Despite the availability of numerous platforms specifically designed for financial calculations, Excel still presents the best option for creating models to support most businesses. This conclusion reflects a number of realities:
- A wide range of employees can understand and use Excel-based financial models. Even in cases where the model has a relatively high degree of structural and computational sophistication, basic navigation and input/output operations are often familiar to all Excel users.
- Businesses incur no additional capital costs by using Excel, a standard part of the Microsoft productivity suite.
- Use of purpose-built modeling applications can significantly increase operating costs. Specialized programs often require extensive training, which can lead to higher employee turnover due to frustration or talent poaching by other businesses using the same purpose-built application.
- The flexibility of Excel gives users an easy route to modifying models. Additionally, Microsoft continues to actively support the application, frequently adding new and valuable functionality.
While purpose-built programs may provide the best option for certain organizations, such as large corporations with multinational operations, the vast majority of businesses will find that properly built Excel models will meet or exceed their needs while simultaneously minimizing their costs.