Build a Dynamic 3 Statement Financial Model From Scratch

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Build a Dynamic 3 Statement Financial Model From Scratch

Рет қаралды 1,050,770

2 жыл бұрын

Create a three statement model linking the income statement, balance sheet, and cash flow statement into a dynamic financial model used for valuation (discounted cash flows, M&A models, LBOs etc.) as well as financial analysis (scenario analysis, sensitivity analysis etc.)
📈 The Complete Finance & Valuation Course: www.careerprinciples.com/courses/finance-valuation-course
👉 Excel for Business & Finance Course: www.careerprinciples.com/courses/excel-for-business-finance
Find the FREE downloadable template of the 3 statement model below:
👉 DOWNLOAD the Excel file for this video: view.flodesk.com/pages/62061d94d328ec5152cefacf
This type of financial model is often used as the foundation for more complex models like a discounted cash flow (DCF). Here's the key steps in the process:
1. Firstly, we’ll organize and build our income statement using a set of assumptions
2. Next, we’ll create schedules to model out more complex line items like CapEx and Depreciation)
3. Following that, we’ll build out our balance sheet
4. Lastly build up the cash flow statement and link the 3 statements together
Along the way I'll explain the 3 financial statements and their key line items. I'll also explain the types of assumptions we'll be making to forecast figures for future years. Lastly, we'll learn some financial modelling best practices such as font colors, formulas, and custom formatting.
LEARN:
📈 The Complete Finance & Valuation Course: www.careerprinciples.com/courses/finance-valuation-course
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Chapters:
0:00 - Intro
1:00 - Formatting the Income Statement
3:01 - Building the Income Statement
11:06 - Fixed Assets Schedule
15:42 - Formatting the Balance Sheet
16:49 - Building the Balance Sheet
27:05 - Building the Cash Flow Statement
31:10 - Linking the 3 Statement Model
Disclaimer: I may receive a small commission on some of the links provided at no extra cost to you.

Пікірлер: 362

@KenjiExplains 2 жыл бұрын

📝 Our Complete Finance & Valuation Course: www.careerprinciples.com/courses/finance-valuation-course

@drinksdessertsdiaries4613 2 жыл бұрын

Very informative but I was lost by your voice and face. Nice voice and handsome.

@cfiexam1572 2 жыл бұрын

A KZfaq channel for the FMVA certificate. An exam will be uploaded for each module, in addition to 50 general exams for the certificate to train for the exam. kzfaq.info/love/NXXbI0wyijpmkr7PIoAFtg Certificate Explanation Channel kzfaq.info/sun/PLVU8ZFD--E7taLJe0PoEE9PGpmcPDDiW7

@nsengimanajd1088 2 жыл бұрын

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@prakveasna010 Жыл бұрын

how to download sir, i need your simple file excel , thank you sir

@thom6753 8 ай бұрын

Big lair

@sitio9208 Жыл бұрын

Hi Kenji Great video! I love how the simplicity you use to explain this! Very easy to learn!

@DecodaJ21 2 жыл бұрын

Thanks a million Kenji, I really appreciate this. These videos have really helped a ton. Keep up the great work!!!

@stephanienance5137 Жыл бұрын

This was really well done. My first attempt at connecting all three statements. Great teacher!

@MICT2022 2 жыл бұрын

I have learnt a lot from you. The model is simple and elaborate and resourceful for projections. Your work is great

@DharmendarKumar-go3ei 2 жыл бұрын

Clear and crisp information kenji no one were explained like you. Continue these type videos on excel. "sharing is caring"

@KenjiExplains 2 жыл бұрын

thanks will do!

@wrickeynelson9689 Жыл бұрын

Hi Kenji Am impressed by the very good presentation. It has helped me in a lot of my financial models in Excel.

@aliq4059 Жыл бұрын

One of the best instructors. Great work!

@damolaolayinka8477 2 жыл бұрын

This was extremely helpful Kenji, it was a great refressher. Thank You

@abubakarrk.conteh325 11 ай бұрын

I must say, this video really makes my work so easy now that i saw it. thanks a lot, you really add some in me from an accounting point of view.

@girishghadge8460 Жыл бұрын

Kenji Thanks really a crisp and precise explanation God bless you thanks again

@vedantrouth3530 11 ай бұрын

Pretty cool, easy, and intuitive stuff that I feared until I saw this video and implemented simultaneously. Thanks, Kenji!

@kaizenenterprise1397 2 жыл бұрын

Hi, Kenji! Thank you for a great content. It helps me A LOT. It's very hard for me to understand accounting kind of things, I got C in my class 🥲 But I can tell your content is very well-explained and easy to understand.

@ricardomantovaniassis 2 жыл бұрын

Dear Kenji, thanks for your explanation. Amazing! 👍👍

@izhamkamaruddin7868 Жыл бұрын

simple and easy to follow. Thank you for putting this video.

@adnanabbasi9482 Жыл бұрын

Very few videos amazed me. This is undoubtedly one of them.🌟🌟🌟🌟🌟🌟🌟

@anv.4614 2 жыл бұрын

Dear Kenji.Thank you so much for the great lesson.

@aleli1997 Жыл бұрын

Hi Kenji, Just wanted to say a big thank you for your fantastic videos. I have gained so much knowledge from them. As a holder of an MBA in Finance from a private school, I can vouch that your videos are of the highest quality for educational purposes. KZfaq is a great platform to learn new things with amazing educators like you. I have been refreshing my skills and knowledge with your videos, which are truly top-notch. As a Financial & Cost Analyst for a public S&P company, I can attest that one never stops learning. I'm now a new subscriber and will definitely recommend you to all my colleagues. Keep up the great work! Cheers!

@Bob_Ugee 4 ай бұрын

I LOVE THIS REVIEW

@altair769 Ай бұрын

This is my story as well. Thanks so much, Kenji!

@mrCetus 2 жыл бұрын

THANK YOU! So much for these series!! It's just amazing Kenji

@SohJunLin Жыл бұрын

Best tutorials out there! Keep it up Kenji

@aspectoflife 5 ай бұрын

the best, short and compact,thanks Kenji the great

@shardulnikam9322 2 жыл бұрын

I am helping my mom with an extremely small pickle business, just started a few months ago. Thank you so much for this video! This will help us massively.

@DaniHagebeukREAL Жыл бұрын

Still in business?

@user-vl9dd3mx7g 5 ай бұрын

Thank you very much Kenji! Much love and respect from Sweden

@mohamedh.ismail4760 Жыл бұрын

A very good video. I am ex multinational companies and what ur doing is simple and hence professional. Good job man

@martens9531 Жыл бұрын

Great video! Really helped me preparing for my recruitment process.

@nupurmahajan5396 2 жыл бұрын

Hi Kenji, any video with details on how to forecast items like revenue, capex, COGS etc.? Also i loved this video and made the financial model too

@user-vg5bz2cc9e 2 ай бұрын

THANKYOU SO MUCH FOR THE GOOD QUALITY OF VIDEO AND EXPLANATION !!!

@isaacbatterham9952 4 ай бұрын

Best I’ve seen. Can you make one where you just build it from absolute scratch; like what you’d expect in an interview

@cryto6274 11 ай бұрын

Really thorough video, thanks for the great content 👍

@estherarasi744 Жыл бұрын

I enjoyed every bit of the video. Thank you

@akhilnair4475 Жыл бұрын

For the first time in my life, I could match a Balance Sheet. I feel, I have conquered the Mount Everest. God Bless You, Brother!

@revanthraja2026 2 жыл бұрын

Hey Kenji, Thanks a lot for explaining the video in detail. It really helped me a lot ! Love from India

@agenew6451 7 ай бұрын

Thank you indeed kenji ! it really contribute a lot for me.

@robertoramirez4276 7 ай бұрын

This was an easy to follow video. Thanks

@shannongraham8048 2 жыл бұрын

Hi Kenji, thank you so much for walking us through your 3 way model. You template and explanation was so very helpful. I have a quick question regarding key drivers, how do you integrate these into the model? or do you normally leave this in another tab? Thank you!

@blessingpaul5484 10 ай бұрын

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@philipcollen482 10 ай бұрын

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@philipcollen482 10 ай бұрын

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@blessingpaul5484 10 ай бұрын

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@KatherineAnderson-lm8bw 10 ай бұрын

Thailand is really a nice comfy plan to retire. Working with a skilled financial planner can be compared to having a mentor in the field of finance. I used to struggle to invest on my own and ended up losing money, but things changed once I started working with *Nolan Velden Brent* . He played a pivotal role in helping me improve my financial situation. Previously, I relied solely on my job and salary for income, but now I have found ways to generate additional income with ease, which has allowed me to leave traditional employment. Nowadays, I believe that investing is not a choice, but a necessity for anyone who desires financial independence and a good quality of life.

@SolidHelion 2 жыл бұрын

Really good explanation without unnecessary info and complexity. I think you should include the net income when you calculate the Cashflow from Operations as it is obviously an "operational factor". Just my 2c. Keep up the good work!

@KenjiExplains 2 жыл бұрын

Thank you! And yes I agree not sure why I had it as a separate item there…luckily doesn’t affect the overall calculation

@KenjiExplains 9 ай бұрын

Check out this video for an updated version with a revolver so you can't run out of cash! kzfaq.info/get/bejne/Z7GmpbSAtrandH0.html

@InManIsGod Ай бұрын

Thank you so much. This is life-saving!

@elxenomorph534 2 жыл бұрын

Thank you for the work file sir. It was very useful..

@mohammadhammad7974 Жыл бұрын

Very informative and great video. Three comments: 1. the CFO is wrong; you should add the net income to it, 2. and the cash balance should never be minus! In this case, more short-term borrowing should be modeled. 3. the fully depreciated assets should be removed from the fixed assets, and accumulated depreciation balances

@GucciGeorg Жыл бұрын

You saved me a 2 am “pls fix“

@rishigupta2342 2 жыл бұрын

Very good explanation. Kindly make more such videos.

@shantanudeshpande2441 2 жыл бұрын

Great work Kenji👍

@Elbranto1 2 жыл бұрын

Loved this video, thank you.

@ronaldlongfellow87 11 ай бұрын

Thank you for the download excel sheets and the video

@abirbadawi01 5 ай бұрын

Kenji, amazing work, thank you

@lskknl10 Жыл бұрын

Purchased career principles. Thank you for the course. It is very clearly explained step by step easy to follow. with start and end excel files. It's better than big name ones. customer.

@KenjiExplains Жыл бұрын

Thank you for this comment :)

@santos5312 Жыл бұрын

Awesome thank you for this, now i can solve my base case for tomorrow´s interview :B

@markom001 2 жыл бұрын

Yess another Excel video, thank you Kenji! :) these help a lot!

@KenjiExplains 2 жыл бұрын

Happy to hear that!

@kevweokagbare3260 2 жыл бұрын

For the assumptions, when do you use Revenue versus Net Revenue? You used both throughout this example.

@mariomartinez4585 2 жыл бұрын

Thanks Kenji for the explanation

@donpablu 11 ай бұрын

damn man, this is amazing, thank you. subscribed

@erekosimainye1811 Жыл бұрын

Quite educative. Thank you

@oriolverdenyvilalta85 Жыл бұрын

Dear @KenjiExplains, Thanks for sharing this nice video on how to connect the three financial statements, it was nicely done! Concerning the Cash Flow Statement: shouldn’t the Operating Cash Flow (OCF) be = Net Income +/- all the adjustments (i.e., Operating Activities)? Why do you let Net Income outside the formula (29:22)? I would add Net Income in the OCF calculation and not in the final calculation to obtain the Net Cash Flow. The final value of Net Cash Flow would be the same in both cases. Nevertheless, by not adding Net Income to the OCF it gives the impression that OCF is smaller than it should be.

@SerdarArcoglu Жыл бұрын

This video is quite helpful for new starters. Thank you for sharing it, one comment: Cash balance shouls always be above zero. There might be one more control for it, negative cash balance shall be cured i) capital increase ii) borrowing or iii) asset sale iv) or NWC management.

@christiancoronado 2 жыл бұрын

Thank you Kenji, you always deliver great content

@KenjiExplains 2 жыл бұрын

I appreciate that!

@Flawed_and_Fabulous 11 ай бұрын

The video is awesome. cheers!!!

@leo2hari Жыл бұрын

I am really luckiest person to subscribe your channel Kenji....❤ from India🙏

@andriikameniar Жыл бұрын

Amazing video, very useful content. Liked + subscribed.

@Brigh578 9 ай бұрын

Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly

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@user-im7qe6ve4t 9 ай бұрын

that's impressive!, I could really use the expertise of this advisors , my portfolio has been down bad....who’s your financial advisor or coach, do you mind hooking me up?

@Brigh578 9 ай бұрын

The adviser I'm in touch with is *CAROLINA MELINA PHERSON* she works with Merrill, Pierce, Smith incorporated and interviewed on CNBC Television. You can use something else, for me she strategy works hence my result. She provides entry and exit point for the securities I focus on.

@user-im7qe6ve4t 9 ай бұрын

She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.

@shayanhussain4780 6 күн бұрын

Thanks for the Ctrl + pgup/dn shortcut.

@otienooliver9557 Жыл бұрын

Good job. Very clear

@Maximus18.6 Жыл бұрын

Thanks for you video, you are a genius

@MayurKamireddy Жыл бұрын

You are awesome Kenji

@HamzaAli-uo7my Жыл бұрын

one of the best videos ever

@rj0610 2 жыл бұрын

I like your models and really like your explanations. Great video Kenji!

@KenjiExplains 2 жыл бұрын

Glad you like them, thanks for watching Roland!

@henrykaibunga4442 2 жыл бұрын

This Guy is pure Gold...

@sinterialemain906 Жыл бұрын

Great, thank you Kenji

@michaelnicola1971 Жыл бұрын

Great Video! Thank you :)

@fifaskillsgaming4434 2 жыл бұрын

Thank you, Kenji for the great content that you provide us every week! Can you please make a video next time about assessment tests for job interviews and give us some tips? Thanks

@KenjiExplains 2 жыл бұрын

Thank you, I'll put the suggestion on my list!

@fatimatuibrahim3455 2 жыл бұрын

hello kenji, your video is exactly what I'm looking for, but I'm a beginner and you speak faster...

@seayorn 11 ай бұрын

Great work on the video. How do you anticipate if a cell changes e.g life value change if you lock different cells?

@nicholash566 2 жыл бұрын

Quick fix to this model in 2022 he estimates negative cash balance, obviously that cant happen or the company would go bankrupt, so an easy fix is to have a increase of capital (increasing common stock and cash by the same amount) so you don't go bankrupt. In the cash flow it would be a new row for capital raise or something along those lines. Great model!

@Oluwaseun_Olusanjo Жыл бұрын

Awesome Thanks Kenji

@Alphapowermind 3 ай бұрын

Thanks for the informative video

@solomonbhandari-young4154 2 жыл бұрын

Great info!

@lenol4936 11 ай бұрын

thanks a lot super helpful!

@oddsummusic9110 2 жыл бұрын

Fantastic work on this guys!

@abedhasan4155 2 жыл бұрын

nice presentation, thanks

@saratkong6649 Жыл бұрын

Amazing...! big thanks @Kenji

@anthonymurrell4667 8 ай бұрын

Thank you very much!🙏🏿

@jeanemmanuelgnanzou529 Жыл бұрын

Hello Kendji ! Very useful video. I've an issue about the computation of "Operating Cash Flow". Why did you not added the Net Income ?

@michaelquach7046 2 жыл бұрын

Thanks for the shoutout. Glad we’re able to help folks with these excel tutorials!

@KenjiExplains 2 жыл бұрын

Thanks again!

@irvindzimiri3267 10 ай бұрын

kenji you are the best my bro

@Richardndegwa Жыл бұрын

Thank you for this

@Malik-ix2kx 6 ай бұрын

Very helpful video

@richfrill 2 жыл бұрын

Thank you, I learned from you handsome man

@chahwahl.sakambwa6673 2 жыл бұрын

Kenji is an amazing financial specialist

@ahmedhussien1530 Жыл бұрын

very good and thanks a lot for you

@renzoresh Жыл бұрын

Thanks Kenji!

@yohannaagbanaji8012 2 жыл бұрын

What a beautiful video, pls I need video that I can learn how to design an spreadsheed for savings and contributions. Where I can save and retrieve recoreds of activities.

@ayootepola1748 2 жыл бұрын

Really enjoy watching your youtube videos. Thank you!

@KenjiExplains 2 жыл бұрын

Thanks for watching!

@surajsingh-ji5cw 2 жыл бұрын

you made my day

@SuperFarhan6 2 ай бұрын

Thank you! Kenji, it took me several videos to understand, but your clip was sufficient. Can you pls share the excel working file or perhaps completed file from this video. I downloaded the base file w/o data in it.

@maximilianbuske4510 11 ай бұрын

Just great!

@joviestera710 11 ай бұрын

Hi Kenji, Thanks for sharing this video about your " THREE STATEMENT MODEL" awesome report. I want to learn more about your model report and valuation. How could have an access to those other report related to Finance & Accounting model. Thank you!