Sam Sivarajan Highlights from Financial Modeler's Corner Episode 17

Tell me about the worst financial model you've ever seen. The model is simply a numerical representation of some prior deep rooted strategic thinking. I think the worst model I saw was one created by a client and it basically used historical P and L numbers and grew it over a number of years. I've seen several models where the terminal value was over 100% of the total value, meaning there's a framework of process that, you know, modelers can use. The elegance of any model is in the thinking behind it, not the bells and whistles that you put on the page. Keep it simple. Remember who that model is for and what questions it is going to answer. Check your assumptions and the drivers never forget and lose sight of why you're creating the model. It's the bane of anyone's existence, I think. Yeah, I would say it's commandment number one right.