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Three Statement Modeling

Through the process of building a more complex three statement model, participants are taught how to model operating cash and calculate interest using average debt and average cash balances. The class will address in detail how to work with intentional circular references. The issue of non-intentional circular references is covered and participants are taught modeling rules that are designed to help avoid them. The session is designed to expose participants to different three statement modeling styles: multi-sheet, tower, and different income statement layouts. Exposure to a mix of modeling styles will help prepare them to work on in-house models or models they may inherit from other finance professionals.

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Description

Three statement modeling

Through the process of building a more complex three statement model, participants are taught how to model operating cash and calculate interest using average debt and average cash balances. The class will address in detail how to work with intentional circular references. The issue of non-intentional circular references is covered and participants are taught modeling rules that are designed to help avoid them. The session is designed to expose participants to different three statement modeling styles: multi-sheet, tower, and different income statement layouts. Exposure to a mix of modeling styles will help prepare them to work on in-house models or models they may inherit from other finance professionals.

Key topics:

  • Modeling operating cash, excess cash and the revolver
  • Calculating interest on cash and debt balances
  • Working with intentional circular references
  • Avoiding non-intentional circular references
  • Building models with different styles and layouts
  • Calculating ratios