When does a financial model called a good model?

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When does a financial model called a good model?

A financial model is called a good model when everything can be controlled from one sheet. Why So? once you are ready with the model and now you have to change something and you change that all the changes comes out to be a error in the model will cost you a lot of time.

One thing that need to be kept in the mind is that the model should be a least number driven model, that is may be driven from one unit and change in that one unit to even 99 can give you exact correct figure correlating with 99. 


I usually call it a assumption sheet where all the main data is feed it through which I can drive the whole model. How can I drive the whole model from one sheet, here you see the beauty of a financial model comes from this!

You should make the model in such a way that all the interlinked values main source is this assumption sheet or you can also call it a formula sheet. 

And it should not be your model, it should be a model that anyone can understand and work on very easily. So it should not be just a data sheet but a source of information.

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