When building financial models, we'll often find that there's some best practices for formats that are commonly used, or sell styles that are commonly used. The first of these is the hard coded figure. A hard coded figure is usually seen with a blue font. I can see here in columns C, D, and E that I've got historical revenues and historical operating costs. These could have been obtained from the financial statements and input directly as hard coded figures. When we go to the future, we notice in row four in columns, F, G and H, we have got revenue growth assumptions. Here, the formatting that's been used is a blue font, but now it has a light blue background. These are assumptions. They're still hard-coded figures, hence the blue font, but they are assumptions which could change because they are forecasted figures. We're not sure they're going to happen. So these are cells where we could change the inputted figures. An alternative color that we sometimes see for assumptions is the same blue font, but with a yellow background. The last color we have is the black font. If we go back to our historical period, so columns C, D, and E in row 11, you can see we've got an operating profit calculation. The formatting here is a black font, which indicates that this is a calculation, a formula, or a function. So we can see this has been calculated as revenues minus operating costs.

A last color that we sometimes see is a green font where we see cells which have a green font inside. That means that cell is linking directly to other worksheets, so if we want to delve into the details of that particular cell, we would have to go look into other worksheets to find the source cells.