Build a 3 Statement Financial Model (FULL Tutorial + Free Template)

Make a 3-statement financial model built from scratch in Excel. Full tutorial with free template!
📈 Take our Complete Finance & Valuation Course: www.careerprinciples.com/cour...
🆓 DOWNLOAD the Free Excel file for this video: careerprinciples.myflodesk.co...
In this video, you'll learn to make a 3 statement financial model from scratch. First, we'll have a set of assumptions to forecast our income statement. Then, we'll work on the fixed assets schedule to forecast depreciation. Third, we'll work on calculating the interest expense to finalize our income statement. Following the income statement, we'll work on the balance sheet forecast. We'll skip the cash and revolver line items for later in the video. Then, we'll calculate the cash flow statement and plug the ending cash balance back into the balance sheet. Finally, we'll set up a revolver (revolving credit facility) to make sure we don't run out of cash when having a negative forecast. We will also solve any circularity (circular reference) errors we might have in the process.
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Chapters:
0:00​ -​ 3 Statement Model Intro
0:28 - Forecasting the Income Statement
6:10​ - Fixed Assets Schedule
9:52​ - Interest Expense Forecast
10:53​ - Balance Sheet Assumptions & Forecast
20:40​ - Building the Cash Flow Statement
25:43 - Revolver (Revolving Credit Facility)
30:55 - Fixing Circular Reference Error
Disclaimer: I may receive a small commission on some of the links provided at no extra cost to you.

[@KenjiExplains]

📈 Take our Complete Finance & Valuation Course: www.careerprinciples.com/courses/finance-valuation-course

[@jyotibajaj3230]

Hey Kenji, your videos are very useful for me and the way you explain is too good. I like the way you teach ❤.

[@kylederrick5832]

Hi Kenji, thanks for this - - you used very specific items for the FC available for the revolver (and if extended other debt items) - - I'm wondering what am I trying to avoid in the CF Statement? Why couldn't I use net increase/decrease in cash?

[@camlex6310]

Really helpful!! The free template is great - cheers

[@jackcarr7383]

Great Video. I've learned alot from KZbin videos. Another way to test the Revolver calculations is to increase the CAPEX amount to force a negative cash balance. This method also keeps the Balance Sheet in balance.

[@KenjiExplains]

Great point!

[@b.r.srihari4099]

Another superb video!!

[@Itachix520]

Thank you very much kenji

[@surachetphunsawat4195]

I could make use of it. Thank You

[@mntungwamorojele2285]

Hi Kenji. That is an excellent video. Do you have one that is for a start-up and therefore does not have previous year's financials?

[@fernandoonorio2413]

LOVE IT KENJI! Just a quick question, How could you get negative cash?

[@xunit94]

This was fantastic! It would be great if you could do a DCF using real financials!

[@rareaqua7]

Fantastic video on the 3-statement model! I’m curious, have you considered including key financial metrics like Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO), and Days Payable Outstanding (DPO) for more accurate forecasting in your model? Also, would exploring net working capital in detail, provide a more comprehensive view of the Cash Flow statement? Thanks for offering such valuable content for free - I believe discussing these aspects could greatly enhance its educational impact. What are your thoughts?

[@KenjiExplains]

🆓 DOWNLOAD the Free Excel file for this video: careerprinciples.myflodesk.com/f64zoavpdx (check your browser/desktop download folder to find it after filling the form)

[@saqibsattar7799]

Thank you

[@antoniop.3586]

Simply awesome! Thank you very much!!

[@KenjiExplains]

Glad you like it!

[@honestballwatcher4700]

For Payables, Inventory and Receivables, I've seen cases where the value in the year below is added? Is this an IFRS vs GAAP difference?

[@zvmj]

Hello new subs here :)), I really enjoyed your videos and keep me catching up with excel tips. Can I request for HR Data Analyst video, I am an HR, during interview they always ask me about my Excel skills which I think pretty good but maybe I can enhance more. Thank you

[@ajraol9032]

Thanks for yet another informative video! Though sometimes the thought just crosses my mind that knowing all this may in the end not be of use if I’m not able to make it into IB 😂

[@crazyhagar]

Excellent video as always, Kenji - buying the Career Principles modelling course has been one of my best decisions! Question: similar to the balance sheet check (20:29), are there any other checks/formulas you’d build in for more complex models to make sure everything is flowing correctly? Would you also build in checks to highlight if debt or revolver drawdowns violate any covenants? (E.g., if a facility is overdrawn)

[@RohitThakur-en7qw]

Hey Kenji Rohit here from India Please do Make a detailed video on how to Analyse Financial Statements using Ratio analysis.

[@MaNiAcBLooD7s]

Hi Kenji great video! Quick question - if your interest expense = revolver interest rate * revolver ending balance, why does total interest expense include revolver interest rate * interest expense again? Shouldn't total interest expense just be = interest expense from revolving credit + interest on LT debt?

[@audreychan4988]

I have the same doubt on this

[@brendachepchirchir50]

I also think that as an error on his side. Hope he will clarify.

[@JusticeFinance]

Great video, however it seems at 30:18, you calculated interest expense incorrectly.

[@RohitThakur-en7qw]

Thank You So much Kenji 😊💯👏

[@KenjiExplains]

You're welcome 😊

[@KirksMagicVideos]

I believe you have an error calculating the final total interest expense in Row 130 at the 30'20" mark. You multiplied the Interest Exp by the Revolver Interest Rate a second time before adding the LT Debt interest expense. Let me know if I'm wrong :)

[@renemarquez4451]

Same question

[@ranno2264]

How do i find that capex calculation? I don't get it

[@willzinner8813]

thank you so much

[@KenjiExplains]

Thanks for watching :)

[@karlapittwinther4206]

What is 'VG' on mac? Trying to do the shortcut for removing gridlines on mac :D

[@KenjiExplains]

the alt key shortcuts dont exist on mac unfortunately

[@pastorjoe6751]

How can I learn the full course

[@nancybella7474]

Can you make in googlesheet?

[@user-hu8qq1zt8l]

30:18min - Why do you calculate the revolver interest rate with the interest expense of the revolver and then add the other interest expense?

[@Firmansyah-cr8wj]

this is exactly what I found too, wonder why your question hasn't been answered

[@dennisbehunick9776]

How does o e get free template

[@BennettCheer]

Kenji when you hit =sum how do you select the cells using just the keyboard - what is the shortcut - I'm trying the arrows and nothing is working

[@arronmazhari3389]

You can just use the arrow keys to go the the cell you want and you can implement the shift key to highlight multiple cells together when summing

[@mohitsingha1809]

In minute 30 you are once again multiplying revolvee interest rate by the interest already calculated. This looks like double counting? Please explain.

[@audreychan4988]

I have the same doubt on this

[@chiennm2011]

is the formula of Total Interest Expense wrong bro?

[@justinlozano4783]

Hi can someone shed light as to why the inclusion of a minus "-" sign is included on SG&A,COGS,TAXES thank you

[@KenjiExplains]

because theyre expenses so they affect the income statement negatively

[@alisoro983]

They are to be deducted anyway since they are expenses so to make it easier and faster, many advised to use the negative signs right away ( I hope it helps)

[@mashhourelbasha6632]

No attachments

[@KenjiExplains]

it's in the description as mentioned in the video: careerprinciples.myflodesk.com/f64zoavpdx

[@saqibsattar7799]

File is not downloading

[@KenjiExplains]

check your browser / desktop downloads folder