Why Macros are Important for Financial Modeling

 

Financial Modeling teaches you to work with historical information on companies and analyze the company/industry performance on relevant financial parameters. This analysis is then used as an input to build financial models. These models then project the future financial performance of the companies analyzed and hence give us an estimate of the valuation of the companies. Financial modeling is used in every sphere of the financial world. In fact, it is one of the most important aspects of any corporate set up.

In Finance, Macros and VBA for Excel are commonly used to develop and maintain complex financial models. They allow the finance professional to increase efficiency and accuracy as well as providing more flexibility in building models.

A macro is a collection of commands which are executed in a set order.  A macro allows you to repeat operations that you would usually do manually by hand. Macros are much faster, and when written accurately and much more dependable. Macro can perform any task in seconds which can take lots of time manually. It also does all the tasks which can’t be done manually. Macro can help you to record all the actions, if you perform the same commands or actions over and over again, in exactly the same sequence. A macro could be assigned to a button and then it could be operated using a single click and macro could even be assigned to a keyboard command.

Macros are a great way of automating mundane financial modelling tasks that would have taken a lot of time. For example, while preparing a financial model, you need to format certain cells in particular type across all the sheets. Macros will help you to record this repetitive task and help you to copy the formatting across all the sheets.

Macros have made things easier for many of the analytical situations, as it helps to save time and increase accuracy.  It is not necessary to build macros within financial models, they could be used in the group of the data that goes into the model.

Visual Basic For Applications allows a lot of customization beyond what is typically available in Excel. A user type commands to create a macro. Macros allow the user to automatically generate customized charts, reports and perform other data processing functions.

Although it is not necessary to become an amazing VBA programmer in a process to become a good financial modeller, it would be an add-on to have a working knowledge of macros and the language they are built in, Visual Basic for Applications (VBA).