FAST 1.02-01 Arrange sheets so that calculation order flows left to right
FAST-1.02-01.1 except to group Input and Results sheets
The rationale for this is to improve general readability and detection of inadvertent logical circularities, not calculation speed. Necessary deviations (counter-flows) to this ‘thinking order’ should be:
1. kept to an absolute minimum, and
2. clearly marked when not otherwise obvious.
However, grouping Input and Results sheets at the front of a model can assist readability and comprehension.
FAST 1.02-02 Do not attempt to optimize calculation layout and user interface / presentation on the same worksheet
There is almost always a trade-off between design layouts that are optimized for clarity of calculation and those that are optimized for user interface and presentation. Separate these objectives between Calculation and Presentation sheets to prevent a Model design that is poor on both fronts.
Workings sheets need not (and probably should not) look ‘pretty’ or be particularly printable, certainly in toto, particularly if this increases construction and maintenance time to sustain appearances that serve no fundamental benefit to the modeler or the user.
FAST 1.02-03 Separate flags and factors onto dedicated sheets
The foundation of any financial model is laid down by the time sheet which defines the time line of the model. Time sheets should contain all flags and partial period factors (PPFs). If timing logic is simple, then indexation factors may be included with this logic on ‘timing and escalation’ sheets, often labeled T&E sheets.
FAST 1.02-04 Separate Workings sheets into functional ‘chapters’
Workings sheets should be functionally sub-divided, for example revenues, costs, financing, tax, accounting and so called “one-sheet wonders” should be avoided.
FAST 1.02-05 Minimize inter-linking between sheets
Organizing calculations across worksheets in a workbook should, in part, also be driven by an effort to minimize Exports and Imports. High density of sheet inter-linkages is a sign of poor allocation of logic to specific worksheets. To use the writing analogy, the chapters are not organized with a sufficient degree of autonomy.
Do you have some examples of downloads that illustrate these points? I have been reading some modelling books that have recommended that all calculations should be on a single sheet so just interested to see more about why are saying that sheets should be kept separate.
I am firmly of the view that you should try and do as much as possible in a single sheet, and only start a new sheet when the data you are trying to model does not fit into the same column structure. In other words, if you find yourself repeating the same column structure in a new sheet, then you should seriously consider combining these two sheets into one.
In a practical sense, it is often desirable to keep some calculations separated if the review of these is limited to a small subgroup. A good example is the calculation for deferred income taxes. This complicated subject is usually of little interest except to extent it changes the cash flow. I keep these calculation separate and ask the VP Tax for buy off on the formulas, then agreement with the calculations (if I have time) before presenting the results to executives.