a fully integrated three statement model? [00:43:16] S0: I'm gonna say no. I didn't build one in my twelve year corporate career. [00:43:21] S1: Will Excel ever die? [00:43:24] S0: Yes. Everything dies. Just don't let it be in my lifetime. [00:43:28] S1: Absolutely. Love it. Have you used AI to help you build models in Excel? [00:43:34] S0: No. I watched you guys do it on the Mod Squad. No. Yes. Yeah. [00:43:39] S1: Okay. Which of the three financial statements would you say is the most important for financial modellers? [00:43:44] S0: I'm gonna go balance sheet. [00:43:46] S1: I think I had to argue in your debates once. I had to debate somebody and argue for the balance sheet, so I'm glad you said that.
00:43:46 · Giles Male, Paul Barnhurst
[00:43:46] S1: I think I had to argue in your debates once. I had to debate somebody and argue for the balance sheet, so I'm glad you said that. [00:43:53] S0: You probably did. I can't remember because I did two versions of that, but my favorite was watching Danielle and Lance argue. Danielle argued AI would never build models for us, and Lance argued they would. I brought that up recently, and Danielle's like, you had to remind me of that. That was not one of my better moments. Like, thanks. [00:44:09] S1: We were forced into the positions, though. [00:44:11] S0: Just To a certain extent. I did ask questions, so I did try to take based on how people answered positions. Yeah. But... Yeah. [00:44:19] S1: Okay. Few few more. Favorite LLM? [00:44:22] S0: Claude. [00:44:23] S1: If you could pick only one for all your models, would you choose sensitivity or scenario analysis? [00:44:30] S0: Scenario. [00:44:31] S1: It's an interesting one as well because I think they are kind of two versions of the same thing almost. [00:44:36] S0: There there are some similarities. So you could argue, hey. I can do sensitivity within scenarios to a [00:44:40] S1: certain So... [00:44:41] S0: Yeah. I'm sure you're not taking that one for what it's worth. [00:44:45] S1: Okay. Do you believe financial models are the number one corporate decision making tool? And if no, what is?