LOG OF CHANGES IN A FINANCIAL

MODEL
Introduction
Imagine this scenario, finally you have a financial model that
you are happy with and is working, using it to do the analysis
and projections that you and your team need. You are now
starting to make changes to the inputs as new data come in,
the tax structure starts to be optimised.so how do you keep
track of all the changes?
A common approach is to save a different version and label it
like ABC Project (50% Gearing) 20100210.xls and another file
ABC Project (80% Gearing) 20100211.xls to tell the two
versions apart. This was still manageable until the filenames
need to be more descriptive to distinguish the different
nuances of each version.
In this tutorial we will cover the following
1. What is a change log and what does it do?
2. How does a dynamic log of changes work?
3. Step by step instruction to download the sample file
What is a log of changes?
A log worksheet at its simplest updates manually to track who
made the changes, when and what the impact on the key output
was. But the shortfall with this approach is if the user doesnt
choose to update the log then the changes go unnoticed.
What does it do?
A functional log of changes should update automatically. In the
attached model, whenever a change is made that impact key
output such as the IRR, LLCR, NPV etc, Excel automatically
prompts the user to update the Log worksheet. This removes the
need for the user to manually track the changes.
At Navigator the log of changes prompts the workbook to record
the following information when key outputs change
Filename, date saved, and author of the latest update
Key outputs / ratios (row 7: Column G to K)
Nature of Change made.
If there is a change in the key outputs of the model, it prompts the
user to enter a one line comment describing the change he/she
made. In Screenshot 1 you can see that if the user doesnt
annotate the change made then Change Undocumented is
recorded against the user name along with the date and time.

Screenshot 1: Log of Changes

Note that column D records the filenames of the previous versions.
This is a useful feature allowing the user to cross reference
against older files as the model go through various iterations in its
development.
How does it work?
Whenever you see a button in an Excel spreadsheet, and in
Screenshot 1 it is called Update (column D), it means there is a
macro behind it. Each time you press Update it copies the
information relating to the current version (row 7) and paste it to the
bottom of the log. It also pastes the values in row 7 into row 8 that is
used to calculate Last Total, range name given to cell L8.
Cell L7, which is below Check Delta is a key cell, is given a range
name of Current Total, it sums up all the key outputs from column
G to column k. Through this cell the macro detects a change in the
key outputs. If there is a change to the Last Total cell L8, a
message box as shown in Screenshot 2 appears when you save the
model.

Screenshot 2: Message Box

Quite often the key outputs we track in our project finance models
are debt ratios like DSCR and LLCR, so when there is no debt, Excel
will naturally return #DIV/0!. Current Total and Last Total needs to
be a number, so we should prevent the underlying values of the key
outputs returning #N/A, #DIV/0 or #VALUE. To get around this we
use the formula in Screenshot 3.




Screenshot 3: ISERROR formula
Downloading the sample file
You are welcome to download the log change functionality from
attached file Change Log Sample File.xls. To do this please follow
the steps below:
1. Open your own model in the same Excel application
2. Move / Copy Sheet the Log Tab to your workbook


Screenshot 4: Copying Log Sheet to new workbook


IF(ISERROR(Calculation!E53),0,Calculation!E53)

About Navigator Project Finance
Founded in 2004, Navigator Project Finance Pty Ltd (Navigator) is the project finance specialist. Headquartered in Sydney, Australia, Navigator
is raising the global benchmark in financial modelling services to the project finance sector. At any stage in your projects lifecycle, our project
advisory team can inject world class expertise into your team; strengthening both the project and team structure. Navigator designs and
constructs financial models for complex project financings, offers training courses throughout the Middle East, Asia, the US and Europe.
Navigator delivers fast, flexible and rigorously-tested project finance services that provide unparalleled transparency and ease of use.
Navigator Project Finance Pty Ltd P +61 2 9229 7400 enquiry@navigatorPF.com
www.navigatorPF.com
Make sure you make a copy of the worksheet to the destination
workbook Book 2.
3. Check and remove all non blank cells for external links to the
original workbook
4. Re-link the key outputs in cells G7 to K7 to cells in the new
workbook. Please update the table headings where
appropriate.
5. Open up VBA by holding down ALT and F11
6. Select VBAProject for the destination workbook Book2
(Screenshot 5)


Screenshot 5: Project Window for Book2

7. Right mouse click, select insert Module (Screenshot 6)


Screenshot 6: Insert a blank module

8. Rename the module to Log (Screenshot 7)


Screenshot 7: Rename module to Log

9. In the Projects Window, select Log Module of the original
file (Screenshot 8)


Screenshot 8: Select Log module of original file






10. Fully copy the code displayed on the right (Screenshot 9)

Screenshot 9: Code for Log Module

11. Select the newly inserted Log module in the destination
workbook (Screenshot 10)


Screenshot 10: Select Log module in destination workbook

12. Paste the VBA codes into the blank module
13. Select This Workbook in the Projects Window of the original
file (Screenshot 8)
14. Copy the code and paste it into This Workbook of your new
file
15. Exit VBA window by clicking on the top right corner
Final Words
A great financial model should be one that allows people to make
changes and automatically track those changes when key outputs
are impacted.
In this tutorial we have demonstrated our best practice approach to
putting this Log of Changes together through the use of VBA.
To better understand the VBA environment and our best practice
approach in applying macros in financial modeling check out our
VBA for Cashflow Models Course.
To find out more about our best practice methodology to financial
modeling visit our other tutorials or check out our popular PFM (A)
course.