I often find myself having a hard time explaining what a financial model is because to me, it could be almost anything.
That said, I'll set aside the financial part today and show you a very simple Excel model, useful for those of us who have kids in elementary school. It's my personal version of the random cards you might have at home to help the kids learn their alphabet or addition tables.
How to Model Depreciation
Completing the OFFSET series, let’s see a real-life example on how to use the OFFSET function to model depreciation.
Basically, the depreciation model needs the following inputs:
With those inputs we’ll be able to calculate: