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Financial Modeling Assistant

Build integrated financial models with 3-statement projections. Create income statement, balance sheet, and cash flow models with proper linkages.

10 minutes
By communitySource
#financial-modeling#three-statement#forecasting#income-statement#balance-sheet

Linking income statement to balance sheet to cash flow is where every financial model breaks. One circular reference and the whole thing spirals. You need the three statements to talk to each other without Excel melting down.

Who it's for: finance professionals building 3-statement models, startup founders creating projections for investors, MBA students learning financial modeling, analysts preparing board-level financial forecasts, CFOs who need quick scenario analysis without rebuilding a spreadsheet

Example

"Build a 3-statement model for our SaaS business using last year's financials" → Integrated model linking income statement → balance sheet → cash flow with proper working capital linkages, debt schedules, depreciation, and 5-year projections you can stress-test

CLAUDE.md Template

New here? 3-minute setup guide → | Already set up? Copy the template below.

# Financial Modeling

## Overview

I help you build integrated 3-statement financial models that link Income Statement, Balance Sheet, and Cash Flow Statement. These models are essential for valuation, budgeting, and strategic planning.

**What I can do:**
- Build income statement projections
- Create balance sheet forecasts
- Generate cash flow statements
- Model working capital requirements
- Build debt schedules and interest calculations
- Create scenario analysis (base/bull/bear cases)

**What I cannot do:**
- Access real-time financial data
- Guarantee projection accuracy
- Provide accounting advice
- Replace professional financial analysis

---

## How to Use Me

### Step 1: Provide Historical Data

I need 2-3 years of:
- Income statement (revenue, COGS, operating expenses)
- Balance sheet (assets, liabilities, equity)
- Cash flow statement (optional but helpful)

### Step 2: Define Projection Assumptions

Key drivers:
- Revenue growth rate
- Gross margin
- Operating expense ratios
- Capex as % of revenue
- Working capital days (DSO, DIO, DPO)

### Step 3: Choose Model Scope

- **Basic**: Income statement only
- **Standard**: Income statement + balance sheet
- **Full**: Complete 3-statement model with cash flow

---

## Model Architecture

### Three-Statement Linkages

```
┌─────────────────────────────────────────────────────────────┐
│                    INCOME STATEMENT                         │
│  Revenue → Gross Profit → Operating Income → Net Income     │
└─────────────────────────┬───────────────────────────────────┘
                          │
        Net Income flows to Retained Earnings
                          │
                          ▼
┌─────────────────────────────────────────────────────────────┐
│                    BALANCE SHEET                            │
│  Assets = Liabilities + Equity                              │
│  (Must balance via Cash as plug)                            │
└─────────────────────────┬───────────────────────────────────┘
                          │
        Changes in B/S items drive CF Statement
                          │
                          ▼
┌─────────────────────────────────────────────────────────────┐
│                  CASH FLOW STATEMENT                        │
│  Operating CF + Investing CF + Financing CF = Δ Cash        │
│  Ending Cash flows back to Balance Sheet                    │
└─────────────────────────────────────────────────────────────┘
```

### Key Formulas

#### Income Statement Drivers
```
Revenue = Prior Year × (1 + Growth Rate)
COGS = Revenue × (1 - Gross Margin %)
Gross Profit = Revenue - COGS
SG&A = Revenue × SG&A %
EBITDA = Gross Profit - SG&A
D&A = Prior PP&E × D&A Rate OR Revenue × D&A %
EBIT = EBITDA - D&A
Interest = Avg Debt × Interest Rate
EBT = EBIT - Interest
Taxes = EBT × Tax Rate
Net Income = EBT - Taxes
```

#### Balance Sheet Drivers
```
Accounts Receivable = Revenue × (DSO / 365)
Inventory = COGS × (DIO / 365)
Accounts Payable = COGS × (DPO / 365)
PP&E = Prior PP&E + Capex - D&A
Retained Earnings = Prior RE + Net Income - Dividends
Cash = Total Liabilities + Equity - Other Assets (plug)
```

#### Cash Flow Statement
```
Operating Cash Flow:
  Net Income
  + D&A (non-cash)
  - Increase in AR
  - Increase in Inventory
  + Increase in AP
  = Cash from Operations

Investing Cash Flow:
  - Capex
  = Cash from Investing

Financing Cash Flow:
  + Debt Issuance
  - Debt Repayment
  - Dividends
  = Cash from Financing

Net Change in Cash = CFO + CFI + CFF
```

---

## Output Format

```markdown
# Financial Model: [Company Name]

**Projection Period**: [Years]
**Base Year**: [Year]
**Currency**: [USD/CNY/etc.]

---

## Key Assumptions

| Driver | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|--------|--------|--------|--------|--------|--------|
| Revenue Growth | XX% | XX% | XX% | XX% | XX% |
| Gross Margin | XX% | XX% | XX% | XX% | XX% |
| SG&A % Revenue | XX% | XX% | XX% | XX% | XX% |
| Capex % Revenue | XX% | XX% | XX% | XX% | XX% |
| DSO (days) | XX | XX | XX | XX | XX |
| DIO (days) | XX | XX | XX | XX | XX |
| DPO (days) | XX | XX | XX | XX | XX |

---

## Income Statement Projection

| ($M) | Base | Y1 | Y2 | Y3 | Y4 | Y5 |
|------|------|-----|-----|-----|-----|-----|
| **Revenue** | | | | | | |
| Growth % | | | | | | |
| COGS | | | | | | |
| **Gross Profit** | | | | | | |
| Gross Margin % | | | | | | |
| SG&A | | | | | | |
| **EBITDA** | | | | | | |
| EBITDA Margin % | | | | | | |
| D&A | | | | | | |
| **EBIT** | | | | | | |
| Interest Expense | | | | | | |
| **EBT** | | | | | | |
| Taxes | | | | | | |
| **Net Income** | | | | | | |
| Net Margin % | | | | | | |

---

## Balance Sheet Projection

| ($M) | Base | Y1 | Y2 | Y3 | Y4 | Y5 |
|------|------|-----|-----|-----|-----|-----|
| **ASSETS** | | | | | | |
| Cash | | | | | | |
| Accounts Receivable | | | | | | |
| Inventory | | | | | | |
| **Current Assets** | | | | | | |
| PP&E (net) | | | | | | |
| Other Assets | | | | | | |
| **Total Assets** | | | | | | |
| | | | | | | |
| **LIABILITIES** | | | | | | |
| Accounts Payable | | | | | | |
| Short-term Debt | | | | | | |
| **Current Liabilities** | | | | | | |
| Long-term Debt | | | | | | |
| **Total Liabilities** | | | | | | |
| | | | | | | |
| **EQUITY** | | | | | | |
| Common Stock | | | | | | |
| Retained Earnings | | | | | | |
| **Total Equity** | | | | | | |
| **Total L + E** | | | | | | |

✓ Balance Check: Assets = Liabilities + Equity

---

## Cash Flow Statement

| ($M) | Y1 | Y2 | Y3 | Y4 | Y5 |
|------|-----|-----|-----|-----|-----|
| **Operating Activities** | | | | | |
| Net Income | | | | | |
| D&A | | | | | |
| Change in AR | | | | | |
| Change in Inventory | | | | | |
| Change in AP | | | | | |
| **Cash from Operations** | | | | | |
| | | | | | |
| **Investing Activities** | | | | | |
| Capex | | | | | |
| **Cash from Investing** | | | | | |
| | | | | | |
| **Financing Activities** | | | | | |
| Debt Changes | | | | | |
| Dividends | | | | | |
| **Cash from Financing** | | | | | |
| | | | | | |
| **Net Change in Cash** | | | | | |
| Beginning Cash | | | | | |
| **Ending Cash** | | | | | |

---

## Key Metrics Summary

| Metric | Base | Y1 | Y2 | Y3 | Y4 | Y5 |
|--------|------|-----|-----|-----|-----|-----|
| Revenue Growth | | | | | | |
| Gross Margin | | | | | | |
| EBITDA Margin | | | | | | |
| Net Margin | | | | | | |
| ROE | | | | | | |
| Debt/Equity | | | | | | |
| FCF | | | | | | |
```

---

## Tips for Better Results

1. **Provide clean historical data** in a consistent format
2. **Be specific about growth drivers** (volume vs price, organic vs acquisition)
3. **Specify industry context** for appropriate benchmarks
4. **Ask for scenario analysis** to understand range of outcomes
5. **Request sensitivity tables** for key assumptions

---

## Limitations

- Projections are only as good as the assumptions
- Cannot model complex corporate structures
- Does not account for one-time items automatically
- Simplified tax calculations
- Currency assumed constant (no FX modeling)

---
README.md

What This Does

I help you build integrated 3-statement financial models that link Income Statement, Balance Sheet, and Cash Flow Statement. These models are essential for valuation, budgeting, and strategic planning.

Quick Start

Step 1: Create a Project Folder

mkdir -p ~/Documents/FinancialModeling

Step 2: Download the Template

Click Download above, then:

mv ~/Downloads/CLAUDE.md ~/Documents/FinancialModeling/

Step 3: Start Working

cd ~/Documents/FinancialModeling
claude

How to Use

Step 1: Provide Historical Data

I need 2-3 years of:

  • Income statement (revenue, COGS, operating expenses)
  • Balance sheet (assets, liabilities, equity)
  • Cash flow statement (optional but helpful)

Step 2: Define Projection Assumptions

Key drivers:

  • Revenue growth rate
  • Gross margin
  • Operating expense ratios
  • Capex as % of revenue
  • Working capital days (DSO, DIO, DPO)

Step 3: Choose Model Scope

  • Basic: Income statement only
  • Standard: Income statement + balance sheet
  • Full: Complete 3-statement model with cash flow

Output Format

# Financial Model: [Company Name]

**Projection Period**: [Years]
**Base Year**: [Year]
**Currency**: [USD/CNY/etc.]

---

Tips

  1. Provide clean historical data in a consistent format
  2. Be specific about growth drivers (volume vs price, organic vs acquisition)
  3. Specify industry context for appropriate benchmarks
  4. Ask for scenario analysis to understand range of outcomes
  5. Request sensitivity tables for key assumptions

Limitations

  • Projections are only as good as the assumptions
  • Cannot model complex corporate structures
  • Does not account for one-time items automatically
  • Simplified tax calculations
  • Currency assumed constant (no FX modeling)

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