Excel Formatting Best Practices

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Excel – Formatting for Financial Models and Data Analyses
This quick reference guide explains formatting best practices

for financial models and data analyses in Excel.
Proper formatting is important because senior staff members,

clients, and counterparties must be able to read and interpret
your work.
If your spreadsheet looks like a rainbow elf or a unicorn, or a

senior banker can’t understand the output at a glance, you’ll be
in trouble.
Not everything in this guide is “essential” – you can always add more bells and whistles to make
spreadsheets look better, but they are still just bells and whistles.
Get the formulas and calculations right, make the spreadsheet look reasonably good and legible, and
don’t obsess too much over decimal places, exact border colors, etc.
Table of Contents
EXCEL – FORMATTING FOR FINANCIAL MODELS AND DATA ANALYSES 1
Formatting in Financial Models 2

Disable Gridlines 2
Color-Coding: Black, Blue, and Green Fonts, and Input Boxes 3
Headers, Sub-Headers, Units, and Grouping 4
Summary Pages, Cover Pages, and Spreadsheet Names and Tab Colors 5
Named Cells and Ranges and Comments 7
Numbers, Percentages, Dates, and Valuation Multiples 9
Text, Alignment, Indentation, and Styling 11
Balance Check Formatting 12
Charts & Graphs 13
Print and PDF Formatting 14
Formatting in Data Analyses 16
1 of 17 https://breakingintowallstreet.com
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Formatting in Financial Models
Throughout this guide, we’ll be referring to the “Summary” and “WMT_Model” spreadsheets in the
finished version of the Walmart operating model and valuation.
Therefore, you should look at the finished Walmart model to understand all the screenshots below.
Disable Gridlines
Before you do anything else, disable gridlines to improve readability. In PC/Windows Excel, use Alt, W,
VG to do this; in Mac Excel, go to the “View” menu in the ribbon and uncheck “Gridlines.”
Take a look at this difference in readability:
With Gridlines:
Without Gridlines:
Even if you want to keep gridlines enabled, you should always turn them off when you print a file.
Return to Top.
Color-Coding: Black, Blue, and Green Fonts, and Input Boxes
You should always color-code your financial models so that you can distinguish constants, formulas,
and links to other spreadsheets.
Here’s the normal color-coding scheme:
We use a yellow background and grey border for “input cells” that are assumptions or drivers in the
model, while we use a white background with no borders for historical financial data:
Yes, you can automate most of this process. Take a look at our VBA lessons on the Input Box macro
and the color-coding macro for the full details.
There are also a few other cell categories, which you can see below:
Type of Cell Example Cell Content Font Color

Hard-coded number (input
=318477 Blue
or historical data)
Formula or function =I26*AVERAGE(H25,I25) Black
Direct link to another sheet
=WMT_Model!I150 Green
in the same file
Direct link to a different file
=[Useful_Presentations.xlsx]Sheet1!$K$3 Red
(i.e., a different workbook)
Formula or function from a
data provider (Capital IQ, =CIQ(IQ_EBITDA) Dark Red
FactSet, etc.)
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Headers, Sub-Headers, Units, and Grouping
Some important points here include:
Also, note how each header or sub-header starts one column to

the left of the text labels – this lets us use the Ctrl + Arrow Keys to
jump between schedules more easily.
Some people like to use “x” in column A or B next to each

schedule name, but it’s more elegant to skip the extra character
and do this with the header and sub-header positions.
Return to Top.
Summary Pages, Cover Pages, and Spreadsheet Names and Tab Colors
Any financial model with several spreadsheets, or one with a single spreadsheet that exceeds ~200
rows, should include a summary area or page that highlights the key trends:
The contents of this summary page depend on the type of model: a merger model for an M&A deal will
show much different information than a 3-statement operating model for a single company.
For an operating model, focus on the company’s top line (Revenue) and bottom line (Net Income and
other profitability stats), the company’s main 2-3 drivers, and key sections of the financial statements.
If your model has several different spreadsheets in it – more than, say, 5-6 – then it’s also worthwhile
to create a Table of Contents page for the first sheet in the file:
It’s not required to use different colors for the spreadsheet tabs, but it helps with navigation and
model changes in larger files:
With spreadsheet names, avoid special characters such as blank spaces, the dash (“–“), semicolons,
colons, double quotes, single quotes, and so on. These types of characters will cause problems in
formulas.
Stick to letters, numbers, and the underscore character (“_”) to separate words.
Return to Top.
Named Cells and Ranges and Comments
Naming cells and ranges (Ctrl + F3 on the PC or Ctrl + L on the Mac) helps organize your models and
make formulas easier to understand.
However, you can’t go overboard with named cells and ranges.
Use them for text and numbers that you’ll be referring to throughout the entire model, such as:
• Company Name
• Current Share Price
• Range of Data for the Comparable Companies
• Tax Rate
• Current Scenario
• Key Inputs, such as the Weighted Average Cost of Capital (WACC) or Cost of Equity in a DCF
Do NOT name cells such as:
• Revenue in Year 1, Year 2, Year 3, Year 4, etc.

• Gross Profit, Operating Income, EBITDA, etc., in specific years
• The names of all the companies in a set of comparable public companies
• Each quarter of the company’s fiscal year
Here’s a screenshot that explains good and bad use cases for named cells:
With comments (Shift + F2 or Alt, R, C in PC Office 365), use them where they make sense – but don’t
go overboard and comment all 500 assumptions in your model.
Comments are best used to explain something that is not immediately obvious, such as a complex or
hard-to-read formula, or an unusual source of data:
Leaving too many comments will make your spreadsheet hard to read, especially since senior bankers
sometimes don’t know how to turn off comment indicators (Options → Advanced → Display).
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Numbers, Percentages, Dates, and Valuation Multiples
When you work with numbers that represent currencies – U.S. dollars, euros, British pounds, Chinese
RMB, Japanese yen, etc. – you should display the currency sign only in the top row and bottom row of
the schedule.
In some cases, you might vary this a bit and display the currency sign in the top row of each section
and then again in the bottom row of each section. An example is the Balance Sheet, where we usually
do this for the Assets side and the Liabilities & Equity side.
We prefer to use the Accounting number format to ensure proper alignment for all currencies.
For larger companies (revenue in the billions), we display no decimal places except for the share price
and per-share amounts, such as earnings per share (EPS).
For smaller companies (revenue under $1 billion), we usually show one decimal place.
For the sign convention, we prefer to show all income sources and cash inflows as positives, ideally
with a (+) sign in front of the text label, and all expenses and cash outflows as negatives with a (–) sign
in front of the text label.
We always use parentheses for negatives because they’re much easier to read that way.
For percentages, we use this Custom Number Format:
_(0.0%_);(0.0%);_("–"_)_%;_(@_)_%
This one ensures proper alignment with any percentages above or below it by adding extra spaces to
positive percentages, 0, and text.
These spaces are the same size as the parentheses around negative percentages, which ensures
alignment.
Finally, we usually format dates as “FY” (i.e., Fiscal Year) followed by a two-digit number to reduce
clutter. In input boxes and assumptions, we use the international date format (YYYY-MM-DD).
Here’s Walmart’s Income Statement with these standards reflected:
For valuation multiples, such as the P / E or Price-to-Earnings Multiple, we prefer to use a Custom
Number Format such as:
0.0 x;[Red] (0.0 x)
This will make a positive, such as 6.7 x, appear normal, and it will make a negative, such as (4.3 x),
appear in red with parentheses around it. A set of valuation multiples might look like this:
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Text, Alignment, Indentation, and Styling
We use the black font color for almost all text, regardless of whether it’s entered directly in the cell or
linked to a formula or another sheet, because it’s extremely difficult to read blue or green text.
The main exception is that if the text is in an input box, such as the company name or ticker, we use
the blue font color to clarify that it’s required user input.
A 12-point font size in Arial, Calibri, Helvetica, or a similar font face is fine.
You can use a bigger font size, such as 14-point, for the title of each spreadsheet.
In financial models, you should keep most text set to the “General” horizontal alignment, which
effectively left-aligns it.
You can indent any rows that show supporting calculations, such as revenue growth or gross margins,
as well as line items that are parts of other categories, such as the components of revenue.
You can center-align the “input box” cells and use “Center Across Selection” for section headers.
Do NOT use the “Merge Cells” feature, as that can lead to misaligned spreadsheets and incorrect
formulas being copied down.
Most text in your model should be normal rather than bold or italicized, but you can use bold text for:
• Section and schedule titles, headers, and sub-headers.

• Category and sub-category titles and sub-total rows.
• Dates in headers and sub-headers.
You use italics mainly for percentages that are there for informational purposes – not as drivers or
assumptions.
Here’s the Walmart Income Statement using the standards above:
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Balance Check Formatting
One key accounting relationship is that on a company’s Balance Sheet, Assets must always equal
Liabilities + Equity.
Assets are items that might produce some future income or benefit, such as a company’s investments,
cash, and factories, while Liabilities and Equity represent funding sources or owed amounts to realize
those future benefits.
In financial models, you must include a check in the Balance Sheet projections to make sure that this
equality (A = L + E) holds.
We prefer to format it in the following way:
This will display “OK” if Assets minus Liabilities & Equity = 0; if it’s not 0, it will display the positive or
negative number to three forced decimal places.
Return to Top.
Charts & Graphs
We cover charts and graphs in the separate Charts & Graphs quick reference guide, but a well-
formatted graph might look like this:
We use solid black borders for the left and bottom edges of the chart area so that they’re clearly
visible, especially when pasted into Word or PowerPoint.
Return to Top.
Print and PDF Formatting
When you print a spreadsheet or an entire model, you should keep in mind a few points:
1) You should use a black font color for everything that appears on a white or yellow background
– remove the blue and green fonts for hard-coded data and direct links to other sheets.
2) Always hide the gridlines (View, Gridlines) and comment indicators (Options → Advanced →
Display) because they will clutter up the printouts.
3) Separate the pages intelligently by inserting Page Breaks in the right spots (Page Layout,
Breaks, Insert Page Break). Each page should, ideally, contain one schedule or financial
statement (e.g., one page for the Income Statement, one for the Balance Sheet, and one for the
Cash Flow Statement).
4) Headers, footers, and page numbers can be useful (Page Layout, Page Setup), but are not
required if the printout is short and self-explanatory.
5) You can repeat rows and columns, especially if you’re printing a sheet with a lot of supporting
data or calculations, but this feature is not super-useful for traditional financial models.
Here’s a quick example:
We’ve also changed all the text and numbers on white backgrounds to black for readability.
Yes, you can automate this process with our Print Format Macro.
Return to Top.
Formatting in Data Analyses
Proper formatting is less important when you’re analyzing data because it doesn’t have to “look
pretty”; the end user often knows Excel quite well.
For data analysis, the most powerful formatting feature is the built-in Data Table (Home → Format as
Table, or Ctrl + T on both PC and Mac):
If you pick an appropriate theme from this window, most of the work will be done for you.
If you want to go beyond that, you can choose the appropriate number formats for all the fields in the
table and make sure all the graphs, charts, and pivot tables are formatted correctly.
But there isn’t much to say because all the tips above apply equally to data analysis; most of it comes
down to using the right number formats and tweaking the graphs and charts a bit.
Return to Top.

Excel Formatting Best Practices

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Excellence with Excel 3.

Excel – Formatting for Financial Models and Data Analyses

This quick reference guide explains formatting best practices

Proper formatting is important because senior staff members,

If your spreadsheet looks like a rainbow elf or a unicorn, or a

EXCEL – FORMATTING FOR FINANCIAL MODELS AND DATA ANALYSES 1

Formatting in Financial Models 2

Formatting in Data Analyses 16

Formatting in Financial Models

Take a look at this difference in readability:

Color-Coding: Black, Blue, and Green Fonts, and Input Boxes

Here’s the normal color-coding scheme:

Type of Cell Example Cell Content Font Color

Headers, Sub-Headers, Units, and Grouping

Some important points here include:

Also, note how each header or sub-header starts one column to

Some people like to use “x” in column A or B next to each

Named Cells and Ranges and Comments

However, you can’t go overboard with named cells and ranges.

Do NOT name cells such as:

• Revenue in Year 1, Year 2, Year 3, Year 4, etc.

Numbers, Percentages, Dates, and Valuation Multiples

For percentages, we use this Custom Number Format:

Here’s Walmart’s Income Statement with these standards reflected:

0.0 x;[Red] (0.0 x)

Text, Alignment, Indentation, and Styling

• Section and schedule titles, headers, and sub-headers.

Here’s the Walmart Income Statement using the standards above:

Balance Check Formatting

We prefer to format it in the following way:

Charts & Graphs

Print and PDF Formatting

Here’s a quick example:

Formatting in Data Analyses

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