Financial Modeling in Excel For Dummies

Chapter 10

Building an Integrated Financial Statements Model

IN THIS CHAPTER

Learning about financial statements

Entering assumptions

Calculating revenue and expenses

Building the financial statements

Adding scenarios

Financial statements are the mainstay of many financial models. The financial statements consist of three reports:

• Income statement
• Cash flow statement
• Balance sheet

Some financial models might include only a profit-and-loss statement, some might include simply a cash flow statement, but many include all three. If a financial model does contain all three, you might hear it referred as a three-way financial model.

What you really need to know about financial statements from a financial modeling perspective is that they should hang together and interrelate with each other with links. This is called an integrated financial statement.

Every output in a financial model ...