Numbers Do Not Speak For Themselves

Communicating your financial analysis effectively

"I just looked at your spreadsheet. We are going to approve your development!!"

(quote said by nobody ever) 

I have spent most of my career building and evaluating spreadsheet financial models (proformas) for dozens of developers, lenders, and institutions.  I have worked on financial models from sophisticated to 'shoe box' simple.  It is tempting to feel that once the financial model works, all you have to do is summarize and sendoff as the numbers will speak for themselves.  Only later do you find out nobody is convinced of your analysis.  

To bring your project to life you need to communicate your financial analysis effectively.  Some people email their full spreadsheet attachment, with accompanying notes providing some highlights.  The best way to communicate your findings should be a presentation format of your analysis and only provide a full spreadsheet as backup reference.  This removes too much focus on the spreadsheet calculation and places emphasis on your rationale and assumptions.  

Here are three keys to better communicating your financial analysis effectively:

1) Provide project scope:  Be explicit about the goal & results of the financial analysis upfront.  Focus on what has been considered and what has been intentionally included or excluded.

2) Support assumptions:  The body of your communications should focus on facts and stories that support the assumptions of your financial analysis.

3) Highlight takeaways:  Do not wait for others to try and guess what your analysis is demonstrating or find for patterns.  In the crowd of data and charts, identify key takeaways that you feel are most relevant.   

Andrew Garrett