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CRaFT - Robustness
Understand ‘Robustness’ in the CRaFT methodology.
When to use
A key concept in financial modeling, ‘Robustness’ can help model developers build models that are materially free from error, mathematically accurate and readily auditable.
- Models must be materially free from error, mathematically accurate and readily auditable
- Develop / review spreadsheets under a philosophy of keeping things simple, consistent and transparent
- Hence, models should provide strong, inherent levels of structural, logical and formula sturdiness
- Ideally, well-built models should contain:
- no hidden macros
- in-built error, sensitivity and alert checks
- audited, established formulae
- Various checks should be explicit in the model
- e.g. Balance Sheet and Cashflow Error Checks
- Identification of omissions / double counting
- Identification of incorrect accounting entries
- Time saving – link error check through to every sheet
Ensure all prima facie errors are cleared from the model before saving.
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