This webinar on how to link the 3 financial statements in Excel is brought to you by the Corporate Finance Institute. In this webinar, we will perform a live demonstration of how to build a simple 3 statement model in Excel, which will form the basis for all other levels of financial modeling.
The main purpose of this webinar is to perform a live demonstration of how to link the 3 financial statements together in Excel. Using a simple example of a company with several years of historical data, we are able to build the forecast of a 3 statement model, including the income statement, balance sheet, and cash flow statement.
The agenda of this quarterly webinar is as follows:
Why do we link the 3 financial statements?
What is the best layout?
This webinar assumes you have a basic knowledge of the concepts covered in these free CFI courses:
Linking the 3 statements is the basic building block on which all other models are built. As the diagram below illustrates, more complete models, such as a DCF model, M&A model, scenario analysis, and sensitivity analysis are all dependent on the 3 statement foundation.
The best layout for your model may be a matter of personal preference. A standard layout is to have each of the statements on separate worksheets, however, this increases the risk of error when linking between sheets. A single worksheet or single tab model will be easier to work with and is a better foundation for more complex models such as M&A models or corporate operating models that consolidate multiple business units.
In order to build the model, we use an iterative approach, where we complete whatever sections of each of the financial statements we can, and then move to the next statement when we get stuck. The diagram below illustrates what this approach looks like.