The modeler should not lose sight of a model’s main purpose: communication. A financial model must communicate the results of numeric analysis: a model is therefore worthless if it fails to present information effectively.
The Standard differentiates between what is effective practice for the calculation and control sheets of a model, and what is effective practice for presentation sheets. Each of these model areas has a distinct function, and, per the famous architectural maxim, form follows function.
FAST 2.05-01 Use Presentation sheets to present the model’s results
Presentation sheets form one of the basic requirement of any model and must be effective in presenting numbers, charts and tables. What sheets are placed in the model is central to its usability and fitness for purpose. Presentation sheets can be described in the form of descriptive analysis, control, report or documentation sheets.
• An analysis sheet describes the calculation in descriptive form,
• a Report sheet provides the output in terms of charts and tables. The difference between the two is that the analysis sheet shows every calculation required for the analysis whereas Report sheet is a crux of specific details only.
• A Control sheet presents both inputs and outputs. Sometimes, a model user wants a Control sheet from where they can control the whole model by altering few numbers and check the specific output without shuffling a sheet.
• Documentation sheets provide important information about the models, for example external inputs, exported links, and methodology.
FAST 2.05-02 A model must completely explain how it works without the need for other software applications to present the model outputs
Generally, a model can be divided into input, calculation and output. A well structured model contains sections which explain how the model is used and allows the reviewer and model user to use the model as a complete decision analysis kit.
FAST 2.05-03 Provide a description of the modeling standards and method used to build the model
The description must be precise and provided in terms of points so that the user can get the general model overview in short.
FAST 2.05-04 Provide a description of the model’s flow
A simple model flow is always input calculations output. A complex model may have a counter-flow of calculations, so the flow must always be described on a sheet to give the user a macro view.
FAST 2.05-05 Provide keys to color coding, abbreviation, Named ranges, and functions
Keys are crucial to make the model easy to understand. Standardizing the use of abbreviations, Rangenames and functions helps the user to understand the model fast and allows for key pages to be re-used.
FAST 2.05-06 Selection of chart type should correspond to the nature of the data being presented
The FAST Standard does not provide specific guidance on the choice or design of charts in a model: there is no need to replicate the excellent work done elsewhere. In the area of effective design of charts and the visualisation of data, we recommend FAST modelers to familiarise themselves with the work of Edward Tufte, especially “Visual Display of Quantitative Information” , and Stephen Few’s book “Show Me The Numbers” . Being more ‘applied’ in nature than Tufte, Few’s publications give modelers a highly systematic and practical guide to the design of effective charts and tables. We recommend that FAST modellers follow Few’s recommendations in the presentational sheets in their models.
FAST 2.05-07 Charts should be formatted for ease of comprehension of the main messages being communicated
Again we refer modelers to the work of Stephen Few in this area.
