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Creating and using links in FAST financial models
The document discusses financial modeling and links in FAST (Financial Analysis Standard Template) models. It states that financial modeling should be collaborative to reduce errors, speed up development time, and lower costs. It then provides guidance on creating and using links in FAST models, including how to link to calculations on other worksheets and best practices for linking to avoid issues like "daisy chains".
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Emphasizes the importance of collaboration in financial modelling, mentioning the FAST Standard and the Financial Modelling Handbook project.
Explains the significance of links in FAST financial models and introduces the concept of calculation blocks and worksheet structure.
Describes standard formatting conventions in FAST, how to create and manage links, including row anchoring and copying methods.
Details the steps for linking ingredients from different sheets, the formatting of imported links, and guidelines for copying links effectively.
Discusses the pitfalls of daisy chains in financial models and offers solutions to ensure all links point back to source calculations to avoid errors.
Creating and using links in FAST financial models
- 3. Financial modelling shouldbe collaborative. Collaboration reduces error, speeds up development time and lowers cost. The Financial Modelling Handbook is a collaborative, crowd-sourced guide to building better financial models using the FAST Standard.
- 4. Kenny Whitelaw-Jones talks aboutfinancial modelling for a living. He’s leading the Financial Modelling Handbook project. He hopes your name will be on the cover when it’s published.
- 5. Links are acore component in FAST financial models. This guide explains what they are for, how to create them and how to use them.
- 6. In order tounderstand the role of links in FAST financial models, we recommend that you first read about calculation blocks. Click on the image to right to download a quick introduction to the use of calculation blocks.
- 7. To get themost from this guide you should understand the reasoning behind the worksheet structure in FAST financial models. Click on the image to right to download a quick introduction to FAST financial model design.
- 8. FAST employs anumber of standard formatting conventions. These are referred to in this guide. If you are not familiar with the FAST Format macros, click on the graphic to find out more and install.
- 9. When we’re buildinga new calculation block, we first have to gather up our ingredients. We do this by creating links. Image: Scandic Hotels - Flickr
- 10. In this example,we are modelling revenue. Retail spend per domestic passenger has been calculated in row 93. We need to create a local link to this calculation. Start in Column E. Tap =, and move to the label of the calculation you want to call up.
- 11. By linking tothe label in column E, you have an easy check that you are linking to the correct ingredient. It also helps keeps labels consistent throughout the model.
- 12. By default, linksshould be row anchored. This makes them easier to use again elsewhere in your model since they always point back to the correct row. Row anchor the link by tapping F4 twice.
- 13. Hit enter andcopy the link right across the timeline. There are numerous methods to copy across. The quickest and easiest is to use the F1F9 Utility macros.
- 14. Having further builtout the block, we now need to link to an ingredient from the time sheet – the forecast period flag.
- 15. The process startsin the same way, type = in Column E. Then use control + page up / down to navigate to the time sheet.
- 16. When linking toa line item on another sheet, the cell selection indicator hides in the intersection of the freeze pane. It emerges upon pressing the down arrow.
- 17. . . .You are now in a position to copy the link across the time line, just as you did at step 4.
- 18. In FAST FinancialModels, links to calculations on other worksheets are given a different format than local links. FAST recommends a blue font for imported links. Imported links, marked in blue, may be copied and pasted elsewhere in the model; local links, marked in black, may only be copied and pasted on the worksheet in which the original link sits.
- 19. Shift+Spacebar selects therow Control+Shift+M will add blue font for import formatting
- 20. The steps involvedin copying a link are: - Shift + spacebar to select the link - Control + c to copy the link
- 21. Navigate to theplace in the model where you need to use the ingredient. This is normally in the construction of another calculation block. - Shift + spacebar again to select the destination row
- 22. Finally, hit enterto paste down the link. Remember: only imported links (i.e. links to calculations on other sheets) can be copied to different sheets within your model. Local links (i.e. links to calculation on the current sheet) can only be copied on that sheet.
- 23. “Daisy chains” occurin a model when a modeller links to an existing link. This is a major cause of inflexibility. The FAST recommendation is to:
- 24. It’s normal tosee long chains of links in models. These make it hard for reviewers to locate the original calculation or input. It takes time and is frustrating to trace back through all the intermediate links to find the source
- 25. X Whenever one ofthe intermediate links is deleted, none of the links further along the chain will work. X Most modellers have had the experience of the whole model turning to #REF whenever anything is deleted. This is caused by daisy chains.
- 26. Instead of creatingdaisy chains, all links should point back to the source calculation.
- 27. This allows anylink to be deleted without causing #REFs across the model.
- 28. By copying existingrow-anchored links, all links will point back to source calculations. If you only link to inputs, or calculations, you will avoid daisy chains in your model.