Financial Analysis & Excel Mastery Checklist

Financial Analysis & Excel Mastery Checklist

Situational Financial Analysis

• Have we reviewed all relevant financial statements?
• Have we identified the major changes in revenue, costs, assets, liabilities, and equity?
• Have we identified unusual or concerning financial trends?
• Have we calculated the ratios that actually matter to the case?
  • Profitability
  • Liquidity / short-term solvency
  • Efficiency/activity
  • Leverage
  • Growth
  • Cash flow
• Have we considered the organisation's industry when interpreting ratios?
• Have we identified the financial strengths of the organisation?
• Have we identified the financial weaknesses?
• Can we explain what the numbers mean, rather than simply reporting them?

Comparative Analysis

• Have we compared the organisation with its own historical performance?
• Have we completed appropriate horizontal analysis?
• Have we examined multi-year trends?
• Have we used vertical analysis / common-size statements where useful?
• Have we compared performance with relevant industry benchmarks?
• Have we calculated CAGR where it helps explain longer-term growth or decline?
• Have we looked at both the overall trend and individual year-to-year changes?
• Have we identified where the organisation is outperforming its peers?
• Have we identified where it is underperforming?
• Can we explain why the comparison matters to our recommendation?

Market Sizing - If market sizing is relevant:

• Have we clearly defined the TAM?
• Have we clearly defined the SAM?
• Have we clearly defined the SOM?
• Are our assumptions realistic?
• Have we used current or appropriate benchmarks?
• Have we avoided simply presenting a huge market number to make the opportunity look attractive?
• Have we accounted for:
  • Geography
  • Customer segments
  • Regulations
  • Pricing
  • Customer adoption
  • Competition
  • Organisational capabilities
• Can we explain how we moved from TAM → SAM → SOM?
• Does our SOM represent something the organisation could realistically achieve?

Estimation

• Have we estimated important numbers before building a detailed model?
• Have we clearly stated our assumptions?
• Have we used reasonable round numbers where appropriate?
• Have we sanity-checked our calculations?
• Do our estimates make sense relative to the size of the organisation?
• Have we used estimation to identify potential problems early?
• Can we explain the logic behind our estimate?

Budget

• Does every major recommendation have an associated budget?
• Have we separated:
  • One-time costs
  • Incremental costs
  • Ongoing costs
• Have we considered potential savings?
• Are the costs appropriately scaled to the organisation?
• Is the investment large enough to matter?
• Is it small enough to remain realistic?
• Have we used industry benchmarks where appropriate?
• Have we broken large numbers into understandable units where useful?
• Can we explain how we arrived at the budget?
• Does the budget support the recommendation rather than simply appear beside it?

Financial Impact

• Have we modelled the financial impact of the recommendation?
• Have we identified the major revenue drivers?
• Have we identified the major cost drivers?
• Have we distinguished fixed and variable costs where relevant?
• Have we considered incremental versus existing revenue and costs?
• Have we calculated the resulting profit impact?
• Have we considered cash flow where appropriate?
• Does the financial impact appear material to the decision-maker?
• Can we explain the financial story without requiring the judges to read the spreadsheet?

ROI - If ROI is relevant:

• Have we clearly defined the investment?
• Have we identified the expected return?
• Have we calculated ROI correctly?
• Have we distinguished annual ROI from cumulative ROI where appropriate?
• Have we compared ROI across alternatives when useful?
• Have we recognised that ROI does not account for the time value of money?
• Are we using ROI because it answers the decision question—not simply because it is easy to calculate?

NPV - If NPV is relevant:

• Have we identified the initial investment?
• Is the initial investment represented as a negative cash flow?
• Have we identified the appropriate discount rate?
• Are future cash flows clearly identified?
• Have we considered the timing of cash flows?
• Have we calculated NPV correctly?
• Do we understand whether the result creates or destroys value?
• Have we avoided confusing present value of future cash flows with NPV?
• If using Excel, have we used the appropriate NPV/XNPV function for the cash-flow structure?

IRR - If IRR is relevant:

• Have we included the initial investment as a negative cash flow?
• Are the cash flows in the correct sequence?
• Have we calculated IRR correctly?
• Does the IRR make economic sense?
• Have we considered whether the timing of cash flows makes standard IRR appropriate?
• If actual dates matter, have we considered XIRR?
• Have we avoided relying on IRR alone when comparing mutually exclusive investments?
• If IRR and NPV conflict, have we given appropriate weight to NPV?

Comparing Investment Alternatives

• Have we compared alternatives using consistent assumptions?
• Have we considered:
  • ROI
  • NPV
  • IRR
  • Initial investment
  • Cash requirements
  • Risk
  • Timing
  • Strategic fit
  • Implementation requirements
• Have we identified the best alternative, not simply the alternative with the largest number?
• Have we considered the opportunity cost?
• Have we compared the recommendation against the status quo?
• Can we clearly explain why our chosen alternative wins?

Valuation - If valuation is relevant:

• Have we identified the appropriate valuation approach?
• Have we considered whether an:
  • Asset-based
  • Market-based
  • Earnings-based
  • Cash-flow-based
  • approach is appropriate?
• If using DCF, have we clearly identified the major assumptions?
• Have we considered WACC / discount rate appropriately?
• Have we considered terminal value?
• If using comparable companies, are the comparables actually comparable?
• If using precedent transactions, are the transactions relevant?
• Have we considered more than one method where appropriate?
• Have we presented a reasonable valuation range rather than false precision?
• Can we explain why we believe the valuation is credible?

Sensitivity Analysis

• Have we tested the assumptions that matter most?
• Have we identified the key value drivers?
• Have we tested variables such as:
  • Revenue growth
  • Sales volume
  • Price
  • Costs
  • Margin
  • Discount rate
  • Timing
  • Adoption
  • Market share
• Have we considered:
  • Worst case
  • Base case
  • Best case
• Have we considered whether the recommendation remains viable under downside conditions?
• Have we tested the critical assumptions, rather than simply changing random numbers?
• Have we used Excel Data Tables or Scenario Manager appropriately where useful?
• Can we explain what the sensitivity analysis tells the decision-maker?

Risk and Robustness

• Have we identified the major financial risks?
• Have we identified the major operational risks?
• Have we identified the major strategic risks?
• Have we identified the major external risks?
• Have we identified what could make our financial model wrong?
• Have we identified the critical assumption?
• Have we tested it?
• Have we considered the risk of being too successful?
• What happens if demand is much higher than expected?
• Does the organisation have the capacity to handle success?
• Have we identified appropriate mitigation strategies?

Excel Model Quality

• Are all formulas working?
• Have we checked for formula errors?
• Have we checked for accidental hard coding?
• Are assumptions clearly identified?
• Are inputs separated from calculations where practical?
• Are formulas consistent across rows and columns?
• Have we checked for incorrect cell references?
• Have we checked signs, particularly negative investments and cash flows?
• Have we checked units?
• Are percentages formatted consistently?
• Are dates correct?
• Have we checked that totals actually add?
• Have we performed a reasonableness check on the final results?

Excel Presentation Quality

• Are large numbers formatted clearly?
• Are thousands and millions abbreviated appropriately?
• Are decimal places necessary?
• Are units clearly identified?
• Are percentages easy to interpret?
• Are charts readable?
• Are chart titles meaningful?
• Are unnecessary gridlines and clutter removed?
• Can the audience understand the chart without studying it?
• Does every financial visual communicate an insight?

Financial Storytelling

• Does every major financial number answer a business question?
• Have we moved beyond "what happened?" to "why does it matter?"
• Can we explain the financial impact in plain language?
• Does the financial analysis support the strategic recommendation?
• Have we connected financial results to the organisation's objectives?
• Can we explain the most important number in one sentence?
• Can we explain the biggest assumption in one sentence?
• Can we explain the biggest risk in one sentence?

Recommendation Test - Before finalising the recommendation, ask:

• Can we state the recommendation in one sentence?
• Can we explain the investment clearly?
• Can we quantify the expected impact?
• Do we have evidence it will work?
• Have we identified our critical assumptions?
• Have we tested the downside?
• Have we compared all the alternatives?
• Have we justified the timing?

The CFO Test - Can you answer:

• How much will it cost?
• How much will we make?
• When do we get our money back?
• What is the ROI?
• What is the NPV?
• What assumptions drive the result?
• What happens if those assumptions are wrong?
• What is the biggest financial risk?
• Why is this better than the alternative?
• What happens if we do nothing?
• If your team cannot answer these questions, the financial analysis probably isn't finished.

Final Financial Readiness Check

The Numbers Accurate Complete Reasonable Consistent

The Model Clean Tested Flexible Understandable

The Analysis Relevant Comparative Insight-driven Decision-focused

The Recommendation Financially viable Strategically aligned Tested under different scenarios Defensible

The Presentation Simple Visual Clear Judge-friendly

Numbers don't win cases. Numbers that strengthen a decision do.