bug in an Excel spreadsheet influenced the outcome of an economic study. Flawed numbers can lead to bad decisions and/or take the credibility out of your presentation. “If the number on this page is wrong, I might as well have to check the numbers on every page....”

I have built my fair share of models (mostly discounted cash flow valuation models of big companies) and a small bug can make a few billion dollar difference in valuation.

My main strategy against bugs:
  • Simple formulas: plus, minus, times, divided by. 
  • If possible only 2 numbers per formula, intermediate results appear as another line
  • Round up to a unit that leaves you with one digit behind the dot (millions, thousands, etc.)
  • Everything points down, a result always depends on values higher up in the spreadsheet, never the other way around
  • And finally: adhere to the rule that if it looks wrong, it is probably wrong. Averages should be within the minimum and the maximum value, gross margins are usually around 50%, etc. etc.

------------------
Click "view post" to read the full blog entry. If you liked this post, why not subscribe to daily updates about presentation design via email? Just blog posts, no spam. You can find Jan Schultink on Twitter here.