How To Simplify Complex Financial Models And Save Time with Scott Powell

It dawned on me right then that the whole world had changed. Now in order to get those jobs, you already had to have the skills.

I'm curious, what is it you love about teaching and training so much?

When I got in the classroom, I realized that as much as I loved accounting and finance, I loved teaching. It felt like it wasn't work. Scott Powell is the co founder and board member of the Corporate Finance institute. With over 30 years of experience designing learning solutions in financial services, he's partnered with global giants like JP Morgan, hsbc, Deutsche bank and more. He brings a wealth of expertise in commercial banking, capital markets and financial education. I had thousands of people saying, you changed my life. I was giving them education that creates opportunity because for me, it was the education that created the opportunity. The people who do well in the teaching business are people who show up with the learner's need front and center.

There's a huge amount of soft skills that goes into a good model.

People who do well in FP&A. It's not their technical skills, it's their soft skills.

So if we have somebody listening, they want to start teaching about financial modeling or maybe design a course, what would be the advice you would offer?

I would say, first thing is.

Financial Modelers Corner is the world's premier modeling podcast. It is brought to you by Financial Modeling Institute, the world's leading financial modeling accreditation organization. Welcome to Financial Modeler's Corner. I am your host, Paul Barnhurst and this is a podcast where we talk all about the art and science of financial modeling with distinguished financial modelers from around the globe. The Financial Modelers Corner podcast is brought to you by the Financial Modeling Institute. FMI offers the most respected accreditations in financial modeling. That's why I did the Advanced Financial Modeler last year and I'm doing the Chartered Financial Modeler this year today. I'm thrilled to welcome to the show Scott Powell. Scott, welcome to the show.

I am delighted to be here, Paul.

Yeah, really excited to have you. So let me give a little bit of Scott's background and then we'll jump into our questions. So Scott is a Corporate Finance Institute co founder and board member, currently based in Vancouver, Canada. With over 25 years of experience, Scott has designed and delivered finance focused learning solutions for finance professionals worldwide. His work has spanned major financial centers including London, New York and Hong Kong, and has included clients such as JP Morgan, Deutsche bank, bank of America, Merrill Lynch, Credit Suisse, HSBC and many others. I want to see Lehman in there. I never got to work with Lehman. Few Yeah. Bear Stearns. Scott's expertise covers commercial banking, investment banking, capital markets, and asset management, providing practical, impactful education that empowers finance professionals to excel. So, Scott, if you've listened to any episode, you know the same question everybody gets asked at the beginning. Tell me about that horror story. Either the worst financial model you've worked on or you've seen or you built yourself. But go and tell me that experience, what it was it like?

Yeah. So it was an FP&A model.

Not surprised.

Yeah, well, you know, FP&A models, by their very nature are much larger, more complicated. So what happened is I had a very good friend here in Vancouver who led a small FP and a team, a team of about 10 people, and he knew I was teaching modeling, and he asked me a favor. He said, just as a friend, can you review our FP and A model and tell me what you think? So he sent me the FPA model, and I started just doing some error checking, realized iteration was turned on. And when I turned off iteration, there was literally, I want to say, 10,000, 15,000 circular references, which was. It slowed the whole model down. Right now, even though computers now are getting faster, there were broken workbook links that were hidden, and the model had. I called it a house of cards. It had been a model they'd been using for 15 years. And instead of starting from scratch, they kept just engineering it and tweaking it without knowing the original builder and how it worked. And so, unfortunately, this was a good friend of mine, I said, you need to scrap the whole model. And the shocking thing was he said, you know, we made a major investment decision, capex decision, based off this model.

It doesn't surprise me at all.

Anyway, I'd like to say that's the only time I've seen something like that, but it's the one that stands out because it was so many rows and columns. The larger your model gets, just the harder it is to manage. And so having things like, I'm very nervous about iteration, not that I'm saying don't ever use it, but I'm always nervous about workbook links. I'm not saying don't ever use it, but it's about how you judiciously use things and how do you document and lay out your model so anyone who needs to pick it up and maybe update it or review it can understand what's going on.

Yeah, I probably shouldn't admit this, but when you mentioned circular references, I remember I had a job where the boss had called us all New CFO called us all to the headquarters and said, look, we're building all new models. Basically your models suck. They're not driver based. They're not good enough for the business. We have. Everybody's building new models. And he wanted, he had this offset function he was using to do a ramp. And at the time I didn't understand it. I was struggling and I had the most complex business, of course, on top of that. And so he pulled in one of the guys that had worked in investment banking and we worked together for six months on that model and we got done. And even with him working on it, I remember we had a circular reference we shouldn't have and a few little problems. And we had one revenue model at separate head count, a separate expense, and you were linking them because there was just so much stuff and it was multiple businesses, you had to do it different. We think we got up to a hundred versions of that thing. And I finally said after about a year of using it because it still didn't really meet the business's needs, I had to go through and rebuild the whole thing. Oh, on my own. You know, he was, he was gone at this point. And it was one of the best decisions I made. But it was horrible. It was just so painful to. Because it wasn't meeting the business's needs because our data was so bad. I had to clean it all to actually be able to say how much revenue are we really getting from this customer or this product? Because we were billing things with the wrong product codes and it was just a nightmare. So I, I could totally relate. When people tell those horror stories, I still have plenty in my mind and some of them are the ones I've built.

And listen, I have done very similar things. The only message, big message for me is because I remember even there were places that should have been formulas that were hard coded and of reason, I'm telling you this is of course that those are easier to find in a small three statement model. But when we're talking about a large FPA model where we're modeling things like headcount and all, you know, just bottom up, it's so easy for those to creep in and you don't find them. It's like a needle in a haystack.

That was the one thing my friend was really good at is we'd always highlight it in a different color and put a comment because sometimes we had to override something for an assumption. Now I would put an override line in there in the model throughout. I think That's a cleaner way to do it. But at least we were really good at documenting them. So you could quickly see because. Yeah, I hate hard codes everywhere.

Yeah. But at least, as you said, at a very minimum in financial modeling, color it, flag it so that people know where it is.

Exactly. I remember we had Tim Vapand on and he was telling us hard code and divrefistic things. He's like, even if you're in a hurry, he's like, just don't break the rules. It's just going to come back to bite you. He's like, just take the extra time. Even if you're up a little later that night.

Yeah.

Your future self will thank you. Basically, was the idea.

Exactly. Because have you. I've gone back to models I built and I don't remember how they work. Right. Because I haven't documented enough. Or I. Anyway.

Oh, I'm totally with you. It's like we had one guest on that said, he goes, if you open your model three days later and you can't understand what you did, then you made it too complex. Simplify it.

Yeah, exactly. And it's a very good message because I always say, simplify, simplify, simplify. Because you're never going to regret that.

No, I. I'm totally with you. So I gotta ask. I noticed, I was looking at your background. You earned your undergrad in economics, but then did a Master of Philosophy. I'm curious, what was the kind of thinking behind the Master of Philosophy? Because I can't imagine you're using that directly in the work you're doing.

So here's the. I get this question all the time. And it's because.

I'm sure you do.

And it's because I went to school, I did my Master's degree in the uk and what happens in the UK at. I went to Cambridge. This is a bizarre thing. But if you do a bachelor's degree at Cambridge, it automatically turns from a BA to an MA after a number of years. You don't do any study. They think their degrees are so great that they turn them into mas. So if you've actually done a studied Master degree, they call it a Master of Philosophy. You know, like PhD is the P is the philosophy. So in fact, my Master's thesis was in econometrics. Okay, so. But I get the question all the time. I have to explain. Sorry. Cambridge. It's only Cambridge and Oxford. They give their Masters. They don't call them MAs, they call them MPhils because they give their BA students an automatic upgrade to an MA without doing any extra work. So that maybe that makes a bit more sense. Although it's a bit nerdy. I know econometrics isn't everyone's cup of tea.

It's all good, you know. But I was going to say, you know, Oxford, they sound like, you know, hey, kind of that we're better type. We've been around forever. Much like lawyers and how they get a doctorate before a master's.

Yes, exactly.

Kind of reminds me of that a little bit where you're like, all right, we could tell you value what you're providing a lot.

Yes, exactly.

All right, that makes a lot more sense now. I now understand. Thank you for clarity.

Listen, I've always been, I love numbers. I think that's the thing. Although I've moved, I then I went into accounting and finance. But the theme is there's numbers involved in all of that. And number crunching.

No, I've always enjoyed numbers ever since I was a kid. So I understand that one. So tell us the backstory. How did you help found Corporate Finance Institute? How did that come about?

Okay, so you can see this gray hair. And so I started my career. Yeah. 30. The reason I'm going to tell you this story, I'll try to keep it short, but when I got my first job, it was in the UK and you didn't have to have the skills, you didn't have to have modeling skills, you didn't need to know accounting. When you joined a firm, they said, we're, we're hiring you based on your competencies, how well you play with others. They want to see your personality traits, do you work hard? And then they would train you, you would join a firm and the first few weeks would just be training. And then every quarter there'd be more training. Okay, so long story short is I didn't have to have any of the technical skills. Fast forward a couple maybe 30 years. I was running an in person finance training business based in London, New York and Hong Kong where we trained new analysts at the banks, like the banks you listed in my bio. What we, what I was finding is I was getting all these calls from business schools asking us if we would come and train at the business school because they wanted to give their business school students one up so that in interview their students got the jobs on Wall street and not the other business school. And it dawned on me right then that the whole world had changed. Now in order to get those jobs, you already had to have the skills. And so that Was the rationale behind Corporate Finance Institute was like, how can we set up something so learners around the world can upskill themselves to get the job? And the problem was, is I was running a full time business. So I luckily had met Tim Vipond, one of my co founders who was looking for a challenge, something new. And I said, I have this idea, I even have the name, it's Corporate Finance Institute. But I can't do it off the side of my decks. This has to be, you know, it's a big initiative. Uh, and Tim agreed. And fast forward now, you know, that was 2015, we were talking 2016, we launched and now we, we've worked with 3,4 million learners around the world.

Oh, is that all?

Yeah, but yeah, so that's kind of, that's the story. I tried to be as brief as possible, but it's clearly there has been a sea change in what people are expected to have as a skill set before they even get their first job. Which, which is totally different from when I started.

Yeah, it is interesting to see how expectations are getting higher and higher and wanting more of the, the skills and how that will set you apart. Right, that, right internship, those right part time jobs, the right classes, whatever it may be. They're wanting people to be able to hit the ground running a little bit more than they did in the past.

Yeah, totally.

I'm curious, what is it you love about teaching and training so much? You've done it the last 30 years. Pretty much your, almost your whole career has been that.

Yeah. So what was interesting, I'll tell you a very quick story. I was working in finance and I was based in London and my company asked me if I would go to Hong Kong to train the new analysts coming in. So I go, great, a year in Hong Kong. This is going to be fun. Had never taught, went to Hong Kong and it was like a light bulb moment. When I got in the classroom, I realized that as much as I loved accounting and finance, I'd love teaching. It felt like it wasn't work. And as soon as I came back from that year in Hong Kong, it was like, no more. I need to teach. I need to teach and I need to. But it wasn't not teach at a university. It was like I need to teach practical skills. Because what got me excited was I was helping people do their jobs better. And at the core I realized like I like being in service to others, I like making a difference in people's lives. So that's why my whole career, although I started in Finance ended up being teaching finance. And it's simply due to that. That one year in Hong Kong that changed my whole or changed the direction of my entire career.

It's funny how the one thing we commit to doing ends up just so changing the course of life that we never expected.

Oh, yeah, totally.

So I'm curious, as you look back over the last 30 years of teaching, do you have a favorite memory? Is there something that kind of really stands out to you is, look back, obviously, I'm sure Hong Kong was a turning point for sure, but is there maybe a memory or a student or something that just really stands out to you?

So I'm sure this happens to you, Paul, but I always am honored. I go on LinkedIn and I have people thanking me personally for changing their lives. Okay, so. And it's. That's makes. If you're in service to others, that's pretty good feeling. So the best experience was we partnered with an organization in Africa called ALX who were funded by the MasterCard Foundation. And what they were trying to do is they wanted to upskill people across Africa. And they partnered with my firm, Corporate Finance Institute, to upscale over one year, 30,000 people. And it was free for all the learners. But the cohort sizes were 5,000. So I would be running a live session through, like, a Zoom framework for 5000.

I couldn't do that. That's tough.

But people were so grateful. To this day, like, I had thousands of people saying, you changed my life. Now, listen, I come from a very small rural town in Canada. My dad ran a gas station. And the reason I'm telling you that is that I felt like I was doing the same thing for these folks in Africa. I was giving them education that creates opportunity. Because for me, it was the education that created the opportunity. Yeah, yeah. So 30. Although it was a ton of work, because they were cohorts of 5006 cohorts. It was crazy.

Yeah, I can see where it'd be a ton of work, but that'd be really rewarding. I can tell you love being able to serve people and see the difference it makes in their life when they come back. Like, I get those notes too, from people. Hey, you know, your podcast helped me be better in your job, or I love your content or whatever, and it makes you feel good. You're like, okay, it's making a difference.

Exactly.

You know, one of my. One of my favorite quotes when you mentioned the service, I love this. That I've heard is service is the rent we pay for living in the world that we do.

Oh, what a great quote.

And I just love that idea, you know, because if everybody takes that approach, it just makes the world a better place.

Totally agree. Totally agree.

Love that. Great story. So obviously you've done a lot of training, up to 5,000 in a cohort to probably one person to, you know, digital, all those different things. When you're starting to build a course or you're building something, you know, particularly around financial modeling, how do you, how do you get started? How do you think about that? Kind of like what's your maybe framework or how do you think about going about that?

So a lot of the teaching I've done online, in person, so on has been financial modeling related. Right. And so my. There's a couple of things that I always think about and teach which is don't jump in and start building. Start with the end in mind. Really think about your stakeholders. What are the deliverables, what do they need to see as outputs? And then think about I often this is because I'm old school. I would actually draw something out on a piece of paper, right. And I would really think about how do I want to structure this and because then what's going to happen? Because I always think about if you jump into your model and start building on the fly, you're missing the logic of the how the model overall works. And so pausing and allowing yourself to think about the model components, whether you use a Word document online or, or some other software or just a pad of paper is going to allow, is going to actually save you a lot of time. Even though it looks like it's going to slow you down to begin with.

While my background is in FP and A, I am also passionate about financial modeling. Like many financial modelers, I was self taught. Then I discovered the Financial Modeling Institute, the organization that offers the advanced Financial Modeler program. I am a proud holder of the afm. Preparing for the AFM exam made me a better model modeler. If you want to improve your modeling skills, I recommend the AFM program podcast listeners save 15% on the AFM program. Just use code podcast. It's a great point. You know the analogy I'll I always use of kind of that planning and is you would never build a house without blueprints.

Exactly. Great analogy.

You know, but we build models all the time with just jumping into Excel. I mean I've been guilty of it plenty times. And then we wonder why the thing is a total mess when we're done.

Exactly. Listen, I have this tendency I Love doing so I have a profound tendency to just want to jump in. So, in fact, I have to force myself to slow down. I don't like drawing it out, but I just know from practice it's going to save me a ton of time. Because as that model gets built and then you realize you missed something, then you're unwinding your model built anyway.

Yeah. We've all been there where you're like, oh, yeah, now I got to figure out how to add this to the model or that or.

Exactly. And the. The issue. I also. The other thing is maybe I'm going to overstate this, but I believe every model should be slightly different, possibly because the stakeholders are different. And I'm not just saying you're an FP and A. And it's a different industry. You could be in the same industry, but you're two different companies. With every company has something particular to it. And you owe it to your organization to really think about who needs this model, who's going to be using it, and what are the nuances that I need to make sure are there without overly complicating the model. Sorry. And this is what. What drives me crazy is, and I used to be prone to this is overcomplication that doesn't materially impact a decision maker. Right. I can make a model look more precise by adding hundreds of rows and columns, but it's not going to materially affect the decision. So why do it?

That's something you learn over time in a balance. I was like you. I've been, you know, way too technical in a lot of places. Like when I first built this one model, I tried to do a call center at a employee level. That was really dumb. I learned my lesson the hard way. I'm like, why just put in the number you need of each and the average salary?

And that's such a great example. Right. Cause I would have. I've done the same thing. We think we're being more precise, where it's just extra things to maintain, extra cells that can get overtight, extra formulas that can go wrong.

Yeah. It. It didn't make me any more accurate. It just created more work for me, is what it did.

Yeah.

And so, you know, definitely learned over a few years, the model got much better by the time I was done and had learned how a call center really worked. But that first year, what am I doing? Why did I do it this way? Cause everything else was that way. And I didn't want to build a separate model. But later on, I realized no this one needs to be separate. And so it's balancing. I was thinking I was being simple and I really wasn't. I was making it harder on myself by not just adding a separate piece that simply, you know, mapped out that business. And that's where that complexity and simplication comes into play. And sometimes what you think is simple isn't really simple.

Yeah, totally agree.

I'm curious, you know, as you teach the courses and obviously, you know, teaching people the importance of, hey, sketching it out, how do you manage kind of the balance when you're teaching a course between focusing on the technical skills? Right. Everybody has to understand Excel. You got to know your accounting, three statements. But there's a huge amount of soft skills that goes into a good modeler telling that story, being able to ask the right questions. How do you balance that when you're teaching and thinking about a course?

Yeah, I think, Paul, I think you've nailed a really important thing that we all need to be thinking about constantly. I think of technical skills as the baseline. I think of soft skills as the thing that will set you apart. Because it's not about how well the model is built. It's about how well it communicates a story, how well you communicate that story. How good are you at asking the right questions of stakeholders to understand their needs? It's about building rapport with those stakeholders. So in all of those things, for me, because when I think about the people who do well in FP and A and are typically sitting near the top of an FPA team, it's not their technical skills, it's their soft skills and how they show up. And so please, please, please don't neglect soft skills. So I try to integrate it as much as possible. The only problem is, depends on how much time we have at cf. Right. Because. But I think a comprehensive FP and A learning curriculum has to include both the technical and the soft. Communication is key. In fact, we've. At cfi, we've just launched a course on communication Best practice communication skills for FP&A professionals.

Good. No, it's definitely one that's needed. And I think anyone who's doing modeling has to be a good communicator. Definitely FP and A. There's that business partnering aspect that may be even bigger than some areas of modeling. Like there are some people that really, you're just hired to build the model. They're going to give you all the inputs and you hand it back over when you're done. But for the majority of us, whether it's FPA or not. You really have to be able to tell that story and challenge assumptions and go beyond just taking it all, putting it in and handing it back to somebody.

Exactly. And I also think your stakeholders, respect. Will respect you more.

100% agree. Especially when you challenge them and you help them realize that some assumptions are wrong or something they're going to do is not going to have the result they think it's going to have. Because I bet it would have been in that situation. We start looking at going, I don't see how this is possible. Like, I can remember one time with the boss of mine, you know, kind of running through a bunch of marketing stuff. She's like, well, walk me through that. We got all done. And he was kind of like, oh, we are kind of screwed. That was kind of his. Didn't realize how expensive it was. I'm like, yeah, fortunately we're getting growth, but it's not going to the bottom line because of the top.

Yeah.

Type of thing. And so we all, we all have those moments. So if we have somebody listening, you know, we got obviously a lot of modelers and several that have started their own business. It's so much easier to create a course and do training today. If someone's listening and they want to start teaching about financial modeling or maybe design a course, what would be the advice you would offer them?

Great question. So I would say the first thing is you want to be in service to that learner. So. And I think the people who do well in the teaching business, whether you create an online course or you're doing something in person, are people who show up with the learner's needs front and center. And if that is you, then I'd say you want to think about putting yourself in the seat of the learner. Because when I was, whenever I design a course, I go, where are they going to struggle? Where are the pain points for this learner? Because it's, I need to focus on the things that are going to mess them around. You also want to think about the type of people you want to work with. What's your specialty? What value add can you bring? There are quite a few in person finance training firms out there. So if you think you want to try it, there are online firms like cfi. So there are opportunities to try it out. The other thing I always encourage people to do is take other people's courses, think about what you like and you dislike. Right. And that's going to give you a sense of how can I take something and enhance it. So one of the things that I noticed early on, even when I was doing in person. You're going to won't believe this, but one of our competitors 20 years ago in New York taught financial modeling without Excel. How do you do that? Yeah, they literally just use slides and academically went through what it would look like without them doing. So there were screenshots of Excel.

Oh, yeah. I would have been out the door pretty quick.

Would I like why that has to be hands on right now? Of course I'm giving you an extreme story, but sure. But the idea is try, try as many, like just try. Check out as many courses as possible.

That's really good advice. Right. You know, check out different courses, keep the learner front and center, find out what their pain points are and try to solve them in your course. Makes a lot of sense. That gives me some good reminders because sometimes when I'm building courses, I step away from that and you forget, you're like, hey, how quickly can I get this done? Or what do I want to show? Not what do they really need. I definitely. That's a great reminder for me, Paul.

I'm glad you said that because that's the difference between being in service to others. I've seen a lot of people who are really good at modeling in Excel that's they're just wanting to show off. And so they go way too fast for the learner. They're showing their skills off. Like, look at how awesome I am at the front of the room. That's. You're not being in service to the learner.

No, you're not. I've been guilty of that before where you try to show off. I still remember trying to show off in front of my boss when Dynamic Arrays first came out.

Oh yeah.

And I built this scenario model and of course it broke right in the meeting and I looked like an idiot and I was just like, fortunately I had a great relationship with my boss and it didn't damage me, but it was that reminder of like, you don't need to show off. Just build it the basic way and give him what he needs instead of trying to be fancy.

Yeah. And listen, 20, 25 years ago, I was much younger and I caught myself showing off. What I would do is show off how quickly how many Excel shortcuts I could use and that I didn't need the mouse. And I could build a model that would normally take an hour and 10 minutes and I would just be whipping on the keyboard and like, but great, who cares? About that.

Yeah. I've always had a kind of that. A little bit of a contrarian view on shortcuts. I'm like, yes, they're helpful. And if you're building models all day, they will save you time, no question. But these people that like you have to be a keyboard warrior, never use your mouse. Use mouse. Most of my career, yes. Do I know shortcuts now? Yes. Can it save you time? But if I'm building something where I'm really wanting to think, I really care If I save 30 seconds and then spend five minutes thinking about the next thing I'm going to do. So I was like, you know, use the balance there. They're great and they can save you a ton of time. But, you know, keep it in perspective is what I like to say.

Yeah. Which is just. That practically makes sense. I say something very similar. Now. I have worked and taught at banks where their rule is you can't use the mouse. So I say, sorry, guys, but for me, I'm not going to memorize every shortcut, especially those long ones that have multiple letters that I'm barely going to ever use. But the ones I'm using daily, like, I don't know, I use Paste special all the time. So. Right. So I'm going to do Alt HSV without even thinking, because I know I use it every day and I use Go.

I do Alt esv. Funny how there's the different options.

I know. I actually do alt ESV too, but I'm the old guy. I actually thought, oh, I better. So people know this.

You were both the old guy. There you go.

Yeah. But what's nice about Excel is the old shortcuts. Even though they changed the ribbons, they made them still work. So I do use ltsv. But even this morning I went, I'm coming on this podcast. Let me just make sure. What's the one that they have now?

It's like somebody came on and they mentioned Control L was their favorite. Like, it creates a table. And I'm like, oh, 2006. When it was a list before they made it. It took me a minute. I had to think about it for a minute because it still works. Like, I've never used Control L to create a table. I would have never even thought about it.

Yeah. And I. The E, I think I recall. I think it was Edit. There was an Edit tab.

Probably that. That makes sense. I'm going to guess you're right. That would make sense for the E. I never thought about what it stood for. But, yeah, now it's the home. Yeah. They keep, keep making changes, that's for sure.

Yeah.

So I'm curious when you talk about changes, how do you manage teaching Excel to people with how rapidly it's changing nowadays to try to help make sure they're getting the best out of it, but also realizing that most people aren't going to take time to realize Dynamic raised Lambda let Python Office scripts I could go on and on, right? The average person can barely Keep up now with 365 and monthly updates. So kind of how do you, how do you balance trying to teach people the latest and make them more efficient with also knowing that sometimes almost feels like a full time job to really keep up with Excel nowadays.

The advantage of now is the, the volume of tools and new functionality, but it also is what it can overwhelm us all. And so I tend to go like you're not going to hear me say please everyone who's listening, you need to do Python Power query Power bi. You need to be learning all the new Excel functions on a monthly basis. What I tend to say is what's the nature of your role? If you had to rank these tools in terms of how they'd be used, which one is the most critical to your role and you owe it to yourself to focus there first because there's too much that's kind of high level because ultimately we all know this but in FP and A there can be many different focuses in those roles. And I could be, I think maybe 30 years ago you could be a Jack or Jill of all trades traits. Right? I knew vba I it's a full time job. There's no way you can be a Jack or Joe of all trades with all the tools that are out there. So think about where you either where your role needs you to specialize or you want to specialize.

I'm 100% with you, especially when it comes to Excel. Like you know, anyone who tells me they're a master in Excel, I'm like okay, let's talk like I interviewed a guy once and I always ask rate yourself on a scale of, you know, 1 to 10 and the guy goes I'm a 10. And just the way he said it, you could just sense the arrogance oozing out of him. Really smart guy. That was apparent like he could do the job but was also had a high opinion of himself. And so I said this is when Dynamic Razor first come out. Have you ever heard of xlookup? No. Have you ever heard of Sequence? No. Have you ever heard of this? No. And did you know a couple more and I'm like, would you like to change your answer? I said that to him and he looked at me and he goes by fine, a nine. Like we didn't hire him. But you know, it's like a little humility in recognizing that nobody knows anything. Like if you want to tell me a 10, give me a good re. But his reasoning just didn't quiet I.

Also think we're abusers of certain functions that we encountered earlier on our careers and don't realize that there are much more efficient ones. Like you mentioned, xlookup. I still see people building things with Vlookup when xlookup is there because they don't know or there are and Excel's coming up with new functions and that's As a older guy, do you know what I do? I actually use AI now and I say hey, I'm using this function. Is there a newer function that's more eloquent, more adaptable? And that's been quite helpful?

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Will tell you like I'm an abuser of offset. You mentioned the offset function. I love the offset function. I'm an abuser of Index, Match and Choose and I'm an abuser. I used to be an abuser of Vlookup, but I don't. I hate Vlookup.

How about indirect? Do you abuse that one?

Not so much.

I've been an abuser of that one more than not.

But I asked anyway so I'll stop talking.

Yeah, no, you're totally fine. So if you want to know how to slow down a model, be an abuser of What See offset, indirect. Today you can come up with some other volatile functions. You start abusing those a lot in your model and watch it slow down and explode inside.

The one I always go to, which is the most simple function is those nested if statements. Like please don't have nested if statements. Yeah, I want. I think it's 64. I can't remember but I think you could have. Correct me if I'm. But it used to be. I think it was seven or eight, but then several years ago.

Yeah, it's something like 64. I think that's right.

And I've seen some.

I'm really grateful. I wrote SQL for a while and I was doing everything as an if statement and my boss said no, like set up separate tables in the database to do your logic. And he walk me through how to do that and that was a really good learning for me because I'll try to think how can I set up a separate table and just do a lookup instead of a bunch of ifs? 3 or 4. Fine. If you have more than that, you probably should ask yourself is there a better way to do it? If you have 64, you should probably start over with your model. You Price and Burman.

Exactly. I. I agree.

And the other thing is please put each if on a separate line. Yeah, like just hit alt enter.

That's all you have to do. Exactly. I can read it even that if you're going to use nested if statements do that.

Of course, ifs works great. Switch. There are others to replace it now, but I hear you so I have to ask. I saw where I saw but I saw online. You're a pinball enthusiast.

Yeah. So I have four pinball machines in my home and I want more. I want more.

And what's your finger pinball machine that you've owned?

Well, so here's I remember I told you I grew up in a small rural town in Canada and there wasn't much to do, but there was a bowling alley with three pinball machines. And so after school, the bowling alley was between school and home. We rode our bikes, my brother and I, we had money from our chores like quarters. And on the way home we'd always stop at the bowling alley. Not to bowl, but to play. Play pinball. So one of the pinball machines that was there was something a pinball machine called Buck Rogers 1980. I remember Buck Rogers and I happened to be hunting for a pinball and I found it. So I have an original Buck Rogers pinball machine that I got fixed up, but there's a new one. There's a company called Jersey. So anyway, as a kid in a small town, it was like magic. It was something. It was so much fun. And there's not many things to do. You could go swimming, biking. That's about it. Right. You're not in a. Or go to the bowling alley and play.

Totally get it. So pinball was something to do as a kid and it stuck with you.

Yeah, exactly.

So to have a couple more kind of standard questions in a minute here, we're going to get to Rapid Fire, which I'll set the rules for that. But first, what's your favorite Excel shortcut?

Okay, so it's Control. Tilde, do you know Control? No one's gonna know it. Tilde.

I know I've done this one, but it's slipping my mind right now. Remind me what it does.

So Tilde. I had to look it up, what Tilde is, but it's the accent key right below the escape key on a keyboard.

Yeah, right next to the one.

Yeah, you got it right next to the one. And if you have a model and has. And you want to see all the formulas on this sheet appear, it actually toggles between seeing the formulas in all cells or seeing the number. So you can.

Yeah. So R1. It changes the notation from seeing the answer to seeing the full formula.

You got it.

That's right. I knew. I knew that somewhere, but I don't use it often, so.

But I've already told you, the ones that I. My favorite ones are the ones I use daily. So alt ESV. I use goto special lot. So control G or F5 to find things. So those are my. I knew I was going to be asked this question. I thought, let's be honest. Let's just think about the ones I use every time I open Excel.

Yeah, I mean, I use Control C, Control V a lot right there. Control T is one of my F4. It's some of the most simple that most of us use.

Right. And that's where, like, learn those ones that you know you're going to. Any keystroke. My view is any keystroke in Excel you're going to use prolifically. Every time you open Excel, that's when you should learn the shortcut.

Yeah, there's probably, you know, 20 or 25 that would cover 90% of what you're doing. The control and the arrow keys to be real quick moving around and, you know, control down. The copying, the pasting, the cleaning up your formulas there's, you know, then, then after that you can always hit alt and just run through the menu if you don't want to use the mouse and figure it out if you're using one a ton, you can see if there's another shortcut for it.

Yeah, and the other things. So I know we need to move on, but the other thing I do is I always tailor my customers shortcut bar at the very top. You know how you can add things because then when you hit alt, you just hit the number 1, 2, 3. So anything that's complicated to get to with a shortcut key, but I use a lot, I'm going to put up in that, that bar. So I can just go alt 1, alt 2, alt 3.

Yeah, I know a lot of people use that as well as a great way to do that. So. All right, this is kind of a fun question we asked. What's the maybe funniest or most unique thing you've created a model for or used a spreadsheet. Doesn't really need to be a model, but maybe you've done in Excel. Could even be Google Sheets. I won't hold it against you in your personal life.

How dare you say Google Sheets. That's shameful. Now, okay, so I'm a nerd. I am also an educator. So because I love Excel so much, I've created full blown simulations only using Excel. So for example, I've created an asset management simulation for portfolio managers where you manage equities, bonds and you get feedback on your decisions as the simulation moves through four years. And it's all automatic, all built off Excel. And I've done, I think 30 different simulations and I love it because I geek out, right? I'm going, how am I going to build this? And I don't have to have any sophisticated software. It's amazing what you can build. I'm not saying everyone should build everything in Excel. You need to choose your battles. I've seen people use Excel for things where they should be using software like FP&A software that's all right.

Yeah. Or maybe they should have a database.

Exactly.

But we've all seen it. And I saw somewhere one time some put it on LinkedIn, it always stuck with me. They had 15 different categories and they had a ribbon that said second place and they showed a picture of Excel like kind of almost. It's always the second best tool for just about everything.

Yeah, exactly.

That doesn't mean you should use it for everything.

Exactly.

So I'm totally with you. It's Amazing what you can do. All right, so we're going to move to rapid fire. Here's how this works. So I'm going to laid some ground rules. You can't say it depends. Looking for quick answers, yes or no. And then on the one or two you're most passionate about, you can elaborate at the end. So you can't be a consultant or a teacher for this.

Okay, so if you had to pick.

One side or the other, which one would you pick? Don't worry, we won't make it too hard on you. Circular references, yes or no?

No.

Vba.

You have to say no, right? I'm gonna have to say no.

Do you prefer horizontal models, where you mostly have it all in one sheet, or vertical, where you kind of put each schedule on a different sheet?

My CFI colleagues are gonna hate me. I like horizontal. I like multiple sheets.

I was wondering if you get yourself trouble there. All right, so dynamic arrays in models, yes or no?

Yes.

About fully dynamic. We're using 100% arrays in a mob.

I would still lean yes.

Interesting. Okay, I might have to ask about that at the end. External workbook links, yes or no?

Oh, I hate these are yes or no?

You can elaborate at the end. I know everybody hates these because they're like. I want to elaborate.

I'd say no.

All right. Named ranges. Yes or no.

You know, I love them and I use them occasionally. Some of these things are with. If you're judicious about it. But you said yes or no, so I'm going to say no. But I use them. But I'm very judicious.

I'm with you. I use them in judicious as well. Do you follow a formal standards like FAST or SMART or some of the other standards are out there in your modeling.

So the answer is yes. But what I say to everyone is at least as an FP and a team in your organization have one set of standards that everyone follows. I don't really care if they match someone else. But you all need to be playing from the same sheet.

That's what I've started teaching people. I'm like, just agree to things. I don't care if it's or not. But at least have the same color coding and other things exactly.

Like, what's your input color? Please just make sure it's the same. If it's not blue font, I don't care.

Yeah, I'll even show them. I'm like, you can use Excel colors because Excel has that in its styles. I think they're Hideous. I built one model that way and I, I thought it was hard on the eyes, I'll be honest. But that's what you want to do. Do it. All right, so this one will be real quick on these. Should financial modelers learn Python in Excel?

Yes.

What about Power Query?

Yes.

Power Bi?

Yes.

All right. Will Excel ever die?

I'm going to be an optimist and say no and I'll tell you why.

All right. I'd love to hear on this one.

Oh, sorry.

No, I. Oh, go ahead. You can elaborate now. We'll give you a chance now to elaborate.

People need to be able to see things in a certain format with this, grids and the numbers. So I think the very nature of the way the information is presented, whether it's Excel or something else, is so valuable that it's never going to die. Will Microsoft Excel be replaced by Google Sheets? Maybe. You know what I mean? But the nature of the spreadsheet, the.

Spreadsheet is an input form is never going anywhere.

Yeah, because when I started my career, I was using a software called Lotus 1, 2, 3.

Oh, yeah, I remember using it.

So the thing is. But maybe I'm too optimistic because I think Excel's the best thing since sliced bread.

Only sliced bread. I thought it was even better than that, but we'll go with that.

Okay.

Do you think AI will build the models for us in the future?

No. We could talk about that if you want.

All right, just have two more and then I'll let you elaborate on one or two. Do you believe financial models are the number one corporate decision making tool?

Yes.

All right. And what is your lookup function of choice?

Xlookup. I love xlookup only because Vlookup, every time I was teaching Vlookup had so many issues with it. And it was like, this is just driving people crazy, especially in FP and A with big models and big data sets. So I think xlookup was such a savior for so many people who especially work with big data sets.

I'm with you. I, well, it's easier to teach too. I, it makes a lot more sense. If you didn't know Vlookup at all, you'd be like, wait, why did we design it that way?

Exactly. And don't learn it now. Don't learn it now.

Yeah, I, I, I was teaching some girls about a year ago. They were 18. Their dad hired me to teach them Excel as they were going to college, and I taught them Vlookup. I'm like, why are you even teaching us this. I didn't teach you. Max, lookup.

Go.

The only reason I'm teaching it is because you'll see it in models.

Yeah. Which is true.

So you're aware. Otherwise I wouldn't even have taught you this. Because it doesn't. Don't use it. I'm not teaching you to use it. I'm teaching you because you'll run into it somewhere along the way.

No, it's a very fair comment. That's why I was humming with vba, because the problem is there's these legacy models with VBA code. So if you are working with an FPA model with VBA code, maybe you need to learn it because you need to update the vba.

It's a challenge. I know some basic vba. I've never gone deep in vba. I usually have had others. If I need it at this point, I won't. Trust me. All right. Any there anything there you want to maybe add a little bit of context to?

Yeah. So named ranges don't name every row or column because then you get so many hundreds of names and that you actually can't find anything. You don't. And also the names don't mean anything if you're very thoughtful about something that you need to refer to a lot in the model, like in a valuation model, maybe it's the weighted average cost of capital. Okay. I might name wacc and everyone knows what that WAC is, but. So I've seen named ranges that literally there are a thousand name ranges.

Just use the table at that point. Yeah.

And with the. Should financial modelers learn Python, Power Query, Power bi. The more the better. But I would say you. I'll go back to what I said earlier. Which one are you going to use the most? That's the one you should focus on.

Yeah. And for me, an FP and A was definitely Power Query.

Yeah.

Now it might be Python a little bit more, but I get what you're saying. You have to pick and choose because learning all three of them deeply is an incredible investment for the average person.

Exactly.

All right, well, I think we're just coming up to the end of our interview, so give you an opportunity. Any last words or anything you'd like to share before we let you go here?

Yeah, just one thing that if you are passionate about Excel, one of the things that I always say is every time you're in Excel, try to learn just one new thing, however small, and add it to your toolkit and start using maybe it's a new shortcut of something you know that you're using a lot as we talked about. Maybe it because we can get so caught up in our day to day that we then just keep using the same tools, the same approach. And if you take five to ten minutes to learn one small thing new and you think about it as a habit, in a year you're going to have learned a ton.

Very true. That's great advice. So we'll go ahead and put, you know, Corporate Finance Institute and your LinkedIn profile in the show notes in case somebody wants to reach out to you. If there's any other way you think they should get in touch with you, feel free to let us know. But I'm guessing LinkedIn and CFI are probably the two best ways.

You got it. Check us out. Check me out at Corporate Finance institute or on LinkedIn.

Perfect. Well, thank you so much for carving out some time, Scott. Enjoyed chatting with you and enjoy the rest of your day.

Thanks so much Paul. It's been a real pleasure.

Thanks. Financial Modelers Corner was brought to you by the Financial Modeling Institute. This year I completed the Advanced Financial Modeler certification and it made me a better financial modeler. What are you waiting for? Visit fmi@www.fminstitute.com podcast and use code podcast to save 15% when you enroll in one of the accreditations today.