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SMARTGuidelines
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10 SMART guidelines
SMART has been used in thousands of models produced by industry
professionals around the world. This handbook highlights the ten
guiding principles of SMART, demonstrating a best practice approach
to financial modelling.
Powerful scenario analysis
To be truly useful, many financial models need to
evaluatedifferent outcomes in a range of business scenarios. This
type of analysis supports complex strategic financial decisions,
where outcomes will be affected, to different degrees, by a number
of drivers. Successful scenario analysis depends on the underlying
model having: full flexibility in all key drivers, robust timing
architecture and transparent calculation blocks.
SMART addresses all these factors. Its the perfect financial
modelling standard for rapid and robust scenario analysis.
Full technical flexibility
Overly restrictive rules can limit the analytical insights
available to financial modellers. SMART gives analysts full
flexibility to address any analytical requirement, in any potential
business situation, in their specific industry sector. Highly
robust, SMART builds a foundation, scaling up smaller models to
enterprise level consolidation, while still maintaining
quality.
SMART GIVES YOUCONFIDENCEWHEN IT COUNTS
SMART enables consistent quality andmeaningful comparisons
Increases confidence in model transparency
Drastically reduces the risk of errors
Supports quick and robust scenario analysis
Creates a consistent, user friendly approachto modelling
Provides full flexibility for analysts anddecision makers
Benefits of SMART
For more information, visit
www.corality.com/smart
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ITS TIME TO RAISE THE BAR
SMARTFINANCIALMODELLINGMethodology Transparency Flexibility
Presentation
A standardised approach to financial modellingimproves the
analysis and reduces the risk of error
SMART financial models enable smart decisions
We all know a bad spreadsheet when we see one. They contain
black boxes full of messy calculations and hard coding that make
modelling results confusing, unreliable or simply wrong. Its easy
to blame Excel for incorrect financial projections, failed
investments and poor decisions. At Corality, we know different. We
believe Excel is an exceptionally powerful platform for financial
forecasting and scenario analysis if you use it with guiding rules
to create transparency, flexibility and seamless presentation.
Thats why we developed SMART.
Consistent quality, meaningful comparisons
Working with SMART is like having traffic rules: common
guidelines make drivers cooperate everyone is safer and the traffic
moves efficiently.
If all your teams use the SMART methodology consistently, youll
get positive collaboration, transparent calculations and
drastically reduced model risk. Your decision makers will be able
to compare financial models for different projects on a
like-for-like basis. Your teams can re-use modules, supporting fast
yet robust development. Your quality assurance processes will take
a fraction of the time.
Contents
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Adopt guidelines, not rules
Think about the end user
Focus on transparency
Keep it simple
Use an intuitive structure
Communicate a story
Incorporate powerful analysis
Build for the future
Keep the model neat
Make it easy to find errors
SMARTFINANCIALMODELLINGMethodology
Transparency Flexibility Presentation
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Full flexibility enables powerful analysis
Financial models are fundamental for decision makers that seek
commercially insightful analysis. Creating suitable tools and a
culture fit for robust analysis should be the main focus when
designing guidelines for efficient financial modelling.
There are several versions of financial modelling standardsthat
can be seen as too restrictive,not providing financial modellers
with sufficient freedom to produce powerful analysis. There is a
reason we refer to SMART financial modelling as guidelines, an
approach, orprinciples, and rarely as standards or rules. While
achieving absolute standardisation can be seen as the modelling
nirvana, we believe that each situation is different. Many
organisations struggle to meet their clients expectations due to
the restrictions placed on restrictive standardisation of their
financial models.
SMART has been proven to deliver efficiencies and improved
quality in thousands of organisations all over the world because of
its ability to adapt to complex situations, rather than adopting a
one-size-fits-all approach.
Accept exceptions to the rule
Being locked in to an overly prescriptive standard can leave you
feeling crippled and unable to excel in your day-to-day tasks.
Exceptions to the rule can and should happen. As long as you stick
to the guidelines, many exceptions can enhance the analytical
outputs something a model constrained to strict rules would be
unable to do. It is okay to break the rules as long as it keeps an
overall focus on transparency, presentation and flexibility across
the model.
ADOPTGUIDELINES,NOT RULES
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Price sensitivity
Prod
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TIPS FOR SUCCESS
Period start31-Dec-14
01-Jan-14 01-Jan-1530-Jun-14 30-Jun-15
01-Jul-14Period end
Balance B/f
Balance C/fPrincipal repayment USD M
USD M
USD M(27.20) (20.83) (30.87)286.68
286.68
265.85
265.85
234.97313.88
313.88Debt account
31-Dec-13
(313.88)
Customised analysis can improve analysis
Some sections, like an account calculation, benefit greatly from
full standardisation
Focus on the overall spirit of the guidelines transparency,
flexibility and presentation
Focus on improving the majority of your quality issues
first,then step-by-step you can increase the level of
standardisation
Accept the real-life challenges of tight deadlines,
creativeneeds and technical constraints
Accept compromises but never compromise transparency
01
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Register your interest
Each week, well be releasing a new SMART guideline. By
downloading this handbook, youll automatically be the first to
receive each of these updates.
The complete SMART guidelines handbook will be available for
download on our website following the final release.
Please visit www.corality.com if you are yet to register for
updates from Coralitys SMART Campus.
MORE SMART GUIDELINESTO COME...
02
01
03
04
05
06
07
08
09
10
Adopt guidelines, not rules
Think about the end user
Focus on transparency
Keep it simple
Use an intuitive structure
Communicate a story
Incorporate powerful analysis
Build for the future
Keep the model neat
Make it easy to find errors
Coming next...
For more information, visit
www.corality.com/smart
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