April 10, 2009

Financial Modeling & Conceptual Understanding

Filed under: School — Robert John Ed @ 6:40 pm

I have a take home financial test this weekend as well as a Managers Anatomy & Physiology.  I don’t sweat the latter.  The former is going to be similar to pulling teeth.  It’s relatively high level stuff, leveraged buy outs, calculating beta coeffecients and whatnot.   These are the kinds of things that I’d never even heard of before school.  It’s likely that I learn more from finance than any other class for a few good reasons.  First, it has the best teacher in the school.  Second, it’s unfamiliar territory.  If you landed on a new continent and continually were introduced to new terrain and ideas, it’s inevitable that you would learn more than treading the same weary paths.

What strikes me during this class is how easy it is to understand the concepts of the ideas, yet how building a model in calculating it is so incredibly difficult.  The differential in students and their ability to solve such problems is very distinct.  Of course, some have experience in such activities whereas I do not, but that’s not really the point.  The point is despite their experience, their minds are have an uncanny ability to feel at ease with numbers.  They find comfort there.  My mind doesn’t work the same way, or at least isn’t similarly at ease.  I’ve often stated that there is almost no chance I’d be expected to build a model for a company out of school, if it was expected of me the role or company isn’t doing itself favors.  Still, the importance of the subject is not lost on me.  What’s more, viscerally the subject makes sense, so there’s an odd dichotomy between feeling at ease with the conceptual matter and a turbulence toward the modeling.  My hopes are that having a solid understanding of the principles governing the use of NPV, APV and option based managerial project valuations will be enough to add value to a cross functional team from a marketing perspective.  I have a feeling it will.

Unfortunately, I still have the test to do this weekend.  It takes me ridiculous amounts of hours to complete a model which is regardless inevitably incorrect; it’s hardly something to look forward to for a Saturday morning/afternoon.  What’s truly depressing is that I place enough weight on this knowledge that my future includes another advanced course and potentially financial statement analysis as well.  It’s like signing yourself up for an ongoing tutorial in banging your head against the wall in hopes of strengthening neck muscles.  Bah.


1 Comment »

  1. Sorry I have to add this as a comment(I couldn’t find a contact form), but I was wondering if you wanted to do a blogroll exchange? I have a similar site, and I think it could help us both.

    Let me know, thanks!


    Comment by Sam — April 11, 2009 @ 5:39 pm

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Create a free website or blog at

%d bloggers like this: