What is “Financial Model Formatting”?
Financial models can be complex…very complex. But good formatting makes them much easier to understand. The total figures are clear to see, it’s easy to work out which numbers go into the total, and the whole model has a consistent look and feel.
Companies also want their colors and branding used consistently in models. This way, different departments can build models, but when put together and sent to a client, all they see is one cohesive model, with the signature look and feel of the company.
So clear and consistent formatting is paramount. Some common conventions are to have totals are clearly shown, headings clearly stand out, column A narrow, column B wide, and the remainder the standard width. Colors are either used for branding or have a clear purpose, e.g., blue numbers are hardcoded.
Key Learning Points
- Financial models can be complex; however, good formatting makes them easier to understand
- Consistent formatting allows for individuals to collaborate more efficiently
- Formatting styles can be standardized for a company or department
- Consistent formatting is everything
How Do You Format A Financial Model? Financial Modeling Best Practices
Here is a great example of a simple model with clear formatting:
You can find the spreadsheet shown above in the downloadable file that accompanies this article and use it to practice your formatting.
Row 1 and 2 banner colors – Clear banner colors have been used, and the same colors will be on every sheet. The company name is in row 1 and has the largest font size. The tab name is in row 2 and is slightly smaller font size but is still large to signify its importance.
Column width – Column A is super narrow, only width size 1. Why? Only the most important headings are put in column A. If a user wants to jump to the next heading, they can press Ctrl and the down arrow and quickly jump many rows. Column B is wide and can accommodate labels with many words (think “Consolidated balance sheet for company A and B”). We recommend width size 40. The remaining columns are all a normal width to accommodate simple headings in row 4 and simple data underneath
Headings above a table – The headings in row 4 have been formatted differently so that they stand out and aren’t mistaken as part of the data underneath. Here they are white font on a dark blue background, in keeping with the banner colors in rows 1 and 2.
Negatives – the negative numbers in row 10 are clearly shown, in this case with parentheses around the number. The parentheses make it easier for a reviewer to check total numbers at the bottom, as they can clearly see which numbers should be subtracted rather than added to get the total.
Totals – in row 16, a bold font has been used, and a single underline is above the total, while a double underline is below. Single underlines can also be used above a subtotal, without the double underline.
How to do the Formatting?
The ribbon is your first source for formatting buttons (see below) while clicking the arrow in the bottom right-hand corner of the various ribbon sections will get you to more options:
Which Format is Used for Financial Values?
You have a choice when formatting financial values. Either you can format each and every cell with a currency symbol, or (and this is our preference) simply add a currency symbol in the heading, such as “All figures in millions of USD unless otherwise stated”. Now you can dispense with the currency symbol from every cell, leaving a cleaner look.
How to Format Numbers
For more information on specifically formatting numbers, see our blogs “Financial Model Formatting – Numbers” and see “Financial Model formatting – Cell Styles” for how to do it quickly and efficiently.
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