Financial Modeling
How to Pay Less Tax on Cryptocurrency Gains (Legally)
Do you invest (or trade) in cryptocurrencies? If so, does your accountant help you decide what’s the best investment strategy to MAXIMISE your AFTER-TAX PROFIT? When you lodged your tax return, did your accountant reveal that you could have paid significantly less tax if you did ‘X’? It’s too late to do anything now. You…
Read MoreAccuracy over Precision in Forecasting
Here’s a targeted interview question to test a job candidate’s financial modeling skills: “Can you build a model even when you don’t have all the relevant data?” The answer should be Yes. You don’t need all the relevant data, as long as you have identified what type of information you need, and the minimum information…
Read MoreSeperation of Concerns in a Financial Model
Here’s a targeted interview question to test a job candidate’s financial modeling skills: “Should you place inputs, calculations and outputs CLOSE TOGETHER in your model?” The answer should be NO. Your model should clearly distinguish between inputs, calculations and outputs. “Separation of concerns (SoC) is a design principle for separating a computer program into distinct…
Read MoreHow to Hire a Financial Modeler for Your Business
If you’re running a business, you’ve probably made decisions on-the-fly and have done quick calculations in your head. But when you need to make decisions that require you to consider a multitude of factors, and the factors influence each other, it might be too complex for you to model the consequences of potential decisions in…
Read MoreDebugging DAX Formulas with Excel
Solving a problem in DAX can prove conceptually challenging due to the limited tools available to debug a formula. When you need to write a complex measure, you can write several measures, then combine them at the end into a single measure. However, what if you also want to inspect what rows are included in…
Read MoreThoughts on Inheriting a Financial Model
I see financial modeling as a subset of software development, so software development principles also apply to financial modeling. Here are some quotes that reflects this perspective: The competent programmer is fully aware of the strictly limited size of his own skull; therefore he approaches the programming task in full humility, and among other things he avoids…
Read MoreHow to Transform Non-Normal Statistical Data to Normal and Back Again using Minitab
When performing statistical analysis on data that is not normally distributed, I often need to transform the data into a normal distribution. This can be done easily with Minitab using the Johnson Transformation, however, the summary statistics output (e.g. mean and confidence interval) is in the transformed scale. I need to transform the output back…
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