Excel / financial modeling skills required (experienced hire) and how to develop?

Question

Once in a while, I see consultants mention that they do "complexed modeling" in projects. For post MBA roles, what would be a consultant's required excel skill and financial modeling skill in these 2 different circumstances: (1) generalist role (2) Corporate Finance / M&A practice?

I'm curious how complexed the model would be in consulting, as I would imagine many projects (such as quantifying synergy, assessing an acquisition's impact, etc) wuold also be quite quantitative and the impact needs to be quantified.

Also, as consultants join from different background, how do they develop excel / financial modeling skill on the job?

Answer 1

Hi there,

I wouldn't worry too much about this until you join -you should get trained extensively at the company through orientation, intranet portal resources, and on-the-job learning.

Of course, it shouldn't be a surprise that a Corporate Finance/M&A practice role requires more excel/financial modeling skills than a generalist role!

In terms of skills, you will need to be quite proficient at Excel, depending on the client/project. This does not mean knowing VBA! Just as an example, you'll need to know functions like indexmatch, pivot tables, data cleaning/manipulation, modeling, etc.

Answer 2

Hi,

Interesting question - sharing my perspective having done numerous models during my time in consulting, across a wide range of projects.

There is no ‘definite’ bar on what your ‘required excel skill’ is, because it really depends on the needs of the case. I've done models that were extremely simple (e.g. similar to back of the envelope kind of quick calculations), and models that were extremely complex (e.g. optimizing suggested cost based on multiple variables).

I would say that as long as you have a decent ability to use the key functions, that would suffice for your average model:

Pivot tables
Lookups: Index Match, Index Match Match, V/H Lookup, or X lookup (in the newer versions of excel)
Sums: Sumproduct, Sumif
Goalseek
Conditional formatting

In terms of how excel skills are built on the job - 95% of the time you really learn through doing. So no other way than to jump in the deep end of the pool :)