Financial Modeling 101

Hey,

I'm currently interning at a VC and my "mentor" is planning on teaching me how to do financial models starting next week. She gave me a financial model of a real portfolio company to "study over the weekend". I looked at it and I'm SO confused. Can anyone give me some tips of where to start if I want to understand this monster? How is a model built? I see that the assumptions are input cells, but apart from that, every cell that I click on is linking to another cell. I just can't figure out where to start. Any input would be appreciated

Thanks!

6 Comments
 
Best Response

Assumptions are drivers for future projections made in the Income statement, Balance sheet, and cash flow statement. Go to the income statement and double click on one of the projections and see how it is derived, for example Sales is projected based on an assumed sales growth rate for each future year, last year revenue *(1+Growth rate). Accounts receivables and accrued expenses are also projected forward in the Working Capital schedule using the net sales growth rate for every future year and inventory is projected using the Cost of goods sold projected growth rate. if your unfamiliar with the terms above refer to Www.investopedia.com..

 
lmb1234Post it so we can take a look and then give you advice.

Ahh, don't do that.

This guy is trying to Jeffrey Chiang your career (before it's even started).

Regards

"The trouble with our liberal friends is not that they're ignorant, it's just that they know so much that isn't so." - Ronald Reagan
 
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