Example (the model used in this course)
A small bakery is thinking about a new product line for three years. Inputs sheet:
| Input | Name | Value | Unit |
|---|
| Units sold in year 1 | Units_Y1 | 12,000 | units |
| Growth per year | Growth | 10% | % |
| Price | Price | 4.50 | your currency per unit |
| Unit cost | Unit_Cost | 1.80 | your currency per unit |
| Fixed costs per year | Fixed_Costs | 18,000 | your currency |
Calc sheet:
| Row | Year 1 | Year 2 | Year 3 |
|---|
| Units (year 1 = Units_Y1, then previous year x (1 + Growth)) | 12,000 | 13,200 | 14,520 |
| Revenue = Units x Price | 54,000 | 59,400 | 65,340 |
| Variable cost = Units x Unit_Cost | 21,600 | 23,760 | 26,136 |
| Gross margin = Revenue - Variable cost | 32,400 | 35,640 | 39,204 |
| Fixed costs | 18,000 | 18,000 | 18,000 |
| Profit = Gross margin - Fixed costs | 14,400 | 17,640 | 21,204 |
Three-year profit: 53,244.
Try it now
Pick a decision you or your team faces (a price change, a new product, hiring one more person). Write the five-sheet plan on paper: list every input with its unit and where the number comes from, and the three results the reader needs.
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I'm learning "Excel Modelling: audited models and teaching others" on The Future Market. Lesson 1: "What an expert model looks like".
What the lesson teaches:
- Before this course: Excel Automation (course 7.1.3). You already plan workbooks in layers. A model adds one more idea: someone will make a decision with your numbers, so the model must be easy to check.
- Plan a model in five parts. Each sheet has one job:
- Sheet - Job - Rule
- Read me - Purpose, owner, how to use it, change log - Written for a newcomer
- Inputs - Every number you might want to change, with units and a source - The only place people type numbers
- Calc - The working - Formulas only, no typed numbers
- Outputs - Results for the reader: tables and charts - Formulas only, links to Calc
The exercise I'm working on:
Pick a decision you or your team faces (a price change, a new product, hiring one more person). Write the five-sheet plan on paper: list every input with its unit and where the number comes from, and the three results the reader needs.
I'm stuck. Please:
1. Explain the main idea in plain, simple words with one everyday example.
2. Walk me through the exercise one small step at a time. Ask me what I've done so far before giving the next step.
3. Don't just give me the final answer. Help me do it myself, and check my work when I share it.
I'm a parent helping my child (about 8 years old) with a lesson called "What an expert model looks like" from the course "Excel Modelling: audited models and teaching others".
Here's what the lesson says:
Think of a bakery. Ingredients go on one shelf, the mixing happens on the table, and the cakes go in the shop window. Nobody mixes dough in the shop window. A good model works the same way: inputs on one sheet, the working on another, results on a third, and a checker who tastes everything before it goes out.
The activity:
Pick a decision you or your team faces (a price change, a new product, hiring one more person). Write the five-sheet plan on paper: list every input with its unit and where the number comes from, and the three results the reader needs.
Please explain this so an 8-year-old understands: short sentences, a fun everyday example, and no hard words.
Then give me 3 simple questions I can ask my child to check they understood, and a way to do the activity together, one tiny step at a time.