Overview
Efficiency and performance are critical when working with complex Excel financial models. Optimising these models for speed not only saves time but also enhances productivity and user experience.
This article explores key strategies and techniques to optimise Excel models, improving their speed and overall performance in financial modelling tasks.
1. Streamline calculation processes
Simplify complex calculations by reducing unnecessary formulas, volatile functions, and circular references. Consider utilizing array formulas, which can perform multiple calculations in a single cell. Additionally, use calculation settings such as manual calculation or iterative calculations only when required to minimize recalculation overhead.
2. Minimise data range and formula dependencies
Reduce the number of cells involved in calculations by narrowing down the data range and minimising formula dependencies. Restructure formulas to refer only to the necessary cells, avoiding excessive cross-references that can slow down the model’s performance.
3. Efficient use of Excel functions
Select Excel functions carefully and leverage their efficiency. For example, prefer INDEX/MATCH over VLOOKUP for faster lookups, and use SUMIFS or COUNTIFS instead of array formulas for conditional calculations. Explore specialized functions like AGGREGATE and OFFSET for specific requirements, as they can offer performance benefits.
4. Optimise data tables and pivot tables
When working with large datasets, use data tables and pivot tables to summarize and analyze data efficiently. Group data, apply filters, and enable data compression to minimize the data size and improve overall performance.
5. Use named ranges and tables
Utilize named ranges and tables to enhance readability, simplify formulas, and improve model flexibility. By assigning names to specific ranges or tables, it becomes easier to reference them in formulas, making the model more maintainable and efficient.
6. Manage workbook size
Keep the size of the Excel workbook in check by removing unnecessary formatting, images, and hidden data. Minimize the number of worksheets and external links. Compress images and use appropriate file formats (e.g., XLSB) to reduce file size and improve loading and saving times.
7. Enable calculation options and performance settings
Explore Excel’s calculation options and performance settings to optimize the model. Disable automatic recalculation when not needed, utilize manual calculation mode, and adjust the calculation iterations and precision settings to strike a balance between accuracy and speed.
8. Consolidate formulas and use array formulas
Consolidate repeated formulas into a single cell or range, reducing the overall calculation load. Consider using array formulas to perform multiple calculations in a compact form, improving efficiency and reducing computational complexity.
9. Utilise data validation and conditional formatting sparingly
While useful, excessive data validation rules and conditional formatting can impact performance. Use these features sparingly and only when necessary to avoid unnecessary calculations and rendering delays.
10. Regularly refresh and recalculate data
Refresh and recalculate data at appropriate intervals to ensure the accuracy and integrity of the model. This ensures that the model incorporates the latest information and eliminates any potential discrepancies that may arise due to outdated data.
Conclusion
Optimising Excel models for speed and performance is essential for all financial modelling professionals. By streamlining calculations, minimising dependencies, utilising efficient functions, managing workbook size, and implementing other optimisation techniques, financial modellers can enhance the speed, responsiveness, and overall efficiency of their Excel models.