Master The Secrets for Building Better Financial Models with The Co-founder of CFI - Tim Vipond

I could not undo this hard coding that I had done. Stresses are running high. We need to get this out the door. I completely messed it up.

What's the key takeaway?

The key takeaway is do not take.

But what role does strategy play when you're building mocks?

I don't think this gets talked about enough. It's absolutely critical. But if you've lost sight of like, wait a minute, does this even fit with the company's strategy? The model's not going to be that useful, actually. Scenario analysis, of course, a big part of financial modeling. I think you really have to dig into those scenarios with a strategic lens.

And there isn't one. Right. Framework. Right. There's a reason. There's dozens of them.

You just got to try a bunch.

Of stuff and see what's the number one lesson you've learned.

I realized that you can propel yourself forward a lot more quickly. Combining two or more unique.

Welcome to Financial Modelers Quarter where we discuss the art and science of financial modeling with your host, Paul Barnhurst. Financial Modelers Corner is sponsored by Financial Modeling Institute. Welcome to Financial Modeler's Corner. I am your host, Paul Barnhurst, AKA the FP and a guy. 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 and that is why I completed the advanced financial model this week. I am thrilled to welcome to the show Tim Vipond. Tim, welcome to Financial Modelers Corner.

Hey, thanks so much for having me on. I'm excited to chat with you a.

Little bit about Tim. Tim began his career as an investment banking analyst at CIBC Capital Markets in 2005. After working on a wide range of mergers, acquisitions and capital raising, he went to work in wealth management at Scotiabank. After completing his mba, Kim worked in strategy and corporate development at Newmont Gold Corp. And then was recruited to be the VP of Finance@shoes.com following that, Tim co founded Corporate Finance Institute, which has now trained over 2 million students. You've accomplished quite a bit there, Jim. Impressive.

No, thanks. Well, when you condense it all down to a short summary like that, sounds. Sounds impressive.

Isn't it funny sometimes when you see it all in a short, you're like, well, I really have done a lot.

Yeah. Distillery down. Sure, yeah.

So we like to start every episode with this question to kind of have a little bit of fun and see Everybody's horror story because we all have worst model you've ever seen you've had to work with.

Well, I'll tell you about my financial modeling nightmare. I don't know that it was the worst model ever, but it was definitely the worst modeling experience I've ever had. Actually, way back at the top of your intro there at cibc, when I worked in investment banking, I was working on a pitch book late at night, as you often are, we're about to send it out to the client. There was some sort of last minute change that was required and I don't know why. I had to hard code some numbers into the model. It was like a couple minutes to do this. So I was like, okay, the only way to do this is to hard code some numbers later. We need to go back to a previous version of it. And I had somehow saved over. We didn't have autosave back then and I could not undo this hard coding that I had done. So, you know, it's like 10pm stresses are running high. We need to get this out the door. I completely messed it up and you know, I had to have a very hard conversation with the director that I was working with, who was there with me late at night explaining what had happened. It had to then take time to rebuild a whole bunch of stuff. So that was extremely stressful and painful and sort of the. But a great learning experience for me all.

Yeah, I think we probably all have a story where we've done something with hard coding, especially before autosave. I know I've done a few things where I go back and I'm like, wait, I could have swore I saved this. This is not what I expected. You're just like, go back and redo it. So what's the key takeaway? You said it was a great learning. What was the number one learning from that?

Yeah, yeah. The key takeaway is do not take modeling shortcuts. Meaning when I say shortcuts, I don't mean like keyboard shortcuts. I mean don't skip steps because they'll come back to bite you later. Right. Anytime you think, oh, I'll just hard code this and remember to change it later. It's actually very likely that you won't remember to go fix it later. Do it the proper way the first time. But it's hard when you're under pressure, like when there's a deadline to meet and you know, hey, I can do it this quick way. That's not the right way or the right way that Takes more time. There's going to be that tension there. But I would basically say, you know, never, never take shortcuts in your modeling.

Yeah, it's really easy to do and it often comes back to bite. Yeah, I'm with you. I've. I've been bit more than once where it's like, oh, there's a hard coded number there. This is not good. Because you think, oh yeah, I'll remember. Right.

We all think, but you won't. But then you're busy and you get distracted and you're never going to go back and fix it. Or it's late at night and you just want to go home and you're just, you know, just not going to do it. So don't do it. Although I'm sure it'll probably happen again for some reason or another.

Oh, I'm sure it will. It's like FP and A when you're in the middle of the night trying to load that budget and the numbers don't tie and you're finally like, just plug it. I'm going to bed. I don't care anymore. We'll figure out the million dollars later.

Just insert a plug line. Yeah, great.

You know, generally not good ideas. We've all been there. When you're tired enough, sometimes you do it, but it doesn't mean it's, it's not going to come back to bite you. So I would love to know the story of how you built the Corporate Finance Institute into what it is today. How did you get into training?

Sure, yeah, happy to talk about that. It's sort of a bit of serendipity, if you will. A bunch of things came together, but after working in corporate finance for a while, I realized I wanted to move up through an operating company like, like Goldcorp where I worked, for example, be an executive or who knows, maybe a CEO someday. And I realized that all, all these great executives had awesome public speaking skills. They were really comfortable talking to investors, to all the employees at the company. I wasn't very comfortable public speaking and I thought, hey, what's, what's a way I can do some public speaking? Well, if I design a course about financial modeling and go deliver it at the university where I live in Vancouver, you'd be seat would be great public speaking experience. So I, so I did just that. And doing that got me connected to a company called MDA Training, which was actually hired by this university to do financial modeling training. So I was actually competing with them without even really realizing what I was doing. Because I kind of hacked my way in to go teach this course that MDA was like, paid to teach that got me connected to them. And they said, hey, why don't you work with us and teach with us? And so I did a little bit on the side, but I said, look, ultimately I don't want to be a. A live instructor. I want to, you know, be an entrepreneur or an executive or something. And. And we came together to start Corporate Finance Institute with some training materials that they had developed over the years. You know, they've trained countless global banks. I've even gone to one of their training programs in London for Deutsche bank for a week, where we trained, you know, hundreds of new analysts at Deutsche Bank. So it was quite a thing to behold, actually. But. But that's how. That's how it all got started. And then I went on to work@shoes.com and while working@shoes.com I was obviously like, very deep in the sort of E commerce and, and SEO space. And I realized from looking@shoes.com business that organic sales were much better than paid sales. Might sound super obvious, right? But it was like, hey, if you could build the whole business on organic traffic, that would be the ultimate way to build an online business. So I focused a huge amount of effort on articles and content creation for SEO for Google search, but then ultimately for YouTube and basically all the organic channels, which had this nice virtuous cycle of then feeding back into content for the E learning business. Right, which created more marketing content and getting that cycle going. So that was a big focus in growing the business. And then maybe the one other thing I'll add as well was that at the time, everyone in the online training space just had a collection of courses. There was really only one certification out there that was cfa. And like all finance professionals kind of defaulted to cfa. But the program's mostly focused on portfolio management. Right. Which is not relevant for a lot of people in finance. So I thought, hey, there should be an alternative to that. There should be something that is extremely practical and useful for a bunch of other finance roles like FBA and investment banking and so on that do financial modeling that. That doesn't cost a fortune or take four years to. To complete, like cfa. The pass rate on cfa, I think all the way through last time I checked, is like 30% or something through all the levels. So I was like, okay, that's not working for a lot of people. And that's what, that's what led us to create the FMVA and the other designations that we've created along the way.

Got it. No, that's helpful. I appreciate you sharing that. And yeah, you know, I see a lot of people think, should I take cfa? And I'm like, if you're in corporate finance, it's really, really not relevant. There are areas where it can be helpful, but there are a lot of other certifications you can take. I wouldn't take it just because it's well known.

That's right. It is a badge of honor, though, or an indication that you are obviously smart enough and hardworking enough to get through it. So I think that could be, in and of itself a great reason to take it. And it's, you know, no disrespect to it. It's a great. It's a great program. It just doesn't work for a lot of other people, I think.

Yeah, there's different ways to do it. It's not the only one. It's a great program. Now, I did. I did Level one. I've had Rob Langrick, if you know him, who. He manages a lot of the content for cfa. He's over kind of a number of the programs there. I've had him on the podcast. And, you know, if you do it, you're definitely dedicated. There's no question you have to put in a lot of time to pass cfa. I remember how much I studied for level one and then just realized, not really going to use two or three. I'm going to spend my time elsewhere.

Yeah, but if you want to be a portfolio manager, like, oh, absolutely critical. You have to do it.

Yeah, great. If you're. Yeah, I agree. If you're working portfolio investment, there's areas where you want it and it's fabulous. There's other areas where you have to decide if it makes sense.

Yeah.

Well, what I want to jump into. When you and I chatted ahead of time before coming together to record the episode, one of the areas we talked about was the importance of strategy. Right. We always hear technical skills and, hey, you got to be good at Excel and know your shortcuts, understand your accounting. But I think a lot of times people don't realize the role strategy plays in modeling. So I'd like to get your thoughts. You know, what role does strategy play when you're building models?

Yeah, that's a great question, because I don't think this gets talked about enough. But, uh, it's absolutely critical in, in building a useful financial model. Right. I. I want to. I often think about things as, like, the high level, big picture or the nitty gritty details. Right. That are both critical for a world class financial model. You need to have that big picture and the detail. Now it's easy to get dragged into the detail of the formulas and the functions and, you know, really sort of detailed calculations. But if you've lost sight of like, wait a minute, does this even fit with the company's strategy? You know, the model's not going to be that useful actually. So. So there's that. Another thing is strategy to. A big part is about trade offs and strategic choices. Right. So it's easy to be looking at scenarios in a model and say, oh, what if we increase prices or decrease costs and change all these assumptions and variables. But again, like you have to tie that back to the strategic choices or sort of mission, vision, purpose, big. The bigger picture of things that the business has said that it cares about. Right. Or otherwise, you're just sort of doing this exercise, you know, on your own, in isolation. It's not going to be very useful. So. So that's another comment that I'll make just about strategy and financial modeling.

Yeah. Funny. I had a boss and I really like the way he put it when you said trade offs. He goes, strategy is about closing doors. There's going to be more opportunities than you have time or resources for. You have to decide which doors to close and which ones to leave open. And I really like that way of how he explained it because it's sometimes we just want to do everything. I'm sure you struggled with that as you were growing. CFI is getting distracted by opportunities that really may not have made sense to the core business.

Absolutely. And I love that analogy about the doors because I think about that one. I think Jeff Bezos used it too, but he added one extra layer to that which is like there are one way doors and two way doors. And this is also important in strategy. Like if you're going through a one way door, you can never go back. You have to think very carefully and strategically about if you want to go through it. Now these. But there's a lot of doors actually that, you know, it's not that big a deal. We can go back and forth. Maybe changing price. Example of something where you can go back and forth. Right. So. So there's that as well, which I think is interesting and Absolutely. With cfi, like staying focused on what works, what adds value for our students. Right. Like our core principles and all that, all that kind of stuff. Absolutely. It's a big part of running a company.

Yeah. No, I Mean, I think it's true for any company. Right. You got to kind of figure out what your core principles are and how you stay true to your strategy. We've all seen it. There's so many companies where you're like, how does that fit with strategy? You know, the example I gave, I worked at American Express and we started prepaid cards for the unbanked and underbanked. And it's like, how does that really fit with American Express's image, its strategy, its brand? And the reality is it didn't. And they reorganized that whole department and then sold it off once they had eliminated a lot of the cost.

Right. I mean, if their brand is about exclusivity and luxury and like you sort of by definition, then how can you go in this other direction? So that's an interesting example, right?

Yeah, yeah. And there's others like that. You know, some of these airlines trying to be low cost airlines with a regular cost model, it's not going to work. Like, and the other one I've always loved is I had someone who say, you know, strategy, you'll be able to see in the bottom line, if you have a good strategy, you're going to have above average return. You should be able to see it in your financials. Maybe not immediately, but over time.

And I would say strategy coupled with execution, you know, like, what's the quote? It's like amateurs talk strategy, professionals talk logistics. That's. I think it's a military expression. But it's only to say that like a strategy without execution is nothing. And you know, that's just something else that I think back to tie back to financial modeling. Right. Is I think the model can help you see the execution. Like you have this strategy, but once you break it down into all the steps that are required to execute on it, you know, from the people you have to hire to, to, to, to all the things you have to do. It's like, wait, does this, can we actually execute on this? You know, with a set of reasonable assumptions or not?

Yep. And that leads me to two questions. First one is, you know, how does a modeler get comfortable discussing strategy? You know, making sure the model makes strategic sense? Because I think sometimes the modeler feels like I'm just here to build the model, right. And put in the assumptions, but they'll see things that they can tell, like, this doesn't make sense or this does no line. How do you get comfortable having those conversations?

You know, I think a great place to get started, whether you're at a Public or private company is to look at the public companies because there's so much out there on their strategies. So if you're at the public company, you look at that. If, if it's private, look for the comparable, that's public. Okay. Go to the IR section of their site, look at the quarterly earnings calls. Like, listen to those calls. Look at the slide decks that they put together. They're going to talk a lot about strategy in there. Listen to the equity research analysts ask their questions. They're going to ask, you know, great questions related to strategy. And then you can also even get like the, the proxy statement or some other filings that'll have the CEO's objectives. Right. So if you're thinking all the way back up to the CEO's objectives, like, you can't get much higher, higher level than that of like, are these decisions and things we're talking about down here, do they map like back up to some corporate objective that, that we've publicly stated? Right. So I think that's a good way to get comfortable because first you're, you're reading about it, you're seeing questions or listening to questions that are being asked, and then you can start to like, bounce those off people at your company. Just talk about the industry and the strategy with people. I think that that is a great way to get started.

I really like how you talked about just the importance of reading the company's financials, the statements, the strategy. Right. Public companies, they're going to state all that right there in their 10Ks, 10Qs, their investor relations, those calls, they're going to let the public know how they're thinking about things and what the risks are. And so much that you can bring into strategy. And listening to some of those, you get to see the questions that analysts ask often around strategy, and that may inform some of the questions you're going to ask. And then also just knowing the company's goals, you know, what's the CEO trying to accomplish and you know, what we're building in this model, does that align with that or is it totally different?

Exactly, exactly. Paying and paying attention to the industry. Right. Like, what's, what are, what are other companies doing in the industry? Because that, that leads to great discussion, right? Just bringing it up with colleagues of like, hey, did you notice that one of our competitors is doing this or doing that? Okay, what does that mean vis a vis our strategy? You know, you, you build the muscle, let's say, of, of reading about and talking about strategy? And then I think it'll naturally make its way into the, into the financial modeling, at least, hopefully.

Yeah, I agree. And the second thing you talked about, you know, there's strategy and then there's execution. You mentioned the logistics earlier.

Yeah.

And when you're building a model, how do you think about that? Because I mean most of that happens after the model. But is there things you should be thinking about like, is it possible to execute this? Are these realistic assumptions? Is that what the modeler should be looking at? Kind of from that execution standpoint is more the validation to say, is this possible and pushing back if things don't seem achievable?

Yeah, I think that's right. I think maybe there's a bunch of places we could jump off from that question. You know, one is about assumptions, right? Like are the assumptions that are required to, to hit this realistic or doable? You know that that's one place like I, I like to think about the assumptions above what I, what I would say is like above the revenue line. So it's like what are the activities and the things you need to do that ultimately lead down to revenue? To me that's, that's a guide to some degree, you know, like, like let me just give you a really simple example. It's like, I mean if you were building a financial model for Chipotle and you were thinking about their revenue, I just happened to recently see this example. That's why I bring it up. Their CEO has an objective. One of his like three objectives is the number of restaurant locations that the company reviews each year. And, and then you sort of realize like, okay, they're reviewing three or four hundred new restaurant locations every year. If they want to double revenue, like realistically, how many restaurant locations can they review in a year? What does that mean for the team? Like you think of then? Because this will connect to say like fixed costs or not. Right? Like do you, a lot of times companies think they have a fixed cost structure so they have operating leverage, but the reality is like actually if you want to weigh scale up revenue, you're going to actually, some of these so called fixed costs are actually going to behave more like variable costs. You're gonna have to expand your team and so on. So you know, there's this kind of a circular exercise, if you will, of going through assumptions and then numbers in the model, strategic objectives and just like working your way through all of them. And so I don't know if that made any, if that was coherent or.

Not, but that was helpful. I get what you're Saying there's a circular in the sense of, you go through the strategy, you put in the assumptions, you got to look at the outputs and say, hey, based on these assumptions, does this pass a certain level of a sniff test? Does this even seem achievable? Because we've all been there. I'm sure you've done it. You look at a model, you get all done, you look at the number and go, either there's a formula messed up or an assumption doesn't make sense, because that's not possible.

Yeah, exactly.

Yeah, I, I've definitely done a few of those. I still remember somebody giving me a number of like, you know, $10 billion. I'm like, you didn't question this. You know, the industry is only like five. We're not going to double the industry by launching our product.

No, exactly. And, and yeah, and then that this will connect to scenarios as well. Right. Because scenario analysis, of course, a big part of financial modeling and, and maybe even strategic planning, you'd say. But I think you really have to dig into those scenarios with a, with a strategic lens to see if they make sense. A lot of times, in my view, the scenarios that are thrown into a model like your classic upside case, downside case, base case, are not grounded in strategy at all. Like, they're just like, hey, what if, what if our revenue grows way more than expected and our costs go down for some weird reason? Like, you know, sort of, sort of interplays between variables that are unlikely to actually happen. I think you want to be very thoughtful on your scenarios and your sensitivity analysis and understanding, like correlations between, between things in the business. Right. That might move together or move or move separately from each other. So that's, that's just another thought as well.

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I fully agree with you on scenario. I think sometimes we confuse sensitivity and scenario and kind of mix them in a way that's not good versus, you know, a good example. Use. Let's take Tesla. You know, if Tesla is building a case, one case would be all right. If we, if we end credits that has been Talked about on EVs, what does that look like? Then all your assumptions are based on a case. And you could also decide what are the management decisions we're going to make if the scenario happens. Which I think is the more important part than just having the numbers right is how does that impact the decisions we're going to make. Like for recession, if I build a business case that says the recession's coming next year, what's the trigger to let me know I should start following that case and what are the things I should be doing differently because of that? Not just, well, I got base high and low, which we've all done, you know, and then we walk away and go, okay, I feel good, I've done my scenarios. Now we stick in one number and we just go forward.

Yeah, I like what you've said because you're now connecting it to like KPIs and sort of more of a reporting lens. Right on. What are Those metrics and KPIs you want to be tracking that are connected to the model but are part of like monthly, quarterly, whatever frequency meeting and reporting you're doing? Yeah.

So I'm curious, you mentioned, you know, analyzing things through a strategic lens. Is there like a strategic framework you'd like to use throughout your career or any kind of methodology that's helped you?

Yeah, that's a, that's a good question. I mean there are so many frameworks and methodologies out there. Right. Almost build a mosaic with all these different, you know, they're often like two by two matrices and things you probably know all the classic ones. I don't think any one is better than the other. I think it's about trying a number of them and seeing what provides insight for you. If you want to start with a SWOT analysis because it's, it's really simple to get things going. Start thinking internally and externally about your business and your industry. That's, that's a good jumping off point. I really like the strategy house, which is, which is a one page framework that kind of brings everything together. So it's like literally the shape of a house with the roof is like the vision and the mission underneath that are like the must win battles or strategic choices that you're making. Beneath that are the strategic initiatives or like projects that you're working on. And it's all supported by capabilities and people and culture. Something like that. Right. So the reason I like this one slide is you get a quick bird's eye view of like how do we, how do we execute the vision or the mission? What are the key projects that we want to work on? I like the simplicity of that, you know, so that's nice as well. And finally I think you want to just be grounded in first principles thinking. Right. About sort of the what and the why of, of the business. We mentioned trade offs earlier. Right. Like also having sort of a mental framework that thinks about trade offs, not just like we'll do everything or what have you. So, so there's that. Then we, we could talk about execute. We already talked about execution a bit. But then you could say okay, I. How does this fit into the planning cycle? So I also like frameworks that you have your annual planning cycle that obviously includes budgeting and like the CFO Office and the COO's office, connecting that with the strategic planning that goes on across the company. Right. As well.

A lot of stuff there. And I like how you mentioned 1 pagers are always helpful. I think starting with simple frameworks is always a good way to go because there are some frameworks that can be really complex and there's a lot of simple two by two matrix and there isn't one. Right. Framework. Right. There's a reason there's dozens of them.

Exactly, exactly. There's no silver bullet. If only it could be so easy that there's this one secret framework you use and you'll be off to the races. Right. I think you just gotta, you just gotta try a bunch of stuff and see, see what works.

Well, if you find it, let me know because I'm sure we make a lot of money off it.

Yeah. You and I can launch something with that.

So true. So I'm going to ask you a question. Kind of wasn't on the list was you're talking. It got me thinking about it. You've built a lot of models over your career. You've done a lot of training. Is there a favorite industry you like to model? Like one in particular that you enjoy kind of thinking about and working on models?

Well, I can just comment on. Okay, maybe two things. One that was very interesting was the mining industry because there is so much modeling that takes place before revenue like to get from the material that's in the earth of like rock that has a grade of metal within it and then has to go through extraction, processing, refining, smelting, etc. Etc. To revenue. That part of the model in mining is enormous and is very so. So I found that fascinating to, to be involved in building. I actually built the corporate model that we redid the corporate model at Goldcorp. So it's like quite an undertaking to get you know, whatever 100 rows it was to revenue was fascinating and then was helpful for me later. But I guess I really like, you know, being well with CFI and shoes.com where I've had experience in consumer businesses. I really like you know, thinking about let's say funnels of traffic and, and users and conversion rates, you know, to, to, to get you to revenue. So I personally I'm passionate about like online businesses and conversion rates and that kind of thing. So anyway it's. And it's also fairly simple to model which I like.

Yeah, no, those are fairly straightforward. Unlike I know mining can be complex. I've had some mining guests on and I was having a conversation very recently with someone that's doing a lot of modeling for pharmaceuticals.

Right.

And that's a really hard one because it's all optionality and weighing risk and it might be 10 years before you even collect any revenue. And so it's like how much money are you willing to spend knowing there's a chance that this may never even generate any revenue.

Totally. And if you have like yeah, imagine it's pretty binary, right. You have a blockbuster drug that just takes you to the moon or you, or you flop on a whole bunch. So I imagine that would be interesting. I've never built a pharmaceutical model but yeah, so many, so many types of models out there.

It really is. Yeah, I haven't built a pharmaceutical but it was just interesting to think about and that whole portfolio approach just so different than what I built. So I want to ask you a little bit. You started your own ventures, kind of your own family owned investment firm. So do you have a favorite investment you've made today? Tell us a little bit about that.

I mean I guess, I guess the one that I like talking about the most is an investment I made in a ready to drink tequila beverage called Olay, which I think is making its way to the United States now. It started in Canada but it was a tremendous growth story for like, like in the ready to drink beverage space. Tequila is really hot recently and there's like a strong trend in place for ready to drink Tequila Beverages. So the, the founder of this business built an incredible brand. And I really, I really admire, you know, people that have built great brands. So he nailed, like, he, first of all, he nailed the formula and the taste of the drink, but then he nailed the marketing and the distribution. And so it's really cool business. And it was actually recently acquired, so I didn't get to hold it for too long, but it worked out well financially and it was really fun, like getting to know the founder and builder of that, of that business.

Fun. And how, how do you pick the. Kind of pick the investment you're going to go for? Like, what, what attracts you to a deal?

It's just like, honestly, I don't focus on any particular sector or industry or anything. This came to me through my lawyer. He said, hey, like, you know, this company is looking to raise money sort of privately, if you will, and maybe you'd want to take a look at it. And so it just, it comes in through lawyers, accountants, and your personal network, really, I think for some of these best opportunities. But I would say for direct investing, you know, I just have to believe in, in the opportunity, right? In the, like, the founder, the story, the market, the financials, just kind of tying it all together.

That makes sense. So for you, it's really. There isn't an industry, it's just finding deals that interest you that seem to make sense, that are attractive regardless of industry.

Yeah, exactly.

Makes sense.

Yeah.

All right, so I'm curious, over your career, as you look back on your career, what's the number one lesson you've learned that you could share with our audience that's helped you the most in your career?

Yeah, I appreciate that question. I thought about it a lot and I was. And I've realized that combining two or more unique skills is probably the best way to get significantly ahead. If you're just say, an accountant and like, and that's great, but you want to be the best accountant in the world. Well, you're competing with like, however many million accountants that are just accountants. But if you're an accountant and you are like an AI expert or enthusiast or, and, or a particular industry that you have a tremendous amount of experience in, that's where now you're competing with a lot fewer people and you can propel yourself forward a lot more quickly. So just like any, any two things that form a unique combination, or if you can add a third thing like that, you know, that's great as well. So, you know, in my case, like, combining public, you know, what was Meant to be about public speaking, with having worked in E Commerce, with having a finance background. Right. Like, I combined those three things together to build cfi. So that. That would be my number one tip, if you will.

I think there's a ton of value in that. And I've heard someone call it skill stacking. Right. Having two or three skills that you're really good at that allow you to stand out and have a much smaller pawn, so to speak, that you're competing against.

Exactly. I like that term, skill stacking. I hadn't heard that, but, you know, must be the same thing.

Yeah, yeah, Same idea. I don't remember. Somebody said it on a podcast once and it kind of stuck with me. I like that because it was just an easy way to remember it. All right, so what's the funniest thing, most unique thing you've created a model for in your personal life?

Well, I don't know if it's funny, but perhaps it's unusual, but I did create a spreadsheet for my marriage, which is to actually, like, try to manage, you know, having a partner in life. And I created a dashboard that's like, the things that each of us need to make us happy, the things that we want to do each week. And each week you can go in and update. Update the numbers and actually, like, have a sort of a dashboard report, if you will, on the quality of our marriage and quality of our personal life.

And how. How did you like it when you first came up with that?

She didn't like it as much as I did. I thought it was pretty cool, but didn't really land as well with her. And again, we don't even use it anymore. But at least it was fun to build it. And at least, you know, it. It. We had some good conversations about it. I think it actually shed some light on things, you know, but, yeah, that's probably the most unusual thing that I've built one for.

That's great. Yeah, I was like, I could definitely see where it could shed some light and leap to good conversations. I was just wondering how she received it, because I know what my wife would say. Oh, all right, great. So we're going to move on to the rapid fire section. How this works, you can't say. It depends is an answer. You have to pick a side, realizing there's nuance to all of these questions. Then at the end, you can elaborate on one or two that you're most passionate about to kind of explain, hey, here's why I gave the opinion. I did Here's a little more nuance. So the first one, Circular references and models, yes or no?

No.

Vba, yes or no?

No.

Horizontal or vertical model? Do you prefer multiple sheets or kind of putting it all on one sheet?

100, vertical 100.

I like it. Dynamic arrays, yes or no?

No.

All right, that will answer the next one of should we do fully dynamic models? That would be no as well. External workbook links?

No.

All right. Named ranges, yes or no?

Yes, but let me explain later.

All right, we'll give you that one at the end. Do you follow a formal standard like FAST or some of the smart or others that are out there for your models?

Well, I'd say I follow CFI standards that we've created.

Yeah, you created your own. All right. Should financial modelers learn Python in Excel for other people?

Probably yes. For me. No, I have not.

I haven't either, so I get it. What about power Query for other people?

Yes.

All right, how about Power Bi?

Yeah, definitely. Yeah.

All right. Will Excel ever die?

No. And I can, I can also explain why on that later if you like, but no.

All right, we'll let you do that 1. Will AI build the models for us in the future?

Yeah, definitely, to some degree.

Okay. What about cell protection? Should we be using that in our models?

No, don't bother.

All right. Do you believe financial models are the number one corporate decision making tool?

Like if I had to pick one. Yeah, I would say, I would say definitely not the only. But if there's. But if you're rank, stack ranking them. Yeah, sure.

Yeah, yeah. Not saying the only, just kind of the biggest. Would it be at the top of the list?

Yeah.

All right, what's your lookup function of choice? Choose Vlookup, Index Match, xlookup something else.

It is definitely Index Match match.

All right. I, I figured that's probably where you would go. And your favorite Excel shortcut. Okay.

If we're talking keyboard shortcut. If it's keyboard shortcut, it's Control R for sure. All day long it's always Control R. But if it's like a more of a function, I would say go to special like is.

That's fabulous.

F5, I think as a, as a right different kind of shortcut.

Those are two great ones. All right, you wanted to elaborate on one and two, I believe, circular references or maybe with something else. What were the ones you wanted to elaborate on?

Oh, well, I was saying for named ranges.

That's right.

I actually don't really like using them except to make a dynamic chart. So there's a cool way you can use named ranges and like an offset function so that when you add more data to a table, the chart will capture that and update it so you don't have to do all the selecting of your chart. But generally speaking, I don't like naming ranges or cells or things like that in models. I think it makes it harder for other users and sort of for auditing and other reasons. But so, so it's like to me, one use case for named ranges.

Okay, fair enough. And then on the Excel dying you mentioned, you share your thoughts, why it's never going to die?

Well, because if I step all the way back and ask what myself, what is Excel? If it's a spreadsheet, like, meaning a sheet that is a grid with rows and columns, that interface is never going to go away. Like, I can't think of any other way to analyze numbers that's not in a grid. That's very useful to me. So, like, I think Excel itself is going to change massively with AI, and the way we use it is going to change and everything, but I think we'll still want to go back to this interface that's a series of rows and columns.

And I agree with you. Whether Excel survives or not, and I always say it will die because everything dies, I don't see the spreadsheet interface ever going away.

Yeah, yeah, okay, good point. If we're saying, like a zero hedge, everything's dead in the long run. Sure.

But, yeah, well, it depends on how you define it. Right. And since I get to ask the questions, I make sure I win.

Nice.

I couldn't resist. Got to have a little bit of fun. But I, I totally know what you mean. I mean, like, obviously in the short term, Excel's not going to anywhere. It's going to change, it's going to adjust. But that, like you said, the row column interface, it's hard to replace. It's fabulous for so many things.

Absolutely. And I mean, where else would you go to brainstorm or plan something that, like. Right. You know, when you just want to try on an idea. Right. Like, where else are you going to go but a. A spreadsheet to play with those numbers, so.

Yep, I hear you. All right, so we're going to wrap up here. I have two more questions for you. The first is if you could offer one final piece of advice to our audience to be a better financial modeler, what would be that piece of advice you'd offer them to get better at modeling?

Well, I hate to ask if I can give two. But since we've been talking technical, appreciate it. Okay, so if we're talking technical, reverse engineering of other people's models, I think is the best way to improve your skills. So what I mean by that is like find examples of models that you think are interesting, that are good or whatever that excites you about them and try to rebuild what they've done. And I don't mean like just like copy, like look at cell A1 and copy one to one like that. I just mean get to the same answers or results that they've gotten to and using it as a guide. And if you do that, you'll really learn. You'll probably improve on their model quite frankly. You'll not only learn how they built it, but hopefully find some ways to make something better. So that's on the technical side. But then since we've been talking about strategy here, I think going back to what we talked about earlier with looking at public companies, CEO scorecards, corporate scorecards, investor decks, and playing around with models that you've got and trying to connect them back to these strategic objectives and just trying to trying to connect those dots, build the mental model or mental framework to see. That would be my other one.

Thank you. Great advice. I appreciate you giving too. I like how you went with the technical and more on the strategic side. So last question, if our audience wants to learn more about you or potentially get in touch with you, what's the best way for them to do that?

Sure. I mean the best way to get in touch would be LinkedIn. Just my profile to my fund. You can find me there at course. Corporate financeinstitute.com you can read more about me there or check out some of my courses or some of my colleagues courses there as well.

All right, well, thank you Tim. I thoroughly enjoyed having you on the show, really enjoyed chatting and thank you for sharing some thoughts on strategy about modeling in general. And I am really excited to share this with my audience.

Oh thanks. It was absolute pleasure. Thanks for having me.

Financial Modeler's 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 the same save 15% when you enroll in one of the accreditations today.