According to the information mentioned in the course, which of the following color schemes is best practice for financial modeling?
Answers
Explanation:
1)Why financial model color formatting matters:
Financial model color formatting, which refers to the way the information in a financial model is displayed, helps keep the visual element of the financial model clean and easy to read for the user. As stated previously, the three factors of a good financial model are consistency, efficiency, and clarity. Proper formatting aids in all three of these.
2)Recommended formatting: text color
The first and easiest method of formatting a financial model is to use a consistent color scheme to annotate different types of cells and data. Here is a recommended color scheme that is quite commonly known amongst financial analysts and other users of financial models:
Blue: Inputs, or any hardcoded data, such as historical values, assumptions, and drivers
Black: Calculations and references to the same sheet
Green: Calculations and references to other sheets (note that some models skip this step and use black for these cells)
Red: References to separate files or external links
Coloring the text and contents of cells helps the user understand the different types of data working within the model, as well as the flow between the different pieces of data. For example, blue text inputs will likely not have any predecessor data, so it becomes a logical starting point to follow formula paths.
Answer:
blue
Explanation:
blue Nd black is a good colour scheme