Today, I met with Mrs. Spurgeon on campus to discuss my model as it is and how to take it a step further.
My model right now makes sense, and anyone who knows basic finance and has background knowledge can easily use my model. But there’s an issue: the goal is for the model to be as user-friendly as possible, but what about it being easy enough for someone who has no basic knowledge about finance? For instance, I’ve learned a lot about finance since I began my independent study, and if I didn’t have the knowledge that I have now, I would have no idea how to use such a model that I have created. Today, we discussed how to make the model even easier to use than it is now.
We discussed two ways of doing this: either creating drop-down menus directly within the model, or creating a simplified table in which information can be added. I’ll use the example of revenue earned from tuition in an expansion to illustrate both methods of simplifying the model.
If I were to add a series of drop-down menus and fill-in boxes, the user would open the menu or fill in a numerical answer into a box to answer the question. For example, a question may ask, “how many students do you expect?” The user would fill in the box with the expected number of students. The next question would ask the expected change in number of students over a ten year period. A subsequent question may even ask the amount or percentage of tuition increase per year. After the user answers all of these questions, the model uses these answers, along with the average net tuition paid per student, to calculate the amount of tuition generated over the next ten years. This allows the user to do even less work in learning how to use the model. The end result for this is that the model would be able to easily calculate the amount of tuition revenue generated, just by answering these questions. This result gets inputted into the main portion of my model which calculates financial metrics and ratios.
The other option is to add another table to my model that would prompt users to fill in data for amount of expected students, percent increase in tuition, and the current net tuition per student. This is the same as doing what I described above, as all of the same questions are being asked and users are giving the model data; they are just two different, but equally good ways of doing this. Once again, the end result would be the ability to easily find the total amount of revenue earned from tuition, just by filling in a couple boxes with information.
I would be doing this so that the model can calculate other important information pertinent to an expansion, such as the cost of teachers’ salaries.
Besides talking to Mrs. Spurgeon about my model, I also spent some of my day cleaning it up and doing some more experimenting. There are some other parts of my model that need to be cleaned up and refined. Hopefully, I will be able to send a draft of my model to the Business Opportunities Task Force by the end of the week for feedback, so I can present them my completed, final draft model at the next meeting.
By the end of the day, I understood what I would be working on, and I will be figuring out the details of this tomorrow. I know the point of what I’m doing, but I will have to figure out how to work out how to actually create the drop-down boxes by myself. So this is my assignment for tomorrow!
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