Three Statement Model

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Steps
A three statement model is a financial model that links the income
statement, balance sheet, and cash flow statement of a company. It
is a tool used to analyze a company's financial performance and
forecast its future financial position.

1.Input historical financial information: Start by entering the historical

financial data of the company into the platform. This includes
inputting data from income statements, balance sheets, and cash
flow statements.

2.Calculate ratios and statistics: These are calculated using the

historical data to help understand historical performance and
business drivers.

3.Define the assumptions that will drive the forecast: Determine the
key assumptions that will influence the forecast, such as revenue
growth, expense growth, and capital expenditure plans.

4.Predict the income statement: Based on the defined assumptions,

forecast the company's income statement for the next few years. This
includes predicting revenue, expenses, and profitability.

5.Predict capital investments and assets: Estimate the company's

capital investments and assets, such as property, plant, and
equipment. This information is essential for understanding the
company's capital structure and future growth potential.

6.Predict Cash Flows and financing activity: Forecast the company's

financing activities, including debt and equity financing. This will help
you understand the company's capital structure and its ability to fund
future growth.

7.Link the statements: Integrate the forecasted income statement,

balance sheet, and cash flow statement into one dynamically
connected financial model. This will allow you to analyze the
company's financial performance more comprehensively.
8.Format the model: Follow best practices for formatting the model,
such as color-coding inputs blue and formulas black. This will make
the model more transparent and easier to audit.
t Model
Non-input Fields
Input Fields

This sheet shows a mock up of a simplified TSM

TSM after inputing Historical Information is shown here

The ratios on historical data are calculated in this sheet

Add assumption in the text fields in the last part, and define them in numerical terms in the Driver and Ratios part for the

Add predicted growth rates based on information at hand

Input Rates based on planning and information available at hand

Adjust the Cash Flows based on company's future plans. Make adjustements for the cash balances in line with operations.

Check if the balance sheet tallies after Cash Flow Adjustements

Refer this sheet for formatting guide
 Drivers and Ratios FY 21 FY 22 FY 23 FY 24 FY 25

Income Calculations
Product Growth % 0.00% 0.00% 0.00% 0.00% 0.00%
Services Growth % 0.00% 0.00% 0.00% 0.00% 0.00%

Expense Calculations
Cost of Products % 0.00% 0.00% 0.00% 0.00% 0.00%
Cost of Services % 0.00% 0.00% 0.00% 0.00% 0.00%
Operating Expenses % 0.00% 0.00% 0.00% 0.00% 0.00%

Other PL Calculations
Tax Rates % 0.00% 0.00% 0.00% 0.00% 0.00%
Interest Rate on Debt % 0.00% 0.00% 0.00% 0.00% 0.00%

Assets Side Calculations

Accounts Rece. % revenue 0.00% 0.00% 0.00% 0.00% 0.00%
CapEx % Revenue 0.00% 0.00% 0.00% 0.00% 0.00%
D&A % Revenue 0.00% 0.00% 0.00% 0.00% 0.00%
Inventory % COGS 0.00% 0.00% 0.00% 0.00% 0.00%

Liability side Calculations

Accounts Payable % Total Costs 0.00% 0.00% 0.00% 0.00% 0.00%
Other Liabilities % Total Costs 0.00% 0.00% 0.00% 0.00% 0.00%
Debt % Equity 0.00% 0.00% 0.00% 0.00% 0.00%
Cash Turnover % 0.00% 0.00% 0.00% 0.00% 0.00%

Income Statement: FY 21 FY 22 FY 23 FY 24 FY 25

Products: - - - - -
Services: - - - - -
Total Revenue: - - - - -

Cost of Products: - - - - -
Cost of Services: - - - - -
Operating Expenses: - - - - -
Operating Income: - - - - -

Other Income / (Expense): - - - - -

Interest Income / (Expense): - - - - -
Pre-Tax Income: - - - - -

Income Taxes: - - - - -

Net Income: - - - - -

Balance Sheet: FY 21 FY 22 FY 23 FY 24 FY 25

ASSETS:
 Cash: - - - - -
Accounts Receivable: - - - - -
Inventory & Other: - - - - -
Net PP&E, Goodwill & Intangibles: - - - - -
Total Assets: - - - - -

LIABILITES & EQUITY:

Equity - - - - -
Reserves - - - - -
Total Equity: - - - - -

Accounts Payable: - - - - -
Total Debt: - - - - -
Other Liabilities: - - - - -
Total Liabilities: - - - - -

TOTAL LIABILITIES + EQUITY: - - - - -

Balance Check: - - - - -

Cash Flow Statement: FY 21 FY 22 FY 23 FY 24 FY 25

Cash Flow from Operations:
Net Income in cash: - - - - -
(+) D&A: - - - - -

Cash Flow from Operations: - - - - -

Cash Flow from Investing:

(-) CapEx: - - - - -

Cash Flow from Investing: - - - - -

Cash Flow from Financing:

(+/-) Change in Debt: - - - - -
(+/-) Settlement of Open Contracts: - - - - -
Cash Flow from Financing: - - - - -

Net Change in Cash: - - - - -

Assumptions:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
3y Avg 4y Avg

0.00% 0.00%
0.00% 0.00%

0.00% 0.00%
0.00% 0.00%
0.00% 0.00%

0.00% 0.00%
0.00% 0.00%

0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
0.00% 0.00%

0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
 Drivers and Ratios FY 21 FY 22 FY 23 FY 24 FY 25

Income Calculations
Product Growth % 9.26% 16.38% -7.80% 0.00% 0.00%
Services Growth % 18.00% -18.09% 125.97% 0.00% 0.00%

Expense Calculations
Cost of Products % 35.02% 28.79% 37.23% 0.00% 0.00%
Cost of Services % 11.06% 9.87% 8.97% 0.00% 0.00%
Operating Expenses % 14.38% 13.13% 13.96% 0.00% 0.00%

Other PL Calculations
Tax Rates % -31.32% -32.22% -33.22% 0.00% 0.00%
Interest Rate on Debt % 8.50% 8.50% 8.50% 0.00% 0.00%

Assets Side Calculations

Accounts Rece. % revenue 20.76% 19.92% 21.42% 0.00% 0.00%
CapEx % Revenue 1.09% 24.45% 12.84% 0.00% 0.00%
D&A % Revenue 0.11% 0.19% 0.44% 0.00% 0.00%
Inventory % COGS 34.14% 34.53% 34.70% 0.00% 0.00%

Liability side Calculations

Accounts Payable % Total Costs 19.95% 22.17% 20.81% 0.00% 0.00%
Other Liabilities % Total Costs 19.28% 18.92% 14.66% 0.00% 0.00%
Debt % Equity 38.72% 41.24% 34.41% 0.00% 0.00%
Cash Turnover % 12.31% 15.17% 16.18% 0.00% 0.00%

Fill in Historical data here

Income Statement: FY 21 FY 22 FY 23 FY 24 FY 25

Products: 13,250 15,421 14,218 14,218 14,218

Services: 470 385 870 870 870
Total Revenue: 13,720 15,806 15,088 15,088 15,088

Cost of Products: (4,640) (4,439) (5,293) - -

Cost of Services: (52) (38) (78) - -
Operating Expenses: (1,973) (2,076) (2,107) - -
Operating Income: 7,055 9,253 7,610 15,088 15,088

Other Income / (Expense): (39) (64) 22 (27) (27)

Interest Income / (Expense): 14 (122) (136) - -
Pre-Tax Income: 7,030 9,067 7,496 15,061 15,061

Income Taxes: (2,202) (2,921) (2,490) - -

Net Income: 4,828 6,146 5,006 15,061 15,061

Balance Sheet: FY 21 FY 22 FY 23 FY 24 FY 25
ASSETS:
Cash: 5,436 4,755 5,354 1,134 1,134
Accounts Receivable: 2,848 3,148 3,232 - -
Inventory & Other: 1,602 1,546 1,864 - -
Net PP&E, Goodwill & Intangibles: 2,982 6,816 8,687 8,687 8,687
Total Assets: 12,868 16,265 19,137 9,821 9,821

LIABILITES & EQUITY:

Equity 3,500 3,500 3,500 3,500 3,500
Reserves 3,891 6,109 8,765 23,826 38,887
Total Equity: 7,391 9,609 12,265 27,326 42,387

Accounts Payable: 1,330 1,453 1,556 - -

Total Debt: 2,862 3,963 4,220 - -
Other Liabilities: 1,285 1,240 1,096 - -
Total Liabilities: 5,477 6,656 6,872 - -

TOTAL LIABILITIES + EQUITY: 12,868 16,265 19,137 27,326 42,387

Balance Check: - - - (17,505) (32,566)

Cash Flow Statement: FY 21 FY 22 FY 23 FY 24 FY 25

Cash Flow from Operations:
Net Income in cash: 1,689 2,397 2,441 - -
(+) D&A: 15 30 66 - -
Cash Flow from Operations: 1,704 2,427 2,507 - -

Cash Flow from Investing:

(-) CapEx: (150) (3,864) (1,937) - -
Cash Flow from Investing: (150) (3,864) (1,937) - -

Cash Flow from Financing:

(+/-) Change in Debt: 250 1,101 257 (4,220) -
(+/-) Settlement of Open Contracts: (751) (345) (228) - -
Cash Flow from Financing: (501) 756 29 (4,220) -

Net Change in Cash: 1,053 (681) 599 (4,220) -

Assumptions:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
3y Avg 4y Avg

5.95% 4.46%
41.96% 31.47%

33.68% 25.26%
9.97% 7.47%
13.83% 10.37%

-32.25% -24.19%
8.50% 6.38%

20.70% 15.52%
12.79% 9.59%
0.25% 0.18%
34.46% 25.85%

20.98% 15.73%
17.62% 13.21%
38.12% 28.59%
14.55% 10.91%
 Assumptions:
1 Growth in Sales of products and services
2 Interest rate remains same
3 Tax Rates are same
4 It is planned to have more debt in the coming years
5 text-text-text-text
6 text-text-text-text
7 text-text-text-text
8 text-text-text-text
9 text-text-text-text
 Drivers and Ratios FY 21 FY 22 FY 23 FY 24 FY 25
Calculation of Key Drivers
Income Calculations
Product Growth % 9.26% 16.38% -7.80% 6.00% 8.00%
Services Growth % 18.00% -18.09% 125.97% 35.00% 40.00%

Expense Calculations
Cost of Products % 35.02% 28.79% 37.23% 32.00% 32.00%
Cost of Services % 11.06% 9.87% 8.97% 10.00% 11.00%
Operating Expenses % 14.38% 13.13% 13.96% 15.00% 18.00%

Other PL Calculations
Tax Rates % -31.32% -32.22% -33.22% -33.22% -33.22%
Interest Rate on Debt % 8.50% 8.50% 8.50% 8.50% 8.50%

Calculation of Key Ratios and Statistics

Assets Side Calculations
Accounts Rece. % revenue 20.76% 19.92% 21.42% 21.00% 25.00%
CapEx % Revenue 1.09% 24.45% 12.84% 13.00% 15.00%
D&A % Revenue 0.11% 0.19% 0.44% 0.35% 0.50%
Inventory % COGS 34.14% 34.53% 34.70% 40.00% 40.00%

Liability side Calculations

Accounts Payable % Total Costs 19.95% 22.17% 20.81% 22.00% 18.00%
Other Liabilities % Total Costs 19.28% 18.92% 14.66% 18.00% 19.00%
Debt % Equity 38.72% 41.24% 34.41% 40.00% 42.00%
Cash Turnover % 12.31% 15.17% 16.18% 17.00% 19.00%

Income Statement: FY 21 FY 22 FY 23 FY 24 FY 25

Products: 13,250 15,421 14,218 15,071 16,277

Services: 470 385 870 1,175 1,644
Total Revenue: 13,720 15,806 15,088 16,246 17,921

Cost of Products: (4,640) (4,439) (5,293) (4,823) (5,209)

Cost of Services: (52) (38) (78) (117) (181)
Operating Expenses: (1,973) (2,076) (2,107) (2,437) (3,226)
Operating Income: 7,055 9,253 7,610 8,869 9,306

Other Income / (Expense): (39) (64) 22 (27) (27)

Interest Income / (Expense): 14 (122) (136) 359 626
Pre-Tax Income: 7,030 9,067 7,496 9,200 9,905

Income Taxes: (2,202) (2,921) (2,490) (3,056) (3,290)

Net Income: 4,828 6,146 5,006 6,144 6,614

Balance Sheet: FY 21 FY 22 FY 23 FY 24 FY 25
 ASSETS:
Cash: 5,436 4,755 5,354 12,594 19,288
Accounts Receivable: 2,848 3,148 3,232 3,412 4,480
Inventory & Other: 1,602 1,546 1,864 1,976 2,156
Net PP&E, Goodwill & Intangibles: 2,982 6,816 8,687 10,742 12,797
Total Assets: 12,868 16,265 19,137 28,723 38,721

LIABILITES & EQUITY:

Equity 3,500 3,500 3,500 3,500 3,500
Reserves 3,891 6,109 8,765 14,909 21,523
Total Equity: 7,391 9,609 12,265 18,409 25,023

Accounts Payable: 1,330 1,453 1,556 1,623 1,551

Total Debt: 2,862 3,963 4,220 7,364 10,510
Other Liabilities: 1,285 1,240 1,096 1,328 1,637
Total Liabilities: 5,477 6,656 6,872 10,314 13,697

TOTAL LIABILITIES + EQUITY: 12,868 16,265 19,137 28,723 38,721

Balance Check: - - - - -

Cash Flow Statement: FY 21 FY 22 FY 23 FY 24 FY 25

Cash Flow from Operations:
Net Income in cash: 1,689 2,397 2,441 2,762 3,405
(+) D&A: 15 30 66 57 90
Cash Flow from Operations: 1,704 2,427 2,507 2,819 3,495

Cash Flow from Investing:

(-) CapEx: (150) (3,864) (1,937) (2,112) (2,688)
Cash Flow from Investing: (150) (3,864) (1,937) (2,112) (2,688)

Cash Flow from Financing:

(+/-) Change in Debt: 250 1,101 257 3,144 3,146
(+/-) Settlement of Open Contracts: (751) (345) (228) 3,389 2,741
Cash Flow from Financing: (501) 756 29 6,533 5,888

Net Change in Cash: 1,053 (681) 599 7,240 6,694

Assumptions:
1 Linear Growth in Sales
2 Interest rate remains same
3 Tax rates are on an increasing trend
4 It is planned to have more debt in the coming years
5
6
7
8
9
3y Avg 4y Avg

5.95% 5.96%
41.96% 40.22%

33.68% 33.26%
9.97% 9.97%
13.83% 14.12%

-32.25% -32.49%
8.50% 8.50%

20.70% 20.77%
12.79% 12.84%
0.25% 0.27%
34.46% 35.85%

20.98% 21.23%
17.62% 17.71%
38.12% 38.59%
14.55% 15.16%
 Drivers and Ratios FY 21 FY 22 FY 23 FY 24 FY 25
Calculation of Key Drivers
Income Calculations
Product Growth % 9.26% 16.38% -7.80% 6.00% 8.00%
Services Growth % 18.00% -18.09% 125.97% 35.00% 40.00%

Expense Calculations
Cost of Products % 35.02% 28.79% 37.23% 32.00% 32.00%
Cost of Services % 11.06% 9.87% 8.97% 10.00% 11.00%
Operating Expenses % 14.38% 13.13% 13.96% 15.00% 18.00%

Other PL Calculations
Tax Rates % -31.32% -32.22% -33.22% -33.22% -33.22%
Interest Rate on Debt % 8.50% 8.50% 8.50% 8.50% 8.50%

Calculation of Key Ratios and Statistics

Assets Side Calculations
Accounts Rece. % revenue 20.76% 19.92% 21.42% 21.00% 25.00%
CapEx % Revenue 1.09% 24.45% 12.84% 13.00% 15.00%
D&A % Revenue 0.11% 0.19% 0.44% 0.35% 0.50%
Inventory % COGS 34.14% 34.53% 34.70% 40.00% 40.00%

Liability side Calculations

Accounts Payable % Total Costs 19.95% 22.17% 20.81% 22.00% 18.00%
Other Liabilities % Total Costs 19.28% 18.92% 14.66% 18.00% 19.00%
Debt % Equity 38.72% 41.24% 34.41% 40.00% 42.00%
Cash Turnover % 12.31% 15.17% 16.18% 17.00% 19.00%

Income Statement: FY 21 FY 22 FY 23 FY 24 FY 25

Products: 13,250 15,421 14,218 15,071 16,277

Services: 470 385 870 1,175 1,644
Total Revenue: 13,720 15,806 15,088 16,246 17,921

Cost of Products: (4,640) (4,439) (5,293) (4,823) (5,209)

Cost of Services: (52) (38) (78) (117) (181)
Operating Expenses: (1,973) (2,076) (2,107) (2,437) (3,226)
Operating Income: 7,055 9,253 7,610 8,869 9,306

Other Income / (Expense): (39) (64) 22 (27) (27)

Interest Income / (Expense): 14 (122) (136) 359 626
Pre-Tax Income: 7,030 9,067 7,496 9,200 9,905

Income Taxes: (2,202) (2,921) (2,490) (3,056) (3,290)

Net Income: 4,828 6,146 5,006 6,144 6,614

Balance Sheet: FY 21 FY 22 FY 23 FY 24 FY 25
 ASSETS:
Cash: 5,436 4,755 5,354 12,594 19,288
Accounts Receivable: 2,848 3,148 3,232 3,412 4,480
Inventory & Other: 1,602 1,546 1,864 1,976 2,156
Net PP&E, Goodwill & Intangibles: 2,982 6,816 8,687 10,742 12,797
Total Assets: 12,868 16,265 19,137 28,723 38,721

LIABILITES & EQUITY:

Equity 3,500 3,500 3,500 3,500 3,500
Reserves 3,891 6,109 8,765 14,909 21,523
Total Equity: 7,391 9,609 12,265 18,409 25,023

Accounts Payable: 1,330 1,453 1,556 1,623 1,551

Total Debt: 2,862 3,963 4,220 7,364 10,510
Other Liabilities: 1,285 1,240 1,096 1,328 1,637
Total Liabilities: 5,477 6,656 6,872 10,314 13,697

TOTAL LIABILITIES + EQUITY: 12,868 16,265 19,137 28,723 38,721

Balance Check: - - - - -

Cash Flow Statement: FY 21 FY 22 FY 23 FY 24 FY 25

Cash Flow from Operations:
Net Income in cash: 1,689 2,397 2,441 2,762 3,405
(+) D&A: 15 30 66 57 90
Cash Flow from Operations: 1,704 2,427 2,507 2,819 3,495

Cash Flow from Investing:

(-) CapEx: (150) (3,864) (1,937) (2,112) (2,688)
Cash Flow from Investing: (150) (3,864) (1,937) (2,112) (2,688)

Cash Flow from Financing:

(+/-) Change in Debt: 250 1,101 257 3,144 3,146
(+/-) Settlement of Open Contracts: (751) (345) (228) 3,389 2,741
Cash Flow from Financing: (501) 756 29 6,533 5,888

Net Change in Cash: 1,053 (681) 599 7,240 6,694

Assumptions:
1 Linear Growth in Sales
2 Interest rate remains same
3 Tax rates are on an increasing trend
4 It is planned to have more debt in the coming years
5
6
7
8
9
3y Avg 4y Avg

5.95% 5.96%
41.96% 40.22%

33.68% 33.26%
9.97% 9.97%
13.83% 14.12%

-32.25% -32.49%
8.50% 8.50%

20.70% 20.77%
12.79% 12.84%
0.25% 0.27%
34.46% 35.85%

20.98% 21.23%
17.62% 17.71%
38.12% 38.59%
14.55% 15.16%
Unit Price Sensitivity 5% 10%
Revenue 2,500,000.00 2,500,000.00 2,500,000.00
Unit Price of Raw Material 25 26.25 27.5
Units of Raw Material 35,000.00 35,000.00 35,000.00
Cost Of Goods 875,000.00 918,750.00 962,500.00
Gross Profit 1,625,000.00 1,581,250.00 1,537,500.00
Fixed Costs 1,000,000.00 1,000,000.00 1,000,000.00
Net Profit 625,000.00 581,250.00 537,500.00
Change -43,750.00 -87,500.00
% -7.00% -14.00%

Interest Rate Base Point Sensitivity 5% 10%

Debt in Balance Sheet 2,500,000.00 2,500,000.00 2,500,000.00
Interest Rate 8.00% 8.05% 8.10%
Interest Cost 200,000.00 201,250.00 202,500.00
Cash Budgeted 200,000.00 200,000.00 200,000.00
Surplus/(Shortfall) - (1,250.00) (2,500.00)

Sensitivity Analysis Example:

Unit Selling Price 250.00

Units Sold 20,000.00
Varible to change Units Sold
Value of change 10.00%

Illustrative Income Statement:

Units Sold 22,000.00
Unit Selling Price 250.00
Sales 5,500,000.00
Unit Cost 112.50
Cost of goods sold 2,475,000.00
Gross Profit 3,025,000.00
Fixed Costs 1,500,000.00
Net Profit 1,525,000.00
Variation from Ideal 22.00%
 -5% -10%
2,500,000.00 2,500,000.00
23.75 22.5
35,000.00 35,000.00
831,250.00 787,500.00
1,668,750.00 1,712,500.00
1,000,000.00 1,000,000.00
668,750.00 712,500.00
43,750.00 87,500.00
7.00% 14.00%

-5% -10%
2,500,000.00 2,500,000.00
7.95% 7.90%
198,750.00 197,500.00
200,000.00 200,000.00
1,250.00 2,500.00