Today lets close some gaps.
Recently I saw this interesting chart on Economist Daily Charts page. This chart is based on World Economic Forum’s survey on how women compare to men in terms of various development parameters. First take a look at the chart prepared by Economist team.
So what are the gaps in this chart?
This chart fails to communicate because,
- All country charts look same, thus making it difficult to spot any deviations.
- We cannot quickly compare one country with another on any particular indicator.
- It does not provide a better context (for eg. how did these countries perform last year?)
But criticizing someone’s work is not awesome. Fixing it and making an even better chart, that has awesome written all over it. So that is what we are going to do.
Fixing the gaps in Gender Equality chart
First take a look at the improved chart. Play below video.
Step 1: Getting the data for this chart
Although folks at Economist have not included source data, the good people at WEF have provided detailed PDF reports (2013, 2012) where all the data is naked and waiting for us, analyst to pounce and go nuts.
I copy pasted table in to Excel.
While 2012 data loaded alright, 2013 loaded in a weird fashion.
So we move to step 2.
Step 2: Cleaning the data
I feel dirty every time I clean a piece of data 😉
But I also like it (cleaning part, not feeling dirty part). I learn some techniques when I am working with messy, sticky and disorganized data sets.
The 2013 data is pasted in to Excel in this format.
From this, we need to transform our data to:
If we know magic, we could point our wand at the table and say something like, Mobiliarbus Datum.
Alas. We are muggles. So lets rely on the most potent magic we know: Excel formulas. Using INDEX + MATCH combination, we can easily convert 2013 data to the format we want.
The actual formula to fetch overall rank (2nd item in the list for each country) is,
=INDEX(gaps2013,MATCH($B5,gaps2013,0)+1)
Explanation:
- gaps2013 is the range where all the 2013 gender gap survey data is copied
- B5 contains the name of the country for which we want the data.
- +1 because we want to get rank, not country name.
For more, read how to get VLOOKUP + 1 item.
Step 3: Set up form controls
Now that we have sparkling clean data, lets create necessary form controls on our output sheet.
We need 2 controls.
- A combo-box (drop-down) control so that user can select what field to sort the report on.
- A set of option buttons to specify which average to compare.
The combo-box is set up to use the list of values shown aside.
Related: Introduction to Excel Form Controls.
Lets link these to 2 cells, named sortCol & avgType on a different sheet. Call this sheet as calculations. All our formulas will go here.
Step 4: Find sort order based on the selected column
This is the tricky part. I am going to give highlights here and point you to a link where you can learn more.
- Fetch the column we want to sort in a range of cells.
If sorting a number column:
- Make the column unique by adding a very small running fraction.
- This ensures that if our data has duplicates, still our formula works.
- Find the sort order of each item using RANK() formula.
- Refer to Sorting KPIs using Formulas article for more on this technique.
If sorting a text column:
- Find the sort order using COUNTIF() formula.
- Refer to sorting text using formulas article.
Step 5: Re-arrange all data in the sort order
Using INDEX formula, rearrange all data according to the sort order.
Step 6: Calculate % change values
Based on 2012 & 2013 scores, calculate % change and place them in the last 5 columns.
Step 7: Calculate averages
Calculate averages (both G20 & all country values) for all the columns and place them somewhere on your calculations worksheet.
Related: Calculating the average of every nth item.
Step 8: Create charts
Here is the process for creating chart for Overall Score (2013). The same process is used to create all the charts.
- Select all the numbers in overall score column.
- Create a bar chart
- Select vertical axis and press CTRL+1 to format it.
- Select “Categories in reverse order.”
- Adjust series gap to 25%
- Set horizontal axis min to 0 and max to 1 and remove the axis.
- Remove vertical axis, grid lines
- Remove title
- Fill chart background & plot background with no color.
- Set chart outline to no outline.
- And you are done!
See the demo aside to understand the process.
Step 9: Add average as secondary series to the chart
Calculate which average to use in the chart based on the avgType value. And fetch that number to a cell.
Now add average to the chart as a line. This can be done by,
- Adding average point to the chart as second series
- Converting this series to scatter (XY) plot.
- Adjusting the X & Y values of the average point.
- Adding 100% positive (or negative) error bar
- Formatting the error bar to make it look like a line.
- Removing any axis, grid lines added in the process.
Step 10: Oh wow, this is getting long. Have a coffee
I guess this is now a fairly long process. But closing gender gaps (or gaps in the gender gap chart) is never easy. So have a cup of coffee or tea. Rejuvenate and come back.
Step 11: Create all other charts
Follow the same process and create rest of the charts.
One easy way to create rest of the charts is,
- Copy the first chart and paste it elsewhere.
- Select the bars and edit the range address in the formula bar.
- Select the average point and edit that too.
- Adjust axis if needed.
- And you are done!
Step 12: Put everything together
Create a nice table like structure in your output tab and put everything together. Re-size and position the charts as needed. Make sure the colors are nice. Add conditional formatting to highlight column being sorted and you are done!
Missing Steps
I have deliberately omitted a few steps in this process to keep it simple. For those of you with a keen eye:
- Using conditional formatting data bars for the % change column.
- Turning on / off last column in the report based on sort selection using conditional formatting.
- Adding data labels to the country names based on the sort selection.
Download this Excel chart
Click here to download this Excel chart. Play with it. Explore the chart settings, formats, formulas and controls to understand it better.
Conclusions – What does the Gender Inequality Chart say?
After all this analysis, 2 things are clear.
- In most countries, women have high equality with men when it comes to health or education.
- The real gap seems to be in politics & economical development of women.
While this may seem like common sense, it also means, World Economic Forum people should measure inequality on some more parameters. There is little point tracking and analyzing indicators related to health or education (especially in OECD or Western countries).
What do you think?
Want to fill gaps in your Excel knowledge
While no one appreciates gender inequality, we all love awesomeness inequality. There is nothing wrong in wanting to be more awesome than your peers. And here is how you can be unmatched…
- Using Panel charts to understand data
- Spot matrix charts – alternative to radars
- Analyzing performance of stocks using charts
- Suicides & Murders data – interactive analysis
- Visualizing world education rankings
- Survey data analysis with in-cell charts
Want some challenge… How would you analyze this data?
If you want some challenge, go ahead and download the file. It has all the data for 2012 & 2013. Analyze it and share with me your charts. You can email me at chandoo.d@gmail.com or upload your files somewhere and post the links in comments. I would love to see how you can analyze and present this data.
62 Responses to “Introduction to Financial Modeling using Excel [Part 1 of 6]”
Oooh! Chandoo - are you looking to outperform the Altman Z-Score?
I'm all ears 😉
Many thanks, Paramdeep. Looking forward to the remaining parts of the series
Thank you Paramdeep. I look forward to following the series.
Those interested in Financial Modelling may also find this site interesting:
http://www.fimodo.com/
Hi Chandoo,
Really looking forward for this awesome financial modeling journey 🙂
All the very best..
Regards
Rohit1409
Hi Chandoo,
it seems the future is not away when we will have a new software/spreadsheet as competitor to Microsoft Office/Linux etc.......Hats Off to you..
KEEP SMILING
GURU
@apex, clarity: Thanks...
@all: I do hope that you have started creating the model for the simple case given.. Lets see, what according to you all is the best way forward. So your views on the best practices for the template for valuation?
The planning process varies depending on the project and type of data I am looking at.
If I am doing a cost impact study based on actuals, verses a cost impact study to estimate future cost, verses reviewing historical data then creating a model, verse having to review historical data, apply it to a draft model, update the model based on the draft outputs and the presentation then sometimes repeat the process a few times.
Revisions are an absolutely necessary part of corporate financial modeling especially for the presentation sections. A good presentation will be revised multiple time. There are just to many elements which cannot be planned for, especially with ad hoc reports/models.
Revisions are leading cause of errors, and time spent tracking down errors. The more complex the model the more important revision control is. I would be interested in a section on revision control and good methodologies to determine the effect of changes on models. That is without having to due detail review of the whole model over again.
Hi Paramdeep,
I can't wait for the continuation of this series. You have done a great job in making technical terms appear simple and easy to understand. This article is also very useful in our line of business, in fact i will be featuring this article in our site. Of course the credits will go out to you.
Many thanks and keep it up!
Drew
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@Drew: Thanks! Hope that you found the tutorials useful. Feel free to get back with any queries.
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Great information, i also want to learn financial modeling, how to learn
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chando bhai i m tired for looking financial modeling detail but i cant find it anyway. so plz kindly send me full detail of financial modeling from beginning levelo to final. where i learn complete modeling procedure n order to become professional
You noob, you won`t become a professional like that, you need to do it on your own and learn as you go
@Nadeem Bhai,
The 6 links to the tutorial at the top of this post, build a small integrated financial model step by step. We are also running a complete 8 weeks course on financial modeling (similar to excel school). But that is almost 50% complete right now. If you want to join, you can join the next batch (probably starting in Jan/ Feb)
Feel free to get back, if you have any queries regarding the model/ steps in creating the same
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I want to learn how to build a financial model
Dear Lulama,
You can use this tutorial to learn to build a financial model. We also run a course on financial modeling and project finance modeling. The details can be obtained from:
http://chandoo.org/wp/financial-modeling/
You can consider joining that as well.
I would strongly encourage you to join the newsletter to get the updates about financial modeling and the next batch starting for the course.
I want to learn thorough excel and financial modelling thing !!! I am a chartered accountant..CAn you please suggest a detail syllabus that should be learn by me. Also suggest any classes that would cover everything in excel and financial modelling related things.. I stay in mumbai, so please suggest a class in mumbai or any books..byyee.. thanks ..
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Hi Vivek,
We do conduct the financial modeling course online as well as in Mumbai. We start with the basics of excel and build a completely integrated financial model in the class. For details you can look at:
http://chandoo.org/wp/financial-modeling/
or
http://www.edupristine.com/courses/financial-modeling/prisitne-fm-offering
Please describe to me various type of financial modela and demonstrate how a model can be build.
Regards,
Dear Immanuel,
This series of articles does exactly that. If you go step by step through the articles and create the excel sheets on your own, you will understand how to create an integrated financial model.
Alternatively, if you are looking for video sessions, you can consider joining our course:
http://chandoo.org/wp/financial-modeling/
It is expected to reopen somewhere in mid july.
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Thanks Paramdeep this is great!
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Paramdeep Hi! A bit ignorant here, but let's ask anyway. Can I access "recorded" video sessions apart from following the step by step articles?
Thanks!
@Marius: Yes, we do have a training program with recorded video sessions. If you are interested, you can enroll for the same. The details can be obtained from: http://chandoo.org/wp/financial-modeling/
i want to know about the scope of financial modeling.i also want to know after doing financial modeling course what are the job prospect, like where i can found job so plz send me full detail of financial modeling from beginning levelo to final.
I am interested to join your Financial modelling class cos am involved in a new business. But I have a Macbook Air with Excel for Mac installed. Would that work with your program?
Dear Charsiew,
The complete training program is built using Excel 2007 with MS windows. Though there is nothing specific to Microsoft in the training. I think a few people have joined the program and are using MAC. If you write an email to me on paramdeep @ gmail.com, I can send you the email ids of those participants and you can get to know their feedback and difficulties in using the program.
This is great, when does the next batch start?
Dear Karan,
The course is in recorded format and you can register for the same as soon as you want.
Paramdeep, thanks. I'm venturing into financial modelling for the first time and from the little I've read from your website already, I'm sure I'll find your resources very useful; thanks once again.
Dear Seun,
I am glad that you are finding the resources to be useful. Feel free to send in comments with your feedback and further questions.
hie ppl...I jst wantd a small favour cn smone help me out in calculating EBITDA, along with its working, from wipros annual report 2011-2012, link - http://www.wipro.com/investors/annual-reports.aspx
...PLZ plz... i am having a submission tommorow.
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Nice article.
In designing Excel Financial Models I design the user interface as friendly as possible and structuring the input variables in the workflow of the client's operations so that they can flow through the impact of the input variables in Excel using buttons and macros and giving the model transparency.
Cheers
Arthur
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Another step to build any financial model is to do a financial analysis beforehand. This normally helps to design and come up with good projections.
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