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Answer :
Final answer:
The best practice for financial modeling in Excel is to use a black font for hard-coded numbers and a blue font for formulas. This allows a clear distinction between inputs and calculations, improving the model's readability and navigability.
Explanation:
The best practice for financial modeling in Excel is D. Use black font for hard-coded numbers and blue font for formulas. This method is commonly utilized in financial modeling as it maintains consistency and improves readability. Hard-coded numbers, or constants, could be initial data inputs or assumptions and are typically denoted in a black font. On the other hand, formulas, which are the calculations based on those hard-coded numbers, are often marked in blue. This approach provides a clear distinction for the user between inputs (hard-coded numbers) and calculations (formulas), making the financial model more user-friendly and easier to audit or adjust.
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