Year 3 · Applied Finance · Financial Modeling II
Financial Modeling II
Build a professional integrated three-statement model from historical financials through operating forecasts, working capital, capex, debt, cash flow, scenarios and model checks.
LEARNING OBJECTIVES
What you should be able to explain after this lesson
01
Design a clean model architecture separating inputs, calculations and outputs.
02
Link the income statement, balance sheet and cash-flow statement dynamically.
03
Forecast revenue, margins, working capital, capex and depreciation using business drivers.
04
Build debt, interest and cash schedules without breaking model integrity.
05
Handle circularity, minimum cash, revolver draws and debt repayment logic.
06
Create scenario and sensitivity analysis for key operating and financing assumptions.
07
Apply professional model checks, formatting and audit discipline.
CONCEPT MAPFrom raw financials to decision-ready integrated model
A strong model is easy to follow before it is sophisticated
CORE FACTS · SAME IN EVERY MODE
Inputs, calculations and outputs should be visually and logically separated.
Historical data should flow from source statements into forecast schedules with minimal hard-coding.
Each major line item should have a clear driver rather than an unexplained growth assumption.
Consistency in signs, dates, units and formula direction reduces model errors.
BeginnerTeaching style changes, knowledge does not.
A financial model is easier to trust when you can quickly see what was typed manually, what was calculated and what is being presented as an output.
PROFESSIONAL VOCABULARYHard-code / hard-code Model architecture / architecture du modèle One source of truth / source unique
Manually entered value rather than a linked or calculated value.
Organization of inputs, statements, schedules, calculations and outputs.
Using one controlled assumption or data point rather than duplicating it across the model.