3 Reasons Why A Cruise Ship Is Similar To A Financial Model

Last week my family and I went on a cruise vacation.

It was a 7-day round trip that took us to several Mediterranean cities. We visited Genoa, Naples, Messina, Malta, Barcelona, and Marseille, all while aboard a large and brand-new ship.

I must confess that, aside from the extra weight I have gained after a week of non-stop eating and drinking, I enjoyed the experience.

From the moment I stepped aboard, I couldn't help but compare the ship to a solid financial model.

I found 3 key similarities:

1. Both cruises and solid financial models are intricate systems, yet they are simple to navigate.

Upon my arrival at the port in Genoa, I was amazed by the size of the ship. However, as soon as I boarded, I observed that everything was well structured and organized. Clear instructions and directions were provided everywhere. I didn't lose my way and was able to orient myself on the ship in no time.

This is similar to solid financial models. Initially, you may be overwhelmed by their apparent complexity, but they follow a clear structure and are well-organized. You never feel lost and can quickly learn how to navigate them.

2. Both cruises and solid financial models sail towards predetermined destinations.

When you start a cruise vacation, you know the ports the ship will visit. There is no room for improvisation. The captain's role is to safely and promptly navigate the waters and reach the planned destinations.

The same holds true for financial models. They are built with a clear goal in mind and don't deviate from it. Whether it's to calculate the acquisition price of a M&A deal, the electricity tariff to bid in an auction, or the maximum debt a project can sustain - there is a single predefined objective that the model is designed to accomplish.

3. Both cruises and solid financial models offer flexibility.

When on a cruise, you have the freedom to plan your day as you wish. Whether you want to dive into the swimming pool, enjoy a show in the theater, or grab a drink at the pub, the options are limitless.

Financial models also have this attribute. They are designed to be flexible, providing room for adding calculation blocks, modifying parameters, or incorporating sensitivity analysis, all within the model's framework, without causing system crashes or miscalculations.

I'm sure there are more similarities between cruises and financial models. However, being on vacation mode, I just could spot the most evident ones.

Hey, I am aware that not everyone thinks about financial modelling while on holidays.

If you find financial modelling as fun as rowing in a boat in bad weather, I have good news for you.

I can be the captain of your financial model.

You tell me the destination port, and I'll sail to it while you chill out in the swimming pool.

Financial modelling services.

P.S. The cruise ship we went on for our holidays was the MSC World Europa. It's an impressive animal!

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