Three Statements Financial Model

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The Three Statement Financial Model is one of the most basic setups for financial modeling. As the name indicates, this model basically follows the three financial statements (cash flow, income statement & balance sheet). The prime objective of Three Statement Model is to set up all the three statements connected, and a set of assumptions can drive changes in the entire model.  Three Statement Model assimilates cash flow statement, income statement and balance sheet into one dynamically connected financial model.

Layout and Structure

There are two common approaches a 3 statement model follows: a single worksheet or multiple worksheet models. Through both approaches are fine, most of the financial experts suggest using a single worksheet structure. Some of the prime reasons are below;

 Advantages of a single worksheet model are:

• Easier to play around with data and less headache of  switching between tabs

• Reduces risk of mislinking formulas (Since all time periods are in the same column)

• More structured with the use of grouping cells

• Allows more room for consolidating multi-business companies

Though this model is a very commonly used model among financial experts, it requires good understanding and expertise in Accounting, Finance along with good Excel skills as well.

Rajagiri Centre for Business Studies is located in heart of Cochin, Kakkanad. RCBS is one of the major Business School in Kerala. They provide pg courses like MBA, PGDM, MHRM etc. Best B Schools in Kerala offer International MBA in Kerala.


Location: Kerala, India

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