It’s only Practice that Makes Perfect

By Andrew Grigolyunovich, CFA, CFM, FMVA
Chairman of the Financial Modeling World Cup

Intro


Every month when we start putting together a new stage of the Financial Modeling World Cup, there is a trade-off for our team. Shall we make the stage easier so that the people score more points and feel better about their skills, or should we make it harder so that there are more things FMWC participants can learn? Sometimes we get to extremes as we did in the very first stage of FMWC 2020, probably scaring off some of the first-time participants. We probably have never been (and don’t plan to be) on the other extreme when the cases are just too easy for most of the participants.

Anyway, the more stages we create, the better practice our team gets. One of our top performers, Diarmuid Early, has calculated that by the end of 2021 FMWC will probably produce more cases than ModelOff has produced over 8 years. Well, that’s the advantage of the monthly format that we have.

Our team has been invited to write cases not only for our own competition. I have been an exam grader and exam content creator for the Financial Modeling Institute since 2019. Those of you who have done CFM-level exams have probably noticed this. FMWC team was also partnering with Danielle Stein Fairhurst to create mock exams for FMI’s exams, as both our companies are the Approved Training Providers for the FMI. Finally, there were numerous trainings in financial modeling and finance in general for the corporate clients that I have created cases for.

Practice Makes Perfect


Solving financial modeling cases, probably, is the best way to actually train oneself for the finance profession, financial modeling in particular. At least that is something I’ve learned from my personal experience. Before starting AG Capital, my own consulting practice back in 2010, I’ve been working as a financial analyst and CFO for companies that are deemed large by Latvian standards. However, Latvia is quite a small country, and finance departments typically are not too big. In any case, there was no one to teach me financial modeling and I’ve learned everything mostly from Excel tutorials. Still, as I now review my old models, they were not world-class. Actually, it was only after I started taking part in ModelOff, saw how things could be done, and practiced a lot, when the level of my modeling output took up.

Facing different sets of problems helps as well. Quite often, people are limited to a specific set of problems in their work environment – if a person is a financial analyst for a retail company, as I once was, he will never create a renewable energy modeling project as a work assignment. Still, such assignments could increase this person’s skills and improve the outputs of his/her work.

FMI exam takers face the same challenge to an even greater extent. As soon as you have to study for a CFM exam (Level 2), not even mentioning the MFM exam (Level 3), you have to be able to create a model for any of the 12 topics in the curriculum (not just revenue or expense modeling but also topics like group financial consolidation modeling, scenario analysis, etc.). This is why we have created a “CFM bundle” from FMWC cases – to allow anyone to prepare for the CFM exam.

We have also created two other bundles. The “Beginner Bundle” is a collection of financial modeling cases to be solved by people who just start their journey in the financial modeling world. The other one is the “Advanced Bundle” – a collection of the most difficult cases we have created since FMWC was launched.

FMWC for Corporate Clients


We will soon launch “FMWC for Business”, a new service that would be created for corporate clients. One of the services that we offer is oriented towards HR departments. FMWC could help them in a couple of ways. First, we could create hands-on corporate financial modeling training. This could be a formal in-house training or just a flexi-time assignment for the team with comments, feedback and solutions.

Second, we have a special offer for candidate testing in finance-related skills. We provide FMWC infrastructure to test any number of candidates not just in financial modeling but also for any other finance-related position. The questions/cases are written for each position separately. BTW, we have already completed the pilot project with Amrop, a worldwide executive search company and it was a great experience for both companies.

Oh, there will be a third one too! We will launch a job board for financial modeling related positions. So if you have an opening at your company – please send the job description to us and we will publish it on the FMWC website free of charge.