3 Statement Financial Model | Building From Scratch

[@giryilham5892]

this 38 minutes better than my whole years in undergraduate degree. Thank you soo much Eric!

[@eric_andrews]

Hey Giry, this comment makes me so happy you have no idea. This was the whole point of this channel, I was imagining what lessons would have helped me when I graduated from college. Awesome 😊

[@Johnnymemories]

Sadly its true

[@Johnnymemories]

Its not only what we learn from this video that teaches us but the frame of mind when handling excel. Thanks a million!

[@abdullahal-harbi8108]

@@eric_andrews Thanks a bunch man, you're a hero.

[@JMAH10ags]

X2

[@ricardodelgado5247]

Thank you for this video! I found this because I am in the middle of jobs interview and part of the process was a financial modeling test. I studied this video to prepare and I just received the email that I excelled on the test, and I will have the final interview with the CFO. Thanks again!!

[@eric_andrews]

That's amazing!!! Congrats ricardo! You don't know how happy that makes me to hear it. These are the kinds of messages that help me keep going creating content

[@chuckeallonardo9210]

Great video. Here's a helpful tip for those struggling to balance: if your balance sheet is not balancing, quite often it's because your fixed assets, capex, and depreciation are not in sync across the 3 statements. To test for this, take last year's fixed assets, net of amortization from last year's balance sheet, add capex expenditures from the cash flow statement (which increases net fixed assets), and subtract depreciation shown on the cash flow statement and income statement (which reduces net fixed assets). The result should be the net fixed assets on your current year balance sheet. if it's not, then you're out of sync, and your balance sheet won't balance until you fix it. FA, Deprec, and Capex are a closed loop and must work together.

[@jimmy.cco.612]

38 minutes of my life well spent. Great content. Thank you so much for this informative video.

[@eric_andrews]

Thank you for watching Jimmy C & Co!! Glad it was valuable

[@trypeace7735]

This deserves many many more views. Pure, succinct, free !! My best wishes to you, Eric !

[@eric_andrews]

I'm so glad it was valuable for you! My dream is to make information free - like it should be!! Cheers try peace

[@kwenadi4850]

What has been taking me 2 years and counting can literally take me a week or so thank you so so much. New, permanent subscriber here!!!! I'm starting with my financial projections right now @10:30pm.

[@Soumya009]

Oh man...what a presentation. Can't get any better than that. One of the best learning videos i have seen so far. Feels great that i stumbled upon on this video and did justice by spending 38 quality mins of my life. Thanks a ton Eric :) God bless you...

[@bocobox]

Great Tutorial for understanding Business with Excel. I need to watch your video over and over before I get the hang of it. Thanks

[@eric_andrews]

Awesome! And if you want to look at the Excel file, you can download the template in the description as well. Cheers!

[@modupeolukanni2027]

This video was phenomenal! Totally simplifies the 3 financial statements and links them. Allows you to clearly see the difference between all 3 statements. As an economic consultant and finance professional, this video has brought me great value! Thank you so much

[@eric_andrews]

Appreciate the comments and the feedback Modupe. So glad it was valuable for you. Cheers!

[@ch_cx4841]

Now I can easily understand the models and how they link-up together in simple logical explanation, no technical jargon that even hard to spell. Thanks Eric! ..looking forward for more videos.

[@DivoDivoFrankOfem]

Eric to see you had fun going through it without losing the audience... awesome.

[@eric_andrews]

Hey frank....I'm glad you made it through with me! I enjoy this stuff, thanks for the support. Cheers

[@perry612]

This is really incredibly helpful. I haven't built a model on my own before, and I think this really gave me a guide to doing it myself. Thank you so much!

[@eric_andrews]

you are very welcome i'm happy to hear it!

[@belindangelale6398]

You're amazing! I've watched this three times and it's really helped me with my forecasting. Thank you!

[@eric_andrews]

Love to hear it Belinda!!!!! 😎😎😎🙏

[@jayanthchunduru3437]

A really great video! Thank you so much because this helped me clear the interview of a boutique Investment Banking firm where the interviewer asked me how to link the Cash flow statement and the balance sheet and I at the back of my mind, I was like 'Thank you so much Eric Andrews'!

[@eric_andrews]

Literally one of my favorite comments I've ever received. So glad to be able help you in that situation! Wishing you great success out there!!!

[@jayanthchunduru3437]

@@eric_andrews According to you, what would be the most flattering answer to the question, Why Investment Banking?

[@eric_andrews]

@@jayanthchunduru3437 You mean, as an interview question? I actually work in startups, as I'm more interested in running companies than buying / selling them! But at the end of the day people sign on for i banking because you can get tons of experience understanding transactions, capital markets and companies in a short period of time. This will leave you with a broad skill set to do many things after a few years. And in terms of societal value, banks help businesses realize the value they've created by facilitating competitive transactions and getting businesses access to liquidity. Those events can change people's lives (employees / founders getting an exit), help companies grow, help the economy grow, etc, which can be very positive. I would focus on those points.

[@jayanthchunduru3437]

@@eric_andrews Thank you, Eric!

[@amusaazeez4410]

Well done job , please how to prepare financial statement using excel format in very simple way

[@dandreymann535]

This is amazing man, it helps me a lot for my business even though I'm studying CPA, it's so quick and clear with the video. THANK YOU

[@eric_andrews]

Stoked to hear it Dan! Thanks for watching. Cheers!

[@Juanracastel]

I have to felicitate you!!!!! To do this in 30 minutes, so well explained that a novice excel user can understand it, I am surprise!!!! you are indeed bless. thank you for sharing your teaching blessing in finance!!!! Looking forward to check other lessons.

[@eric_andrews]

Hey JR, it is my pleasure to help and I'm so happy that this video helped you learn these complex concepts. Appreciate the comment!!!!

[@thomaskorah4115]

Maybe the most useful 38 minutes I've spent this year. Fantastic!

[@aca19j]

Solid! The fluency of the explanation was very straight forward.

[@eldrain88]

I have 10 years experience as financial analyst and i can declare - this video is the best. Exactly what u need to know at the beginning

[@eric_andrews]

This comment really means a lot coming from someone like yourself !! Agreed - if someone coming out of college can build a model like this and has good excel skills, I think they should be good to go. Cheers iseeu666!

[@shruthy13391]

Wow ! This is so good. Thank you so much for the clear explanation. All accounting and finance students/professionals must see this.

[@un4zr3nalhaq88]

the last 38mins has been my best understanding of financial modedlling :-) thank you Eric

[@KG-sl1ve]

Well done. Your explanations are extremely clear. Thank you!

[@eric_andrews]

Happy it was helpful kyle. Cheers

[@skyinvest6087]

I smashed my interview in investment banking thanks to you man, with no prior experience, for my BBA internship, they were really really impressed !!!!!! thank you so much

[@eric_andrews]

🔥🔥🔥🔥🔥🔥 you deserve this Salim !!

[@marhabaqadis379]

Thank very very much. I was just totally lost, but you came along with your tutorial and made my day. 🙏🙏🙏

[@muhy1981]

I watched 2 of your video now back to back. I have always been interested in Excel and financing models but your videos saved me tones of $$$ in planned course fees. Thanks you

[@eric_andrews]

You are very welcome and I'm glad to hear it Muhy 👍

[@sibulansajuluta6730]

But all in all am so so happy ! Your video. Has simplified my life..Thank Thank you.. Respect dear brother

[@sasisreenathan3970]

most informative video i've seen on 3 statement modelling!!!! thank you Eric, please keep up the amazing work!

[@stevekorenstevek3068]

Just brilliant. Loved your presentation, loved how quickly you put the whole thing together. Very inspiring. thank you!!!!

[@eric_andrews]

You're very welcome!

[@aissa196]

Literally the best video ever!!! I built the entire model and understood it all. THANK YOU!!

[@eric_andrews]

haha, you're welcome

[@ShawnFX]

I hope to have a financial analyst job by November/December, I read building a 3 statement model is a must in every FA job interview, thank you for making this Eric!! God bless you!

[@eric_andrews]

My pleasure - good luck!!!

[@DMart012]

Thank You Eric, You explained this financial model in such an easy and understandable way.

[@eric_andrews]

I'm glad to hear it!

[@mj-sl2wg]

I really love this...Despite being CPA and having finance bachelor things have never been presented this clearly in my life. Thank you do much 💐😘

[@eric_andrews]

😎😎😎 makes me so happy to hear it! Cheers!!

[@aluabatyrgazhina9592]

Big thanks for that clear and understandable explanation, all financial accounting course in 38 minutes! just go ahead

[@eric_andrews]

I'm very glad to hear it, thanks for the comment Alua!

[@olawalebalogun1672]

This is very explanatory and simple to understand. Thanks Eric for the video.

[@eric_andrews]

You're very welcome!!

[@airdice1188]

Of course I'm subscribing, I'm most grateful for such a great presentation. You are a life saver.... Thank you

[@eric_andrews]

Thank you so glad it was helpful!

[@kameshthukkaram]

Eric: Thank you for the excellent content, your explanation was so amazing.

[@eric_andrews]

Hey Kamesh I'm really glad to hear that

[@danielsanchez-mq2gi]

Finally I can understand financial modeling. Thanks Erick

[@eric_andrews]

Haha that's the idea 🫡

[@nicolem.williams5511]

This information is so valuable, and I really appreciate the complete breakdown. Your channel is helping me so much. Thank you!!

[@eric_andrews]

@@nicolem.williams5511 my pleasure!!! Thanks for the comment

[@Mrsaries94]

not all heroes wear capes, but you wear the crown. Thanks for this Eric!

[@eric_andrews]

I appreciate that!

[@hendrylim2802]

I just realized that what I learned in college much more complicated and when you watch this 38mins video , you got insights which one is important Thank you for the vid

[@eric_andrews]

You are very welcome and I completely agree

[@sibulansajuluta6730]

I do appreciate Brother Eric! I have been a practitioner for self teaching on corporate finance..but your vide on build financial statements is reall good..Thank you very very much

[@ngozichristophinsam-imide9518]

You just made this feel so seamless. I got everything on point. You are a great Tutor. Thanks very much.

[@ShreeyaSagar]

Your explanation was great! I have always struggled with basic financial modelling and you made everything appear very simple! Thanks a ton!

[@eric_andrews]

Hey shreeya - really glad to hear it. Thanks for letting me know 😁

[@cavidbayramov5638]

Y

[@giuseppebv9068]

Dude, I have no other words but AMAZING for you and this video! Clear, concise and engaging, as I was following every step in the excel file you provided in the video description. I just found my new KZbin teacher!!

[@giuseppebv9068]

Just a tiny mistake I'd like to point out: under LIABILITIES > Accounts Payable & Deferred Revenue you called the raw "Total Current Assets". Should it not be Total Current Liablities? Thanks

[@eric_andrews]

@@giuseppebv9068 Ya that was a small mistake I made - glad you were paying attention and thanks a lot for the comments! Glad the video was valuable for you.

[@esteban_ruiz]

Really wonderful video, best 38 minutes of learning I've had all year! Source: I'm a quant

[@orchid5586]

I'm not sure where to start from. It's my first time and Im very confused. Are you supposed to memorize every single thing? For example what if I dont remember to add longterm debt. What happens then?

[@eric_andrews]

Absolutely love to hear that Esteban appreciate the comment 👍

[@tommyzhang4984]

Thank you so much, i've learned a lot and will keep watching your videos!

[@eric_andrews]

Glad to hear it, hope to see you in the comments section on some other videos !!!

[@majdsahmarany3091]

Thanks for the amazing video Eric, excellent as usual. I just need to raise one issue here, which is the way you calculated FCF (@33:57) I have a strong tendency to believe that you have made a mistake here, and let me explain please. FCF can only be equal to Cash flow from Operating Activities - Cash flow from Investing Activities IF THE COMPANY HAS NO OUTSTANDING DEBT ON WHICH IT PAYS INTEREST. In our case the company had an annual interest expense, and so to calculate FCF from the statement of cash flow it should be as follows: FCF = CF from OperatingActivities - Interest Expense + Interest Tax Shield - CapEx. You missed on the "Interest Expense" and the "Interest Tax Shield" and for anyone who is hesitant about this try to calculate the FCF using the original method which is FCF = EBIT(1-t) + Dep&A - Chg in NWC - CapEx and you will find that the numbers are different than in the Video, whereas if you include the "InterestExpense" and the "InterestTaxShield" as I mentioned they would be the same. Thank you

[@bhaskarjha4281]

One of the best videos on building a financial model I have ever seen. It's very concise and well-explained. Thanks a lot, Eric.

[@ErikWembstad]

Great performance. This was understandable and logical

[@aboka100]

where ever you are may whichever deity you pray to bless you infinitely

[@alfredosetiadi9925]

your explanation is very wonderful

[@erikasharron1664]

Thank you so much, I agree this is way better than years in undergraduate degree! thank you again

[@swastiksarkar2656]

This is exactly what I needed !! Thank you so so much Eric!

[@eric_andrews]

That's what I love to hear, cheers Swastik

[@ajityadav7555]

this video is gold...I am able to understand each and everything related to modelling thanks for being a CA student however i was getting problem in excel cause i am like beginner into it....love from india bro and thx for such excellent lesson

[@harenderkhatri]

Awesome.. This video is better than my MBA accounting class. Thanks Eric

[@asad398]

Thanks, Eric. You did a splendid job there. Your teaching skills make it quite easy to understand. You're doing a great job with these tutorials.

[@eric_andrews]

I appreciate that wolf man! Cheers

[@azhard7399]

I can't thank you enough Sir, the model you created is informative + fun. Please continue to upload such great stuff. Thank you 😍

[@eric_andrews]

Cheers Azhar 😎😎😎 will do!

[@oceanajay]

Just brilliant. Loved your presentation, loved how quickly you put the whole thing together. Very inspiring. thank you!

[@eric_andrews]

I'm so glad to hear it. Cheers!

[@paramvenkit9154]

Excellent and simple Eric ...

[@mariam1445]

Thank you Eric. This explanation is awesome. Very clear and simple.

[@eric_andrews]

Mariam - I love to hear that! Cheers!

[@BukhwaSithole]

thank you so much. Your video helped me for our business plan submission. Asante sana

[@eric_andrews]

My pleasure 🙌

[@danielshiferaw133]

Thank you so much Eric. You helped me understand building the financial models and do my work easily.

[@eric_andrews]

My pleasure Daniel 👍

[@rifatkhurshid3651]

WOW, well explained with basic data . It's really great and huge data can be handled very easily after watching this video . I did less or more in a same way but still got great idea and logic to compile the huge data .

[@eric_andrews]

Really really happy to hear that you now feel like you have working knowledge and understanding to do this yourself for companies. To be honest, it was tough getting it all into one video so I'm really glad it was helpful for you! This type of modeling took me a long time to learn because no one could really explain it to me in a coherent way, so my goal was to make it easier.

[@nickcorreiaful]

Thank you! Concise, to the point and weel explained.

[@achudakhinkudachin2048]

Right away, I see it is a good video! Eric is a real cool teacher. The skill is important, most analysts don't know who to integrate models with a balance sheet, so are prone to make all sorts of mistakes, which sometimes end up being dissected in courts. I like the layout of the model, even though I prefer to model all the three statements and have all the supporting statements on a single worksheet. And separate out each statement module with an empty gray row of cells. But I see little point in doing "Excel without a mouse" - saving in time is dubious

[@eric_andrews]

Hey achudakhin - thanks for the comment, really appreciate it! I agree with you that it can be easier to put everything on one sheet especially with simpler models like the one in my video. I will say however that when you are building models for a real company you'll see that the P&L and balance sheets are often enormous, sometimes many hundreds of rows because of how many accounts there are in real life situations. In those scenarios, doing everything on one worksheet gets too crazy and I think it is easier to split up. But it all depends on the situation and I appreciate you sharing your experience as well. Cheers!!

[@Tamarindgyal]

I left a small thank you, really helpful video

[@samm1834]

Starting a new career and this video really helped me build a strong foundation for financial models. Thanks so much!

[@eric_andrews]

Happy to hear it. Good luck Sam!

[@taniarabisheva8381]

Great Job, Eric! Watching this video actually provided answers to the questions of the three main statements. Well represented.

[@eric_andrews]

I'm happy this video cleared it up for you. Thanks for checking it out Tania

[@cuteHafeela]

Really appreciate your simple and informative video. God bless you

[@eric_andrews]

My pleasure Haji! Thanks

[@eloiseduplessis2487]

Eric, this is amazing. Thank you so much, so clear so easy to follow.

[@eric_andrews]

Glad it was helpful Eloise!

[@fredcucciniello1154]

Awesome video. Can you make a video where you take a large publicly traded multinational company, like Procter and Gamble or a tech company like Amazon and build the three statements starting from scratch just using their publicly disclosed earnings documents and include quarters and years? Haven’t seen anyone else out there do that because I know it’s a lot of work and would be a beast of a video but that would be an awesome real life application of these skills. Thanks so much

[@mikep3900]

I'd venmo him for this lol

[@eric_andrews]

Honestly I would really enjoy doing that but it would be an extremely long one. Let me think a little about how I would try to do it in 60 minutes or less.....really appreciate the suggestion I'm always trying to figure out what new content to make !! 😀😀

[@konstantinoskormpis8307]

Great Job Eric! Concise and clear explanation - Many thanks!!

[@eric_andrews]

My pleasure Konstantinos

[@muhammadsyafiqbinmohdmazri7055]

I love your excel & finance knowledge skills, you are awesome

[@gcorbalan]

Thank you Eric! I always had problem to tie out the Cash Flow Statement but it is now cleared for me, specifically on the operating activities. I am really enjoying your videos and content, right to the point! Greetings from Panama 🇵🇦!

[@eric_andrews]

Cheers Garry, great to hear it. I'll try to include this type of modeling in more of my videos. Saludos amigo! Tal vez un dia un video en español tambien!

[@agboolawasiu5776]

Great!!! this video is well explanatory and easy to comprehend. Thank you Eric for this video.

[@eric_andrews]

Agboola 🙏🙏👍 cheers

[@yonastesfaye3680]

Nice explanation, thank you very much!!

[@eric_andrews]

You are welcome!

[@irfanreloaded]

Superb explanation! You are a pro!

[@eric_andrews]

Glad it was helpful irfan!! I hope you are too now

[@christinafield7531]

I really liked how you laid this out and connected it all together. My only issue I had was you were very fast, showing how familiar you were with excel. For me pause and rewind we my new best friends. Thank you!😀

[@RonDavisceo]

I truly thank you, for this video I learned a lot.

[@eric_andrews]

You are very welcome, good luck

[@amritgurung3629]

Thank You so much, Mr. Eric!...... It was beneficial....

[@eric_andrews]

You're very welcome!

[@rafaelfurlan5103]

This is so good! Thank you so much man

[@nityabardhan5550]

Wonderful explanation. Helped a lot.

[@eric_andrews]

Glad it helped Nitya!

[@hbsaria]

This was really helpful Eric. Thanks and keep up the good work

[@Mad1080]

Excellent explanation... One more video preparing financial statements... if possible lets try with any company previous data... But super... Everything will be in brain... Only need to practice

[@eric_andrews]

Hey, I like that idea. I'll try to include that in one of my upcoming videos. Cheer Madhav

[@Mad1080]

@@eric_andrewsDo share the Video and file if you have worked. Thanks!!

[@piyushmisra1812]

Eric ! This is brilliant! You have no idea how much this helped me! I was doubting myself with my choice in career and if I could ever confidently say I know my basics well. Now I surely feel like I do! Thank you so much!!

[@eric_andrews]

you got this!

[@sachindabhade6160]

This is extremely useful... beautiful explanation and very lucid presentation of the ideas....great job!

[@satya_401]

Very useful and simple video. Thanks Eric!

[@eric_andrews]

My pleasure Satya, cheers!

[@carterfinance2376]

A good 2 hours was spend for me to recreate this but love the video❤️ new sub

[@eric_andrews]

You are a beast!!!! Nice work and hope you understand all this stuff really well now

[@carterfinance2376]

@@eric_andrews it’s a grind but KZbin helps... thanks

[@eric_andrews]

​@@carterfinance2376 it's a grind to learn, but once you know these concepts, you can use them over and over

[@wilfredokpere7054]

Eric, this is great, simplified, and cleared. you re a great teacher. thank you

[@eric_andrews]

Really happy it was valuable for you wilfred!

[@bennyforte2715]

Great job Eric, very useful! Thank you so much

[@agb7371]

I can't help it, just subscribed . WOW man

[@eric_andrews]

👊👊🔥

[@melvinsimbar7060]

This was a great 38mins of my life

[@sarfrazhussain7618]

Very useful and well presentation bro..

[@thanakornchow9876]

Thank you Eric! This video is very GOOD!!

[@yourstruly5DA]

Clearly explained, great stuff!!! Keep up the good work!!!

[@eric_andrews]

Hey Sanjoy appreciate that, will do !!

[@tenzindorji5494]

Thank You so much, I have learnt a lot

[@eric_andrews]

You are very welcome!

[@SyedHussain-cm5up]

Amazing content. Thank you for producing this. I have one request can you please provide an explanation on how to produce a monthly Balance Sheet and cashflow with formulas for the cash position based in debtors and creditors. Many thanks.

[@honkus8350]

Great video, thanks. One shortcut i recently learning is autosum: ALT =

[@eric_andrews]

Thanks Randy! Very helpful, I'll have to start using that one!!! Cheers

[@corneliusroy]

Nice one. Thanks for sharing.

[@ericcc70]

For assumptions on balance sheet, net revenue, why did you not use gross revenue from income statement?

[@mcjohnson31]

Yea i feel as if it should be gross revenue, discounts and refunds don't absolve the costs associated with producing the order, the company just didn't get paid for it