Book: Mastering Financial Modelling in Microsoft Excel

Day: Mastering Financial Modelling in Microsoft ExcelOne little miscalculation – and the Spanish Navy ends up with an overpriced submarine that is too heavy to be put in use. Excel can sometimes be more of a curse than a gift, but Alastair L. Day seeks to help with “Mastering Financial Modelling in Microsoft Excel” – with numerous field-tested methods and recipes for everyday problems in corporate finance.

With about 500 pages the book is quite a weighty tome. Day places an emphasis on examples, but first he gives an introduction into the basics of financial modeling on about 100 pages. The didactic quality could be higher here, and the reading flow sometimes suffers from robotic instructions. If you have no experience whatsoever in financial modeling and know nothing about custom conventions, you may feel a bit overwhelmed.

Loads of recipes…
In the second part, things are getting serious: 20 chapters with a total of 350 pages cover typical problems within financial modeling – from analysis, balance sheets and cash flows to WACC many aspects are covered in a modular form. That is appropriate, with financial models often needing certain functions, but purposefully neglecting others.

…but not for hobby cooks
But with little more than 15 pages per chapter the descriptions end up rather short. When it comes to complex issues, you should already have a general idea how to solve the problem in question in order to benefit from “Mastering Financial Modelling in Microsoft Excel”. Even VBA macros which are sometimes included in the solutions mostly lack explanations, which underlines how much prior knowledge you as a reader should bring to the table. Beginners will merely have to struggle through the chapters. A big plus: All examples are well-structured and available on a CD-ROM (or as downloads for those who buy the e-book). What is also very helpful are the check lists, which are thrown in here and there and help to keep an overview over complex tasks within own projects. The book as such is based on Excel 2010, but most examples can also be used with Excel 2007.

Conclusion: In “Mastering Financial Modelling in Microsoft Excel“, Alastair L. Day shows a lot of expertise. The book is full of usable solutions for the finance practitioner – but the often very short descriptions call for solid existing knowledge. Novices in financial modeling should alternatively have a look at “Using Excel for Business Analysis“ by Danielle Stein Fairhurst.

Alastair L. Day: Using Excel for Business Analysis – Mastering Financial Modelling in Microsoft Excel
520 pages
ISBN: 978-0-273-77225-5

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