Here’s a comprehensive collection of checklists and templates to help you streamline the financial modeling process. These tools cover planning, data input, building the model, and analysis.
Purpose: Define the scope, purpose, and structure of the financial model before building it.
| Task | Completed (?/?) | Notes |
|-----------------------------------------------|---------------------|----------------------------------------------|
| Define the purpose of the model | | E.g., valuation, forecasting, decision-making. |
| Identify the key stakeholders | | Who will use the model? (Investors, internal team). |
| Collect relevant historical data | | E.g., revenue, expenses, balance sheets. |
| Define key assumptions | | Growth rates, margins, tax rates, etc. |
| Choose the type of model | | DCF, three-statement, M&A, or LBO. |
| Create a timeline for development | | Break the project into phases (e.g., data collection, building). |
| Set validation and review checkpoints | | Plan peer reviews or testing phases. |
Purpose: Ensure accurate, consistent, and relevant inputs for building the model.
| Category | Input | Completed (?/?) | Notes |
|---------------------------|--------------------------------------|---------------------|----------------------------------------|
| Revenue | Historical revenue data (last 3–5 years) | | Break down by segment, product, or geography. |
| | Growth assumptions (e.g., 10% YoY) | | Adjust for seasonal trends or market conditions. |
| Expenses | Historical cost data (COGS, operating) | | Categorize into fixed and variable costs. |
| | Expense ratios (e.g., COGS/Revenue) | | Identify trends or benchmarks. |
| Assets | Current and fixed asset details | | Include depreciation/amortization rates. |
| Liabilities | Short-term and long-term liabilities | | Include loan schedules, interest rates. |
| Equity | Shareholder equity, retained earnings | | Extract from the balance sheet. |
| Tax Rates | Corporate tax rates | | Include local/regional variations. |
Purpose: Ensure all model components are logically connected and functional.
| Category | Task | Completed (?/?) | Notes |
|---------------------------|-----------------------------------------|---------------------|----------------------------------------|
| Structure | Create separate input, calculation, and output sheets | | Simplifies organization and debugging. |
| Assumptions | Build an assumption sheet | | Use color coding for input cells (e.g., blue for inputs). |
| Revenue Forecasting | Link historical trends to assumptions | | Use growth rates or driver-based forecasting. |
| Expense Forecasting | Forecast fixed and variable expenses | | Tie variable expenses to revenue growth. |
| Depreciation/Amortization | Use schedules based on asset lifespan | | Automate using formulas for consistency. |
| Debt/Interest | Build a debt schedule | | Calculate interest expense based on outstanding debt. |
| Working Capital | Forecast changes in AR, AP, and inventory | | Use days ratios (e.g., DSO, DPO, DIO). |
| Financial Statements | Link the Income Statement, Balance Sheet, and Cash Flow Statement | | Ensure the three statements are fully integrated. |
| Error Checking | Add checks for Balance Sheet balancing | | Example: Assets = Liabilities + Equity. |
Purpose: Verify the model’s accuracy, consistency, and usability.
| Task | Completed (?/?) | Notes |
|-----------------------------------------|---------------------|----------------------------------------|
| Cross-check historical data with source files | | Verify inputs against financial reports. |
| Validate formula consistency | | Ensure no broken or circular references. |
| Test key assumptions | | Adjust inputs to check output logic. |
| Conduct sensitivity analysis | | Evaluate how changes in assumptions impact results. |
| Ensure the Balance Sheet balances | | Double-check: Assets = Liabilities + Equity. |
| Check for hardcoded values in formulas | | Inputs should be separate from calculations. |
| Add a summary/dashboard for clarity | | Include key metrics and visualizations. |
Purpose: Summarize the results in a clear and actionable format for stakeholders.
| Output | Completed (?/?) | Notes |
|---------------------------|---------------------|----------------------------------------|
| Income Statement | | Include key metrics like revenue growth and EBITDA margin. |
| Balance Sheet | | Confirm balances for Assets, Liabilities, and Equity. |
| Cash Flow Statement | | Highlight operating, investing, and financing cash flows. |
| Key Ratios | | Examples: ROE, ROA, Debt-to-Equity, Current Ratio. |
| Sensitivity Analysis | | Present results under different assumptions (e.g., growth rates, WACC). |
| Charts and Visualizations | | Use bar charts, line graphs, and tables for clarity. |
Purpose: Predict revenue based on historical data and growth assumptions.
| Year | Revenue ($) | Growth Rate (%) | Formula |
|---------------------------|----------------------|----------------------|----------------------------|
| Year 1 (Actual) | $1,000,000 | N/A | Input |
| Year 2 (Forecast) | $1,100,000 | 10% | = Year 1 × (1 + Growth Rate) |
| Year 3 (Forecast) | $1,210,000 | 10% | = Year 2 × (1 + Growth Rate) |
Purpose: Calculate EBITDA and key profitability ratios.
| Metric | Value ($) | Formula |
|--------------------------|----------------------|--------------------------------------|
| Revenue | $1,000,000 | Input |
| COGS | $400,000 | Input |
| Gross Profit | $600,000 | = Revenue - COGS |
| Operating Expenses | $200,000 | Input |
| EBITDA | $400,000 | = Gross Profit - Operating Expenses |
| Operating Margin (%) | 40% | = EBITDA / Revenue × 100 |
Purpose: Value a company using the Discounted Cash Flow (DCF) method.
| Year | FCF ($) | Discount Factor (1/(1+r)^t) | Present Value (PV) |
|---------------------------|---------------------|---------------------------------|-------------------------|
| Year 1 | $100,000 | 0.909 | $90,909 |
| Year 2 | $120,000 | 0.826 | $99,120 |
| Year 3 | $150,000 | 0.751 | $112,650 |
| Terminal Value (TV) | $1,650,000 | 0.751 | $1,238,150 |
| Total PV | | | $1,540,829 |
Purpose: Analyze how changes in key assumptions affect valuation.
| Assumption | Scenario A | Scenario B | Scenario C |
|---------------------------|---------------------|---------------------|---------------------|
| Growth Rate (%) | 5% | 10% | 15% |
| WACC (%) | 8% | 10% | 12% |
| DCF Value ($) | $1,200,000 | $1,000,000 | $800,000 |
These checklists and templates will help you structure your financial models effectively, validate their accuracy, and present actionable insights.