When it comes to building a financial model, the FAST standard is used to minimise miscalculations and save companies from losing a lot of money.
However, some of us are still unsure as to what the standard is and how to incorporate it's principles. In this blog we've highlighted some of the key features of the FAST standard that need to be considered.
Separation of worksheets by type; Inputs, Workings, Outputs and Control
Maintain consistent column structure across all sheets
Maintain a consistent timeline throughout the model
Colour code Export Imports
Perform a calculation once (i.e. do not recalculate something that has already been calculated elsewhere in the model)
Avoid links between different Excel workbooks
Calculation logic should flow left to right, top to bottom
Construct all calculations into separate calculation blocks
Calculation blocks should be built such that they can be replicated
Use corkscrew calculations blocks for balance accumulation
The line item
Treat the line items as the smallest indivisible object in a model
Formulas must be consistent across the timeline
You should write formulas shorter than your thumb
You should not write formulas with embedded constants
Provide a unique label for all line items
Use timing flags
Excel features used in modelling
You should not use the OFFSET or INDIRECT functions
You should not use Excel Names
To find out more on financial modelling, from the basics to the more complex, we have a suite of courses authored by Grant Thornton which will help you build the perfect financial model for your business or your client's business.