Known Limitations & Assumptions
Understanding what the platform can and cannot do
Reading time: ~8 minutes
1. Why Assumptions & Limitations Matter
Purpose of This Document
This page documents the boundaries of what FinanceModel can do, the assumptions built into the platform, and your responsibilities as a user. Understanding these boundaries helps you use the platform effectively and interpret outputs appropriately.
Why Transparency Matters
Every tool has limitations. Financial modeling software is no exception. By being explicit about what the platform assumes and where it has constraints, we help you make informed decisions about when and how to rely on its outputs.
No Tool Replaces Judgment
FinanceModel is a decision-support tool, not a decision-making tool. It helps you organize information, test scenarios, and explore relationships between variables. The quality of outputs depends entirely on the quality of inputs and assumptions you provide.
Who Should Read This
This document is written for analysts, executives, compliance reviewers, and anyone who needs to understand the boundaries of platform outputs. If you are using FinanceModel outputs in a professional context, understanding these limitations is essential.
2. Data Assumptions
FinanceModel processes data you provide or import. The platform makes certain assumptions about data quality and format. Understanding these assumptions helps you prepare data effectively.
Data Input Assumptions
- •Accuracy — The platform assumes data you provide is accurate. It does not independently verify the correctness of input values.
- •Completeness — Models calculate based on the data available. Missing data may result in incomplete or inaccurate outputs.
- •Consistency — The platform assumes data within a model uses consistent units, time periods, and accounting treatments.
- •Currency — Data is assumed to be in the currency specified. The platform does not automatically convert currencies or adjust for exchange rate fluctuations.
Data Extraction Assumptions
- •PDF and document extraction — Extraction accuracy depends on document quality, formatting, and clarity. Always verify extracted values against source documents.
- •Excel imports — The platform imports values and basic formulas. Complex macros, custom functions, and certain Excel features may not transfer.
- •Data mapping — Automatic data mapping uses pattern recognition. Review mappings before relying on imported data.
Your Responsibility
You are responsible for verifying that data in your models is accurate, complete, and appropriate for the analysis you are conducting. The platform provides tools, but data quality is your responsibility.
3. Modeling Assumptions
Financial models in FinanceModel follow standard modeling conventions. Understanding the assumptions embedded in these conventions helps you interpret outputs correctly.
Calculation Assumptions
- •Time value of money — Discounting uses end-of-period convention unless otherwise specified. Mid-year convention is available but must be explicitly selected.
- •Growth rates — Percentage growth rates are applied to the prior period value. Compounding follows standard conventions.
- •Linear interpolation — Where models require values between explicit inputs, linear interpolation is typically used.
- •Terminal value — Terminal value calculations assume a perpetual growth model. The appropriateness of this assumption depends on your specific situation.
Structural Assumptions
- •Balance sheet balancing — The platform uses standard plug mechanisms. Review the balancing approach for your specific model type.
- •Circular references — Circular calculations (like interest on debt) use iterative solving. Results converge to within specified tolerances.
- •Scenario independence — Each scenario is calculated independently. Changes in one scenario do not affect others unless explicitly linked.
Outputs Are Not Predictions
Model outputs show what would happen if your assumptions were true. They do not predict what will actually happen. Real-world outcomes depend on factors that models cannot fully capture.
4. Technical Limitations
Like any software, FinanceModel has technical constraints. Understanding these helps you work within them effectively.
Scale & Performance
- •Row limits — Models support up to 10,000 rows. Larger datasets may require aggregation or multiple models.
- •Calculation time — Complex models with many interdependencies may take longer to recalculate. Extremely large models may experience delays.
- •Concurrent users — Real-time collaboration has practical limits. Very large teams editing simultaneously may experience sync delays.
File & Format Limitations
- •File size — Uploads are limited to 50MB per file. Larger files must be split or compressed.
- •Supported formats — Import supports Excel (.xlsx, .xls), CSV, and PDF. Other formats require conversion before import.
- •Export fidelity — Exports to Excel and other formats preserve core data and calculations. Some formatting or features may not transfer exactly.
Browser & Connectivity
- •Browser support — FinanceModel is optimized for modern browsers (Chrome, Firefox, Safari, Edge). Older browsers may have reduced functionality.
- •Internet connection — The platform requires an active internet connection. Offline access is not currently supported.
- •Session timeouts — Extended periods of inactivity may require re-authentication. Work is auto-saved, but unsaved changes during timeout may be lost.
5. AI & Automation Limitations
Finny, the AI assistant, and other automated features have specific capabilities and constraints. Understanding these helps you use automation effectively.
What AI Can Do
- •Answer questions about how to use FinanceModel features
- •Explain financial modeling concepts and terminology
- •Suggest approaches for structuring models
- •Help interpret calculation results and identify potential issues
- •Assist with formula construction and debugging
What AI Cannot Do
- •Provide financial advice — Finny cannot tell you what assumptions to use, what decisions to make, or whether an investment is good or bad.
- •Guarantee accuracy — AI suggestions may contain errors. Always verify AI-generated content before relying on it.
- •Access external data — Finny operates within the context of your current session. It cannot access external databases, APIs, or real-time market data.
- •Replace professional judgment — AI is a tool for assistance, not a substitute for domain expertise, experience, or critical thinking.
- •Make autonomous changes — Finny cannot modify your model without explicit confirmation. You remain in control.
AI Output Variability
AI responses may vary slightly between sessions. The same question may produce different wording (though not different meaning) at different times. This is normal behavior for AI systems.
Automation Limitations
Automated features like data extraction, formula suggestions, and error detection use pattern recognition. They work well for common patterns but may miss unusual situations. Always review automated outputs.
6. Responsibility & Judgment
FinanceModel provides powerful tools for financial analysis. How you use these tools, and the decisions you make based on outputs, are your responsibility.
Your Responsibilities
- •Input accuracy — Ensuring the data and assumptions you enter are accurate, complete, and appropriate for your analysis.
- •Model validation — Testing your models to confirm they behave as expected and produce reasonable results.
- •Output interpretation — Understanding what model outputs mean and do not mean, and their limitations.
- •Decision making — Exercising professional judgment when using model outputs to inform decisions.
- •Compliance — Ensuring your use of the platform and its outputs complies with applicable laws, regulations, and professional standards.
Platform Responsibilities
- •Calculation accuracy — The platform accurately performs the calculations it describes, given the inputs provided.
- •Data security — Protecting your data according to our security practices and privacy policy.
- •Transparency — Being clear about how features work, including their limitations.
- •Availability — Making reasonable efforts to keep the platform available and operational.
Not Professional Advice
FinanceModel does not provide financial, investment, legal, tax, or accounting advice. If you need professional advice, consult a qualified professional. The platform is a tool for analysis, not a source of professional guidance.
When in Doubt
If you are unsure whether a model output is appropriate for a particular use, err on the side of caution. Seek additional validation, consult with experts, or conduct further analysis. Model outputs are starting points for analysis, not final answers.
Using the Platform Responsibly
The most effective users of FinanceModel combine the platform's analytical capabilities with their own expertise and judgment. Use the platform to enhance your analysis, not to replace critical thinking.
Related Resources
Questions About Limitations?
If you have questions about specific limitations or need clarification on whether the platform is appropriate for your use case, we're here to help.