The Truth About Project Finance for Modelers to Avoid Complexity & Build Impact with Patrick Daguet

Written By Paul Barnhurst

In this episode of Financial Modeler's Corner, host Paul Barnhurst sits down with Patrick Daguet, a seasoned finance professional, educator, and structured finance expert for a thoughtful and inspiring conversation about the real-world side of financial modeling. With over four decades in the industry, Patrick shares what he's learned from years of building models, working on massive infrastructure deals, and teaching the next generation of finance professionals. From navigating the challenges of project finance to celebrating those satisfying “balance sheet balances” moments in the classroom, Patrick offers a grounded, practical perspective on how modeling works beyond the spreadsheet.

Patrick is the President of Sharklets, a training company specializing in CFA, FRM, and CAIA prep, and a Senior Professor at IÉSEG School of Management. With a background in structured finance, infrastructure projects, and model design, he bridges academic rigor with practical experience. He has helped train thousands of finance professionals across the globe and continues to lead CFM study groups. Patrick’s love for teaching is matched by his real-world expertise, having worked on major infrastructure deals, including France’s national stadium.


Expect to Learn

  • Why financial models should be treated as decision-making tools, not just math.

  • What makes project finance models more complex than corporate ones.

  • The real-world impact of financial models, from runways to stadiums.

  • How teaching has shaped Patrick’s understanding of modeling.

  • Why lifelong curiosity is the key to staying relevant in finance.


Here are a few quotes from the episode:

  • “A financial model is a decision tool that incorporates all the information necessary to form your own judgment." - Patrick Daguet

  • "I fell into teaching when people told me I had a talent for explaining the complex clearly." - Patrick Daguet

  • "You are sentenced to lifelong learning when you choose a career in finance." - Patrick Daguet


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In today’s episode:

[01:59] - Guest Intro: Patrick’s Background

[03:34] - Modeling Horror Story

[07:28] - Defining a Financial Model

[08:46] - Lifelong Learning & Certifications

[11:58] - Passion for Project Finance

[14:39] - Favorite Project: Stade de France

[17:58] - Challenges in Project Finance Models
[24:59] - Transition to Teaching
[31:30] - CFM Study Groups & Community
[37:20] - Excel Tools & Rapid Fire Round
[45:12] - Closing Advice & Takeaways



Full Show Transcript

[00:01:06] Host: Paul Barnhurst: Welcome to Financial Modeler’s Corner. I am your host, Paul Barnhurst. This is a podcast where we talk all about the art and science of financial modeling with distinguished financial modelers from around the globe. The Financial Modelers Corner podcast is brought to you by the Financial Modeling Institute. FMI offers the most respected accreditations in financial modeling, and that's why I completed the Advanced Financial Modeler. And I'm sitting for the Chartered Financial Modeler. This week I'm thrilled to welcome our guest to the show. Patrick, welcome to the show.


[00:01:46] Guest: Patrick Daguet: Thank you very much, Paul. I'm very honored to be part of the show. Thank you.


[00:01:51] Host: Paul Barnhurst: Well, you know, really excited to have you. It's a real pleasure. I know we've connected on LinkedIn a few times and, you know, pleasure to have you here today. So let me start by just reading a little bit about your background, and then we'll jump into our questions here. So Patrick today is a CFA and an AFM. He has been teaching finance since 2013. He is the academic director of an executive program dedicated to financial management. He also intervenes regularly in the postgraduate program in finance where he teaches advanced modeling. One of his areas of expertise, he has designed several online games for the school around his area of expertise structured finance, CDO games, securitization and project infrastructure finance, a sector where he spent 15 years of his career and something he's really passionate about. We'll talk more about that later. He also helps host sessions designed to prepare people for the Charter Financial Modeler through the Financial Modeling Institute. Today, he shares his professional life between teaching coaching professionals, prepare for finance designations and doing some consulting in the infrastructure finance space through a company he founded in 2010. So he has a great background. He's also a CFA holder. He has CAIA, his FRM and his AFM, so he has all his acronyms after his name. So we always like to start every episode with this question. I know you have a horror story. You've done years of modeling, right? You've been in this for four years. Yeah. What's the worst model you've worked with? What's your horror story when it comes to modeling?


[00:03:40] Guest: Patrick Daguet: Well, I mean. To be honest with you, I've been in the industry for 43 years. As you can guess, I have been watching. I've been doing and reviewing a lot of financial model B, they're very simple or very complex. But I think the most surprising and horror story I have to tell is the one I try to experience last week, as late as last week. I mean, that's actually something which happened to me last week. I was delivering a workshop in parts of Africa, and I was doing it for a state owned company, representative of whom were there. They were there to prepare for the event. So I was delivering a knife and training for them. And in the course of the workshop, one of the participants, during a break, showed me and discussed the corporate finance model, the corporate finance model they built for the corporate, and he showed it to me. This model was highly complex, highly confused. There were 35 worksheets in it. 35. And he explained, this corporate finance model was basically fitted by several departments of this company. So what he was doing, he was centralizing and gathering all the information from various departments. And this information was constituting increasingly the base for the model.


[00:05:09] Guest: Patrick Daguet: And it was a corporate finance model. But because the company is involving utility and its function is about utility in the electricity sector, is also reviewing a lot of project finance models and is reviewing project finance companies. So independent electricity producers with a view of purchasing or taking a stake in those companies and building a portfolio of independent power producers. And so that's actually where the model became extremely complex and horrendous in a way, because each industry company, each project finance company, they were showing their own mothers with their own standards, and who was in charge of reviewing auditing this model and then integrating all the financial parameters in its corporate finance model. So, you know, this corporate finance model became a mama's. And I, I have actually looked at some formulas which were I mean, no kidding, five lines long. And I say, do you think we can do something a little bit more simple than that? And he said, yes. After the teaching and the, after the, uh, the learning we had with you, probably we would have to think back about the way we hide those, uh, very complex formulas. Yes. So it's another story. I would say that. Yes.


[00:06:40] Host: Paul Barnhurst: Yeah. That sounds like a nightmare. I mean, we have when you're feeding lots of different models into one model, you got 35 tabs, long formulas, Workbook links. You're just asking for stuff to be wrong. Exactly. I get things have to be complex, and we all have to learn how to simplify it and how to build a model like that. And like you said, after the training, he realized, oh, I can do better. But still, sometimes you see those and you just think, I wonder how big the mistakes are.


[00:07:14] Guest: Patrick Daguet: Exactly. That's exactly that.


[00:07:17] Host: Paul Barnhurst: The second question is a fairly recent one. We started asking guests, and it was at the request of a listener. And I love to kind of see how people define it differently. If I was to ask you, how would you define a financial model, like what do you think qualifies? How would you answer that?


[00:07:37] Guest: Patrick Daguet: That's a tough one, because, I mean, there are potentially several definitions of it depending on the angle of attack you take. On my side, I think the way I see it is for me, it's a decision. First of all, it's a decision tool. It should be. And it is actually built with the aim of becoming a decision tool. So for me, a financial model is a decision tool that incorporates all the information necessary to form your own judgment and to make your decision. For me, that's, um, that's how I would define it. I possibly have other definitions, but that's probably the ones that would fit better into my mind at the moment.


[00:08:21] Host: Paul Barnhurst: Makes a lot of sense. It's basically a model that incorporates those financial variables and is used to drive decision making. I can get behind that. Does it make sense? Yeah. Do you know that you have a real passion for learning? And I know you know, this last year you completed the AFM. You've done several other programs throughout your career. What motivates you to invest so much time and kind of constantly learning and earning these different certifications and programs. Well.


[00:08:55] Guest: Patrick Daguet: I mean, that's probably, uh, that's a question I asked myself a few times during my life because, yeah, when I started my finance career, I was starting my finance in banking. And I remember in my early days someone telling me at that time I didn't really understand the point, but I, I failed to realize and I felt how important what he said to me was. And this person told me, you know, if you enroll into finance and banking, you are more or less, uh, condemned to your sentence to, uh, life learning. And I said, oh, really? Yeah. You will never stop learning. You will. You will need to constantly learn and learn if you want to keep yourself up to speed. And I think that's today, I mean, after reflecting on this choice and passion. But curiosity is the engine, uh, which first pushes me to continue, uh, learning and to try to be, uh, sort of on top of things, you know. Uh, when it comes to financial modeling, for example, uh, it was clear that, uh, I had, uh, even even though I had a lot of practice behind me, I realized that I needed some structure, I needed some methodology, I needed some approaches and discipline which I might have acquired in my in my practice. That's actually what pushed me and turned me to the FMI, uh, to prepare for the IFM. And now, as you are preparing the CFM, it's curiosity and enthusiasm about, uh, learning more and being on top and to do without making play with the words to excel in in financial modeling.


[00:10:41] Host: Paul Barnhurst: No pun intended. Right? Nope.


[00:10:44] Guest: Patrick Daguet: No pun intended.


[00:10:46] Host: Paul Barnhurst: Yeah, I've used that one before as well. But yeah, I mean, I think you made a great point that people who go into modeling and these professions, you're going to be constantly learning. Right. The models we built 30 years ago, it's different formulas, sometimes different structures. I mean, there's so much that's changed in the sense that 30, 40 years ago was the early days of computers and spreadsheets. We were just barely figuring out how to model. You know, now you have some people building models in Python using all kinds of different tools, you know, pulling your data with Power Query. I mean, yes, there's still a lot of things that have stayed the same, and there's still the basics of, hey, you do it in a spreadsheet and you do it by column, but so much, so much more is available. And if you're not learning, you're often missing things that might help you be more efficient and effective.


[00:11:39] Guest: Patrick Daguet: Exactly. That's exactly the technical thing. That's what I, what really pushed me to continue. I mean, I see it as if it's normal. It's not something which I impose on myself, you know? That's completely normal.


[00:11:55] Host: Paul Barnhurst: Yeah. No, I, I.


[00:11:57] Host: Paul Barnhurst: Like that and, you know, I know as we talked, one of the areas you love to work in that, you know, kind of get motivated by is you're a big project finance fan. So how did you kind of get interested in project finance? what do you love about that so much?


[00:12:11] Guest: Patrick Daguet: I fell into, uh, infrastructure finance slash project finance 23 years ago. Uh, something like this, starting with ports and airports. And then I switch to roads and a lot of transportation deals. And I moved to sewage, sewage and water and solid waste treatment and also just a couple of stadiums here. And what really pushed me to this and what I like in this is the fact that in finance, uh, especially if it goes into complexity and, And they are not wrong, by the way. People often think it's too abstract. You know, they do formulas. They do Excel spreadsheets. But at the end of the day, they don't see exactly a tangible, uh, translation of what they contributed to create infrastructure finance. When you are part of the transaction, when you are part of the deal, I knew you basically are in it for, I mean, 16, 18, 24 months, you know, up to closing. Uh, and ultimately, you see the construction and the build up being completely completed and then going into operations. That's an immense satisfaction. That actually gives a sense of what? All the work you did. You did it. And you spent so much energy and and you spent so much time because of that. And, and and that's the translation of those concrete things, you know. It could be an airfield. It could be a terminal. It could be, um, a bridge or a runway, I mean, whatever. But at the end of the day, it's very concrete. And I think this is really what seduced me and continues to seduce me in infrastructure finance. Now, I think it's also because it is related to the fact that it provides essential services to the population. Therefore, when you do this into developed countries, you participate, uh, to the well-being of, uh, of the population. When you do it in developing countries, you, uh, basically participate in the growth of the country by, uh, by, uh, providing them the population with essential services. And that's actually also an additional satisfaction.


[00:14:38] Host: Paul Barnhurst: Yeah. Do you have a kind of a favorite project you worked on, or one that stands out for you over your career?


[00:14:46] Guest: Patrick Daguet: Yeah. I mean, there were many. I mean, actually, it's a difficult choice to make because, uh. I mean, first of all, I liked all the deal I did because I think I was, uh, uh, I was very satisfied with the, uh, the, I would say the, uh, the project in itself. But, yeah, I think the one I am particularly proud of is, uh, quite surprisingly, it's not an essential service to the population. It's more of a recreational facility. I mean, I was part of the team, and I actually worked on it for 24 months of the team, which, uh, basically, uh, helped to, uh, structure and finance the French stadium, you know, the Stade de France, the French stadium, which actually accommodates 80,000 people. And, uh, at the time, it was one of the biggest stadiums in Europe. Uh, I know Spain has a bigger stadium than we have. I am a woman in Madrid. They have a stadium, which is a soccer stadium which actually can accommodate 125,000 people. The one we have in France is 80,000. But this one, I mean, I was particularly proud of it because I actually looked and actually saw every step in the way of its buildup. You know, I mean, the stadium was built around. You know, if you go to see pictures of the stadium, you will see the the stadium is in a novel form, and around its oval form you have 18 needles. And these needles, I have seen every one of them being built. You know, that's actually quite, uh, that actually strikes you for, for in your life. You can't, you can't for the bat. You can't.


[00:16:32] Host: Paul Barnhurst: It is really cool when you can actually see or feel or go into the stadium, you know, a project or in some way you could see how it impacts people's lives. It's just not the same versus okay, I did a bunch of stuff on paper and I have no idea what really ever happened. Yeah.


[00:16:53] Guest: Patrick Daguet: No, exactly. That's the purpose of it. I mean, again, it's a recreational facility. It's not like if you were providing a portable, uh, tap water to the people or electricity, but it's also, uh, it's a facility, so, you know, and that's really the one I kept in mind. Yeah.


[00:17:13] Host: Paul Barnhurst: While my background is in FP&A. I am also passionate about financial modeling. Like many financial Modelers, I was self-taught. Then I discovered the Financial Modeling Institute, the organization that offers the advanced financial modeling program. I am a proud holder of the AFM. Preparing for the AFM exam made me a better modeler. If you want to improve your modeling skills, I recommend the AFM program. Podcast listeners. Save 15% on the AFM program. Just use Code Podcast.



I'm curious, you know, in these project finance models, what are some of the biggest challenges or what's maybe the hardest thing in building a project finance model? I've heard from a lot of people. I've never built one myself, but I've heard they can be really challenging.


[00:18:09] Guest: Patrick Daguet: They are challenging in many ways, but I think the I mean, they have commonalities with the models we know in corporate finance. You know, you have the schedules, you have the revenue schedule, you have the cost schedule, you have the depreciation schedule, the tax schedule, every schedule we can see in the corporate finance model we also have it. So this is not an element of complexity compared to a corporate finance model. But what is complex is it's very difficult to obey. I have never seen a project finance model vertical model, so I mean all are horizontal model and the horizontal model, which is not my favorite. And my preferred way of working in a model involves some complexity, because obviously you switch from one worksheet to another worksheet and constantly, almost constantly, which is quite complex. The debt schedule and the debt module is particularly complex as well, because you have several countries of debt, senior and subordinated mezzanine debt, up to shareholder loan and equity. And that actually in itself is much more complex than the one you can have on corporate finance models. You have, uh, you have a lot of relationships between the worksheets, uh, which makes it complicated not to talk and not to speak about the sensitivity and the scenario you run. Because in a typical project finance model, not only yourself as a sponsor, but also the banks would probably ask for ten, 15, 20 sensitivities and scenarios. So you need to build a scenario sheet which is much, much more, uh, dense than a traditional scenario sheet you would build for a corporate finance model. So in these aspects, you know, uh, yes, they are more complex. Therefore you need to, uh, you need to build every step of the way. You need to build a model which is flexible. Otherwise you will be done. So you need to I mean, flexibility is always present in our model, but it's even more important in the project finance model.


[00:20:25] Host: Paul Barnhurst: Yeah. It sounds like you know a few things. One, you generally are building horizontally, which anytime you have a lot of sheets and you're doing a lot of linking, you just have a higher chance of error versus having it all vertical. That's the one thing I've realized. You could do it either way. Just be aware of the pros and cons. And then as you mentioned, sensitivity and scenario. Having 1012 scenarios requires some real flexibility and structure. And so you really have to think about that design.


[00:20:55] Guest: Patrick Daguet: Exactly. And I think the design is of the utmost importance. We always emphasize and and and focus on how important is the design in the model. Yeah. On project financing, project finance. You cannot fail and you cannot miss, uh, this point, you need to really, really be careful about design. Absolutely.


[00:21:18] Host: Paul Barnhurst: Yeah. I mean, I've seen corporate finance models. Lots of people get by without good design. Now, do I want to use those models? No. Have I built plenty of them? Yes. Unfortunately, as I've learned over my career, where, you know, I could go back now, some of those models. My. Oh, no. There's no way I'm building it that way.


[00:21:39] Guest: Patrick Daguet: Agree? Do you agree?


[00:21:40] Host: Paul Barnhurst: No. That's how we work. We've all been there. I'm curious. Are there? You know, are there any assumptions that you say are probably the things people need to watch out for most when building, you know, kind of project finance models? Or are there any kind of real gotchas?


[00:21:56] Guest: Patrick Daguet: Yeah, I think the elements which are well, I mean, you will tell me that ultimately the parameters or the random variable we use in the corporate finance model are oftentimes linked to volume and price for the revenue side. And on the cost side, you have also to make sure you make this distinction between variable semi variable and fixed cost. We have the same issues in project finance. There is a volume price. Definitely are the key uh assumptions of a random variable. We would like to, uh sensitize. But on top of that, because of the duration and the term of those projects, which usually extend over 2535 years, is inflation. You know, when you build a finance finance model over five years or six years. Obviously inflation is important, but it's not as important as if you build a model for 35 years. So you have to be very careful about that because, uh, oftentimes you do that in a country which is, uh, foreign to yours. So, you know, you own that inflation, I mean, domestic inflation. But what about the, uh, possible inflation in a country where in a country where the project will be settled and situated and ultimately operated. So inflation is a key element to take into account. And obviously, because it's done sometimes in a local currency, when you raise money you raise money locally. So you also have different change and the evolution of the ethics Effects rate, which has an impact on the model, which could have an impact on the model. And you have to be a you have to take that into consideration. And obviously you have to take the cost of hedging these risks into consideration in the model parameters.


[00:23:52] Host: Paul Barnhurst: Sure.


[00:23:52] Host: Paul Barnhurst: Yeah, I.


[00:23:53] Host: Paul Barnhurst: Can imagine I mean anytime you're the longer you're going out, the more uncertainty, the more risk you're creating. Right? Time by nature of risk. Because time creates uncertainty. Nobody knows what tomorrow is going to be like. We all have an idea. Now try figuring that out in 35 years.


[00:24:12] Guest: Patrick Daguet: It's another story. And and and you know, if you raise money, for example, if you try to raise money, you may raise money. Uh, some money, for example, you can raise equity locally in local currency, but when you raise debt and you receive that, the debt could be, uh, denominated in USD. And if you issue that in US dollars and your revenue base is in, uh, I would say Turkish lira or whatever. You need to take these effects into consideration. And that's actually when you put that into the equation, it's an additional element of complexity.


[00:24:49] Host: Paul Barnhurst: Yeah, I.


[00:24:50] Host: Paul Barnhurst: Would imagine so. And that makes a lot of sense. I want to shift gears a little bit away from project finance and talk a little bit about teaching. I know you've been teaching at the university for nearly 15 years now. What motivated you to switch to teaching? You know, you had a career. You do, you know, project finance, different things like that.


[00:25:10] Guest: Patrick Daguet: That's a funny question because, um, that's the type of question I often ask myself, you know, really turn you to teaching. Yeah. And I think then and I, I'm sure everybody has in its own life already experienced that. But wait, when you basically just push the button on old and you on post and you think, um. I'm going to observe. I'm going to listen to what the people say, and maybe it will help me guide my future. That's exactly what happened back in 2010. You know, back in 2010, when I started my own consultancy business, I was wondering, what do I want to do? I want to do consultancy stuff, obviously, but I would also like to do other things. And many people in my relationships told me, well, you know, you are good if you are good at explaining things which are complex, clearly. And I say, really? Yeah. But I mean, one person told me, this second person told me, this third person told me this. So at the end of the day, I had a bunch of ten person told me the same thing, which is, you know, you are very clear when you explain things and you have pedagogical skill, you know.


[00:26:25] Guest: Patrick Daguet: And at that time, I was not realizing that pedagogical skills. I know a lot of, uh, seasoned, uh, Professionals who are extremely good and excellent, even excellent on their practice. But they won't be. They won't be teaching because they have no pedagogical skills. And I was told at the time that I had some pedagogical skills. So I said, okay, maybe I should listen to these guys because I should listen to them because maybe they are reflecting. They're sending me a message, a subliminal message, and I. Then I said, okay, why not? I try, why not? I try to teach and actually spend time like that. I started to teach at the business school, first at the university, then at the French business school almost immediately. I think I started with the university in 2011, and then I switched to the business school in 2013. And since then I have been teaching at the business school and also other business school, obviously finance. I also taught uh, some courses on project finance, obviously, but, um, yeah, I think that I found myself in a I actually found myself, uh, being comfortable in my comfort zone in, in, uh, in teaching. Yeah, absolutely.


[00:27:48] Host: Paul Barnhurst: Which makes a lot of sense. And there are definitely people that are very, very good at just doing the work that maybe not necessarily can teach. When you have both skills, you're able to do the work and you can teach. That's a really valuable combination. And people can learn a lot from somebody who has done the work and then goes and teaches versus, you know, sometimes you have people who teach and they can be great teachers, but they've never done the work. Right. There's just something you can offer when you've been in the trenches and you're good at explaining what it's really going to be like to somebody. So I think that's great. You made that switch and now I love teaching myself. Do you have a favorite memory from teaching, like any, you know, kind of maybe a student or experience or favorite part?


[00:28:36] Guest: Patrick Daguet: I have many, but one reach really popping up to my mind is related by way to, uh, financial modeling. I still have an extensive course on financial modeling at the business school. And basically what I'm doing is I'm building them a building with my students step by step. We are building a corporate finance model, and we are trying to do and even though we don't push that to the three statement model, we are going close to the three statement model. So our and what I'm trying to do is I'm trying to get them to a point where they have the balance sheet balanced, you know, and well, which sounds like, you know, trivial, but at the end of the day, not so trivial. And uh, and I remember some workshop where my students were at the master level. There we were at the end. Of course. Sort of. It was the last session and we were actually running through. Yeah. The balance sheet, you know, and we built this, you know, this test, you know, the test of I mean, throughout the period, you need to have a series of zero, which when it sums it goes to zero. And then if the test tells you that it's zero, the total assets minus total liability makes zero, then your balance sheet is balanced. And obviously the global check should be zero. And I remember that we reached that point. And at the time we reached that point my students were very, very happy. They were very vocal. You know, they were as as you did want something. They were achieving something and they were very proud of. And that really not it's something which you need to you need to leave that you need to really get into, to realize how emotional it can be.


[00:30:31] Host: Paul Barnhurst: Love that. And you know, it's funny. I think we've all had moments where we've celebrated when that balance sheet balanced.


[00:30:38] Guest: Patrick Daguet: Yes. Including myself? Yes.


[00:30:41] Host: Paul Barnhurst: You know, I've had some where you're just like, what am I doing wrong? Why is this not tying out? I remember, you know, I'll share mine. I think I've said this before. You know the I am. Yeah. I finished six of everything in about two hours. My balance sheet didn't balance. I spent a few minutes on it. I'm like, I'm just going to get everything else done. So I went through and cleaned up, you know, just all the little things I wanted to. And I came back to it. I had about half an hour left, and it took me about 15 minutes to figure out why it wasn't balancing. Finally, I just realized I'd put a parentheses in the wrong place and just celebrating like, okay, now I feel comfortable that I might actually pass now that my balance sheet balances. I've been there. It was. Yeah, it was a stressful moment. I don't want to fail the test.


[00:31:27] Guest: Patrick Daguet: Neither are emotions. Exactly.


[00:31:30] Host: Paul Barnhurst: Yeah. So let's talk a little bit. I want to talk. Financial Modeling Institute I know you've done the AFM, and now you lead a study session for students, kind of preparing them for the chartered financial modelers for the CFM. Maybe talk a little bit about that.


[00:31:42] Guest: Patrick Daguet: Oh, sure. I mean, we have started, uh, first of all, the idea of a study group came in my mind because I realized that, uh, there were no study group. Uh, there were study group. They have actually, they have study groups for, uh, for the advanced financial model, uh, modeling. But I didn't at that time, they didn't have any study group for the CFM. So I actually discussed this with Yan Yan Shneur, and I said maybe it would be good if we can, uh, we can build a study group. He said, well, why don't you take the initiative to, uh, to spread the initiative and to to evaluate this such a study group. And I was wondering, wow, that's a very big responsibility, especially because I am a candidate. I'm not a CFM, uh, CFM holder. So I actually took it as a challenge and I said, yeah, let's let's do that. So since September 1st, 2024, I am obviously, um, we have a small group of, I would say 4 or 5, uh, usual candidates. Uh, I mean, we have been on a regular basis. We meet every Tuesday, uh, through the night for an hour and 30 minutes, approximately an hour and 30 minutes. And on each of those sessions, we review a case study, which, uh, which is obviously the CFM, one of the CFM case study. And we discussed the way we solved the difficulties we met, the possible hurdles we overcame or we ultimately, uh, succeeded to overcome. And, uh, and we learned a lot from others And in this initiative, I have been, uh, I have been obviously, uh, accompanied by, uh, talented CFM holder, who is Judith Sink, probably, you know, Judith, because Judith is, uh, kind of a person which is very active in, uh, in the FMI community.


[00:33:43] Guest: Patrick Daguet: And Judith, despite the fact she has the CFM now, she earned the CFM last year and she could have, uh, probably spent other useful, uh, time in other things and participating in these study groups. She decided to be part of the study group every Tuesday, no matter what. And I think that's me personally, I said it. I mean, Judith, that's great you do that, but you are not obliged to do that because you have the CFM already. And she did it by pleasure. And I have to say that, yes, not only this is technical and obviously it's highly technical, but it's also a human experience. In other words, what I like in this study groups is as much as the human, uh, atmosphere or the human touch as the technical stuff. So technically, we learn a lot. Every Tuesday we learn a lot. And we, um, we learn from our mistakes. We learn from being wrong. We learn from failing, and. But even more so, I think there is no judgment. There is no, you know. Everything is done in a very, very positive way. And as I said, for me it's a human experience. I think it's just huge. And how stunning, uh, what you can get out of the people you have never met in person. And you can actually talk and, and, and and have a walk every Tuesday on things of a common interest. And I think, yes, it's, it's great. Pretty great.


[00:35:21] Host: Paul Barnhurst: Bad financial models can lead to bad decisions or worse. So, how do you minimize the risk of a bad model? You make sure the models you build are great. The Financial Modeling Institute developed the Advanced Financial Modeler accreditation program to help modelers like you. The AFM program offers a step-by-step approach to building world-class financial models. The program ensures that you know the best practices in model design and structure, and will help you brush up on your Excel and accounting skills to be the one on your team to build great models. If you want to impress your boss and your clients, get AFM accredited. Podcast listeners. Save 15% on the AFM program. Just use Code Podcast at www.FMInstitute.com/podcast.



[00:36:26] Host: Paul Barnhurst: You know, definitely put that plug out there for people doing CFM to attend. I know I'm hoping to make some of them here in the future. It's been a little bit of a difficult time for me this summer, but it's on my list to do some of them because I need to start studying so that I don't fail the test.


[00:36:41] Guest: Patrick Daguet: But I think for those who can, who can't attend and and we know that you have many we have recorded every session. So we have put all these recordings and you can watch these recordings whenever you want. And I myself, I won't be able to attend all of those in the next few weeks because I am going on holiday. But I know that if I want, I will be able to watch these recording, uh, when I when I will be back when I, when I, when I'm back. Yes.


[00:37:14] Host: Paul Barnhurst: Great resource that you do that. Yeah. We all need those vacation times. All right I'm going to move to some standard questions we ask every guest. So the first one is do you have a favorite shortcut in Excel.


[00:37:28] Guest: Patrick Daguet: Uh, yeah, I have one, uh, control. Uh, it's a no code. It's a no code word control C alt ESF. So copy-paste special formula. So Ctrl C at alt.


[00:37:46] Host: Paul Barnhurst: Yeah. Alt ESF. Yep. I use that one all the time. Yeah, yeah. I'm not surprised to hear you say that.


[00:37:54] Guest: Patrick Daguet: Uh, I am using this, uh, almost constantly here.


[00:37:57] Host: Paul Barnhurst: Alt s f alt ESV, depending on what I'm doing. Sometimes I want the values, but that whole pay special with copy is fabulous, so I like that one. What's the most unique or fun thing you've used Excel for in your personal life? Have you built any kind of model personally, that's kind of unique or.


[00:38:19] Guest: Patrick Daguet: Thankfully, I'm going to phrase it that way. Thankfully, I have no courses. I've not delivered any course on entrepreneurship. When I say, I say thankfully, it's because sometimes I would have been viewed as an expert in entrepreneurship, which I am not. And I mean, I've done some entrepreneurial initiative and some failed badly. And this, this one was one which failed, which failed badly. And I've been the financial model for that. And this is a funny stuff because it's actually, uh, one. I was a, I built a financial model on, not on the manufacturing, but on the purchasing and selling in the French market, uh, of Belgium. Waffles.


[00:39:13] Host: Paul Barnhurst: But I like Belgian wine. I like it.


[00:39:16] Guest: Patrick Daguet: The Belgian. So you have two, two types of waffles. You have the I would say you have the, uh, those who come from Brussels and the ones we come who come from another city and the one who comes from Brussels are rectangular. But this is not the one I was. I was intending to sell. This one I was intending to sell were the ones coming from a city whose name is Liege in Belgium. Liege is a city where you can purchase and eat Belgian waffles, and they are different from the Brussels one. The Brussels ones have. No, I would say they have a different flavor. This one's the one from each other, a special flavor. And that's actually the one I was intending to sell in the French market. So I built the financial model from a corporate finance financial model, a business plan, and unfortunately this business plan did not materialize.


[00:40:19] Host: Paul Barnhurst: Yeah, well, you know, we've all had those ideas that haven't quite gone as planned. And I love a good waffle. I had more than I should have last night for dinner, but we won't talk about that. I love it. So we're going to move into our rapid fire section. I know you've listened to the show, so you know roughly how this works, but I always like to lay the ground rules. You can't give the it depends answer. You have to pick a side. So if you had to pick, which one would it be. You know, is it just kind of a yes or no.


[00:40:54] Guest: Patrick Daguet: Okay. It's going to be quick. So I need to be, uh, focused, huh?


[00:40:57] Host: Paul Barnhurst: Yep. Focus. Kind of quick answers. Then at the end you can elaborate on 1 or 2, because I recognize there's nuance to all of these. And there'll be somewhere you're like, I hate saying yes or no.


[00:41:07] Guest: Patrick Daguet: Okay, I'm.


[00:41:08] Host: Paul Barnhurst: Some people have a harder time than.


[00:41:09] Guest: Patrick Daguet: I'm crossing my fingers because I fear some of them could be hot. So okay, now I'm focused. I'm.


[00:41:16] Host: Paul Barnhurst: Yeah. You're not. You're not the only one who feels that way. You're not alone.


[00:41:20] Guest: Patrick Daguet: I'm trying to get ready. I'm ready. You can go.


[00:41:23] Host: Paul Barnhurst: All right. Circular references in models. Yes. Oh, no.


[00:41:27] Guest: Patrick Daguet: No. No offense.


[00:41:29] Host: Paul Barnhurst: How about VBA?


[00:41:31] Guest: Patrick Daguet: No.


[00:41:32] Host: Paul Barnhurst: Okay. Horizontal or vertical? Which do you prefer?


[00:41:35] Guest: Patrick Daguet: Vertical.


[00:41:36] Host: Paul Barnhurst: Yeah, and I could have answered that one for you. Um. Dynamic arrays in models. Yes or no?


[00:41:42] Guest: Patrick Daguet: Yes. Yes. Dynamic arrays.


[00:41:45] Host: Paul Barnhurst: What about fully dynamic arrays like having 100% dynamic models? No, that's typically what we get on that one. External workbook links.


[00:41:57] Guest: Patrick Daguet: No no.


[00:41:58] Guest: Patrick Daguet: No no no no no no no no no no no no no no.


[00:42:02] Host: Paul Barnhurst: I.


[00:42:02] Guest: Patrick Daguet: Figured oh yeah.


[00:42:03] Host: Paul Barnhurst: No I've had a few people that have gone not only no but hell no.


[00:42:09] Guest: Patrick Daguet: Yeah.


[00:42:11] Host: Paul Barnhurst: So named ranges. Yes or no?


[00:42:15] Guest: Patrick Daguet: Uh, yes. Yes. Can definitely help. Yes. Mm.


[00:42:19] Host: Paul Barnhurst: Do you follow formal standards like fast or smart when you model?


[00:42:24] Guest: Patrick Daguet: Yes I do.


[00:42:26] Host: Paul Barnhurst: Okay. Do you think financial modelers should learn Python in Excel?


[00:42:31] Guest: Patrick Daguet: Actually, that's a tricky one. According to the way you ask the question. And you use the word you use should. I would say no.


[00:42:41] Host: Paul Barnhurst: Okay. Yeah. Totally. Fine. What about Power Query?


[00:42:45] Guest: Patrick Daguet: Uh, to the contrary, I would say yes.


[00:42:48] Host: Paul Barnhurst: What about Power BI?


[00:42:49] Guest: Patrick Daguet: Yes as well. And for me, it actually goes in power. Sort of. Yes. Yeah yeah yeah.


[00:42:55] Host: Paul Barnhurst: Yeah. Will excel ever die?


[00:43:01] Guest: Patrick Daguet: Uh, I don't think so. I'm confident I will be. I mean, excel will survive me. I won't see, I won't see Excel in the grave. Certainly not. No, no.


[00:43:13] Host: Paul Barnhurst: When you said survive me, I had someone answer with yes. I just hope it's not in my lifetime.


[00:43:21] Guest: Patrick Daguet: Yeah, that's a good one. That's a good one.


[00:43:24] Host: Paul Barnhurst: Yeah, I thought it was a good answer. Do you think I will build the models for us in the future?


[00:43:28] Guest: Patrick Daguet: Uh, no, I don't think so.


[00:43:31] Host: Paul Barnhurst: Okay. And then do you believe financial models are the number one corporate decision making tool? Yes I.


[00:43:40] Guest: Patrick Daguet: Do.


[00:43:41] Host: Paul Barnhurst: Okay. And then this is an easy one. What's your lookup function of choice? Do you have a favorite lookup function?


[00:43:47] Guest: Patrick Daguet: Well yes I maybe I can elaborate a bit on this one. I used to use v and h, the so-called even h lookup, and also the lookup. The naked lookup. Then I moved to um yeah, move to index match, which is uh, not a bad alternative, but the best of the best in my opinion is X lookup.


[00:44:09] Host: Paul Barnhurst: I prefer x lookup. There are a few rare cases where you know index match can do something Ex lookup can, especially if you're referencing different tables. But majority of the time I personally am like you. I prefer x lookup and so that would probably be my first choice as well. So are there any others you wanted to add any context to? I realize there was nuance to all of those.


[00:44:36] Guest: Patrick Daguet: Yeah, I think that's, that's that, that's a tough one. I mean, these are tough questions. I mean, most of them were okay, but some  I struggled on. Yeah, that's.


[00:44:47] Host: Paul Barnhurst: Hopefully the idea because, yeah, the whole idea in this section is to make it a little fun and get different opinions, you know, because you may say yes. And another person who teaches at a university may say no to the exact same question. It's like, well, why is he saying yes? And he's saying no because there's nuance here.


[00:45:08] Guest: Patrick Daguet: Definitely, definitely, definitely. I agree 100%. 2%.


[00:45:12] Host: Paul Barnhurst: Yeah. And so as we wrap up, I know we're coming up at the top of the, uh, the hour, our time together. I've. I've loved chatting with you. I'm excited to release this to my audience. And so just some parting advice you'd like to leave with our audience about modeling? You know, if you could leave a piece of advice with them. What would you give them?


[00:45:33] Guest: Patrick Daguet: I mean, as we said, last but not least, because this one is not easy. I would say for me, if I want to give them advice is never lose, never lose. The curiosity and the enthusiasm which will constitute your best fuels you best fuel for progressing and for evolving. And I think this is really the engine that means curiosity and enthusiasm are the fuel for the process. Definitely never lose that. Never lose this. Keep it with yourself. Nurture it. Not try it. Yes.


[00:46:12] Host: Paul Barnhurst: I really appreciate that answer. I get that so often from people who are curious. Curiosity. If there's one thing that I've learned from this podcast. Whatever you're doing in life, if you want to have a greater chance of success, be curious, ask questions and learn for the sake of learning, not the sake of being right, which sometimes you have people being curious to try to, you know, prove a point. And so I, I just love what you said there.


[00:46:44] Guest: Patrick Daguet: Agree. Absolutely.


[00:46:46] Host: Paul Barnhurst: So what we'll do is we'll put, you know, your LinkedIn profile in the show notes. So if somebody wants to contact you they can. And we also know they can find you on the Financial Modeling Institute. You do this CFM program there and you enjoy going on holiday here in a few weeks. I'm a little jealous. We did hours earlier.


[00:47:03] Guest: Patrick Daguet: But yeah, we'll be taking some weeks off, a couple of weeks off. And uh, but actually this year will be a show of vacations because I need to get back into speed early on for the academic year and also for the CFM. I need to be prepared for the CFM as much as I can. Yes.


[00:47:23] Host: Paul Barnhurst: Yeah, I know that's coming up quickly.


[00:47:25] Guest: Patrick Daguet: Exactly.


[00:47:25] Host: Paul Barnhurst: Thank you again, Patrick. I really enjoyed having you on the show.


[00:47:28] Guest: Patrick Daguet: Thank you very much. Thank you. You have invited me. Thanks a lot.


[00:47:33] Host: Paul Barnhurst:Financial Modeler's Corner was brought to you by the Financial Modeling Institute. This year, I completed the Advanced Financial Modeler certification and it made me a better financial modeler. What are you waiting for? Visit FMI at www.FMInstitute.com/podcast and use Code Podcast to save 15% when you enroll in one of the accreditations today.

Paul Barnhurst
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