Advanced financial modelling course: data tables

Data tables can be used to output results of financial modelling, plotting one key variable against another, showing the impact on the main result.  A common example might be plotting the impact of two key inputs (e.g discount rate and long term growth rate) on a key output such as discounted cash flow valuation.

Using data tables in financial modelling: a simple example

This Excel spreadsheet, advanced financial modelling course data tables, shows you how to construct a data table.  In Excel 2003 you can get started with data tables from the "Data" menu item, and then "table".  In Excel 2007 and 2010 you need the "Data" tab, then "Data Tools", "What-If Analysis", "Data Table".

Instructions for constructing data tables in a financial model

If you download the Excel spreadsheet and follow the instructions,  you'll see how to construct a data table.  Data tables can be a little tricky to set up and get working (they need to be set up exactly like the one in the example).  Once they're set up though, they're very easy to update.  In the spreadsheet example, cell B8 could be a complicated result in the Excel model, that many cells feed into.  Cells B6 and B7 are key input cells that are used elsewhere in the model.

Advanced financial modelling course tips: data tables

Data tables are great for highlighting the impact of two key variables on a major modelling result.  But a data table only varies two inputs at a time.  Data tables lose much of their power if you run many tables across many variables - a great huge batch of data tables is not going to help focus anyone's mind as part of decision making.  Implicitly data tables require  judgement and skill on the part of the financial modeller, as it's generally the modeller who decides which variables to use in the data table.

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More advanced modelling training course material is available.  If you would like more information regarding our taught program, please see the full outline for our advanced modelling course.