Convert from Monthly to Monthly, Historical & Forecast

time seriesperiodicitiestime frames
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Scott Robson 1 A+ 1
SR
Convert from Monthly to Monthly, Historical & Forecast

Good afternoon,

I am relatively new to Modano, working through the training and testing the knowledge learned to produce models for my organisation. I have created a Monthly forecast for the business, but now want to incorporate historic data - is there a way to convert from Monthly to Monthly, Historical & Forecast? Or do i need to start again and recreate my monthly forecast using the MHF dynamic template?

Thanks in advance!

Michael Hutchens A+ 189

Hi Scott,

Before addressing your specific question I’ll preface my comments by noting that there’s no right or wrong way of doing anything when using Modano, so while the modules we’ve uploaded to libraries on our website might do things a certain way it doesn’t mean you’re not welcome to customise these modules or create your own if you’d like to achieve a different outcome.

Having said that, the time series modules in the libraries on the Modano website are really designed to each be used for a specific periodicity and time frame(s) combination. You can learn more about the time series modules in the Generic Financial Model libraries by clicking here.

This means that when using these modules (or the libraries that include them) you need to decide when scoping your model what the primary periodicity of your model will be (e.g. monthly, quarterly, semi-annual, annual, etc.) and whether or not it will be time frame agnostic or include historical and forecast time frames. Because none of the modules we’ve developed automatically support changing periodicities or adding time frames (such as historical data) after the fact.

If you have built a model without including historical data, and you haven’t yet made any customizations to the modules in it other than entering assumptions, adding categories and extending the time series, then it’s very easy to build a new model from scratch by selecting the corresponding dynamic template including historical and forecast time frames, then aligning categories and time series forecast duration before copying across your assumptions.

If you’ve made significant customizations to formulas and other non-automated content within your monthly time frame-agnostic model and want to include historical data, you will need to try to manually replicate these customizations in your new model - i.e. you’re back in the normal world of Excel where you need to do the hard yards yourself!

To add some context to this discussion, we originally stated building our module libraries trying to make our modules able to handle multiple periodicities and time frames, which would have allowed model users to change these characteristics of the model by changing assumptions, but it became a real mess with mega formulas being required for more complex modules (such as assets and corporate taxation). We also realized after building them that assumptions are usually entered in line with the periodicity or the model, so even if the formulas could handle a change of periodicity the assumptions often required reinstating anyway.

Hence we introduced our current policy, which is that modules should be developed for a specific time series infrastructure rather than trying to create one-size-fits-all modules.

In any case, you should never we worse off than you would have been had you not used Modano, if this makes sense.

In summary, model scoping is absolutely key when using Modano, and choosing the right time series infrastructure for your model requirements is the foundation of this scoping.

M.