Panel Discussion: Navigating the Career Web of Financial Modelling

The Journey into Financial Modeling

• Carolina’s Journey: With over 20 years of experience, Carolina started in FP&A before evolving into financial modeling. She emphasized the importance of flexibility and adaptability when building models, highlighting how she developed her framework to address frequent changes in client needs.
• Olumide’s Story: Olumide shared his late introduction to financial modeling, discovering it only a year ago. As an accountant with extensive experience in management accounting and taxation, his curiosity was piqued after failing to replicate a model he found online. His journey reflects the importance of lifelong learning and the value of continuously expanding one’s skill set.

Understanding the Framework for Financial Modeling

Carolina introduced her “Tactic Financial Framework,” designed to offer flexibility and adaptability in financial models. She described it as a cycle where assumptions and calculations are continuously refined. The framework allows users to revisit earlier stages without having to start from scratch, making models more resilient to changes in business scenarios.

Skills and Knowledge Gaps in Finance

The panelists agreed that understanding the connection between the three financial statements—P&L, balance sheet, and cash flow—is a significant gap among finance professionals. Carolina emphasized that this foundational knowledge is critical, regardless of whether you ever build a model yourself. Mastering this connection allows finance professionals to better analyze business decisions and develop strategies.

AI and the Future of Financial Modeling

There was a lively discussion on whether AI will replace financial modelers. Both Olumide and Carolina believe that while AI is a powerful tool, it is unlikely to replace the critical thinking and business understanding that humans bring. Instead, AI should be seen as an enhancement, not a replacement.

How to Get Started in Financial Modeling

For those interested in getting into financial modeling, Olumide offered practical advice:

• Excel Skills: Proficiency in Excel is a must.
• Basic Accounting Knowledge: Understanding the accounting equation and the basics of financial statements is essential.
• Continuous Practice: Financial modeling requires regular practice, and resources are readily available online.

Challenges and Opportunities in Financial Modeling

The panelists noted that financial modeling is a highly rewarding but demanding field. Some of the challenges include:

• Complexity: Overcomplicating models with fancy formulas can make them difficult to use and audit. Keeping models simple and user-friendly is key.
• Staying Updated: As tools and methodologies evolve, professionals need to keep learning and adapting.

Work-Life Balance and Career Growth

When asked about balancing work and life, Carolina shared that being your boss offers flexibility but also keeps your mind constantly engaged. Olumide, on the other hand, is focused on intense learning and growth, dedicating most of his time to refining his modeling skills.

Q&A Highlights

• Differences between Business Analysis and Financial Modeling: Olumide explained that business analysis focuses on the current state of a business, while financial modeling projects future scenarios based on assumptions.
• Using Power BI for Financial Modeling: Carolina noted that while Power BI is more suited for reporting, it can be combined with Excel to build effective financial models.

The journey to mastering financial modeling involves a blend of technical expertise, business understanding, and continuous learning. Whether you are just starting or looking to refine your skills, focus on mastering the fundamentals, embracing simplicity, and staying curious. Financial modeling is more than just Excel skills; it’s a way to understand and predict the financial health of businesses in a dynamic world.