Basic Financial Model
Embedded above is a basic working financial model for Sophie’s Bicycle Shop. You can download into Excel by clicking the link at the bottom of the embedded spreadsheet. For a typical modeling...
View ArticleBalance Sheet – Part 1
While the income statement is a tally of revenue and expenses over a period of time, a balance sheet is a snapshot of the current financial standing. Below is a sample balance sheet. It is part of a...
View ArticleHow to Balance Your Balance Sheet
One of the hardest parts of building a financial model is getting the balance sheet to balance, meaning the basic equation of Assets = Liabilities + Shareholder’s Equity is true. The balance sheet...
View ArticleCircular References in Financial Models
What is a circular reference? A circular reference is when a cell refers to itself directly or indirectly. Are circular references bad? In most cases, a circular reference should and can be avoided...
View ArticleDays Sales Outstanding, Days Payable Outstanding, and Days Sales Inventory
Days Sales Outstanding (DSO), Days Payable Outstanding (DPO), and Inventory Turns are some key metrics for company analysis. While they are just some simple calculations, they tell are story about how...
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Capital Expenditures and Depreciation
Capital Expenditures aka CapEx is the spending of money to buy or fix assets. CapEx is typically related to buildings, property, equipment. Many financial models are built to help determine growth and...
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