After finishing a model, we should always be checking our model Always audit the work and consider printing it to help you do this There are three main checks we're going to do, the first one is a sense check. Does the output make sense? If your sales go from 100 to 101 to 102 to 250, that 250 doesn't look like it makes sense Do a structure check, we want to make sure the formula structure is consistent and as expected So if I've got a formula which is in column F and it should be linking to lots of other cells in column F You go through it and make sure it says F1 plus F2 times F3 times F4 If you saw a row G in there, then that would be a structure issue Our last one is a stress check, the stress check is where you put a silly figure in instead of the figure that's there And you see how other cells change So for instance, if I were to double my revenue, what might I expect? I might expect some cost to go up, I might expect net income to go up, I might expect my equity to go up So stress check your model, check that all those things that you expect to change do change There a number of keyboard shortcuts that can help you If you have a formula that says A1 + A2 + A3; if you then press the F2 button on your keyboard within the formula That will then highlight A1 + A2 + A3, which is really useful, it shows you where those cells are on your screen If you press control open square bracket, that will then jump you to the first variable. If will jump you to A1 Now that's particularly useful if it's on a different tab, so it will jump you to a different tab A1 If it's on the same tab, it will actually still highlight all of A1, A2 and A3 If you then press enter, it will jump you between A1, A2, A3. So you will have A1 selected first If you press enter, you'll then have A2 selected If you press control open square bracket and you jump to a different tab, you can then press F5 and then enter It will take you back to the start! Let's go back to our original formula, A1 +A2 + A3 If I were to press the F2 button, I'm now in the formula. I can then select different bits So let's say I select the A1, if you then press F9, instead of showing in your formula A1 + A2 + A3 It will show the number in A1 So that's really useful if you want to work out, "what was in A1? I can't remember" It will then show it to you If you selected A1 plus A2, it will then calculate that sum For jumping around, you can use ALT M P to trace your precedent cells i.e what cells have gone into the cell I'm in ALT M D will trace you to dependant cells, so cells that rely on the cell you're in ALT M K is error checking, you can check for things like circular references And now because of all these ALT M P, M Ds and M Ks you've got blue and black arrows everywhere You can press ALT M A, those arrows disappear Lastly, if you want to show all of your formulas, so instead of having numbers on your screen, you want to see the underlying formulas You can hit ALT M H Or alternatively control and then the acute accent button. On most keyboards, that's next to the number one key What can we do to help us either avoid or spot errors? Well firstly speed, you do not need to build your model very very quickly Building a model with integrity beats speed every time Next up, avoid too much complexity in one cell. If you've got 10 things happening in a cell, break it down into 10 separate cells In addition use formatting to help you, if you've got cells with hard coded numbers input, then have them as one colour If you've got cells with formulas in, have them as another colour If you've got cells with assumptions in, have them as a third colour? Lastly, how to do checking! First suggestion here is to narrow down the universe, don't check an entire model in one go Just check a portion of your income statement. Also, do you checks in the one column before you copy everything to the right 10, 15, 20 years! That way, if you know it works in this one cell, then you'll know when you copy across it must be correct