Here’s a quick walkthrough of how to read the Financial Results!
Here’s where you’ll find all of your Financial Results, meaning on the left hand side you’ll have your results by year (for the next five years), and on the right hand side you’ll find it broken down by month for the next five years (Monthly Forecasts):
Starting from the top, we’ve put a number of important metrics up here in absolute values, just so you can see how your business is doing at a glance, based on your most important KPIs and metrics:
These metrics may be different in your financial model depending on your industry and business model.
Q: Where do I populate my Actuals data?
The Actuals are integrated into the Financials sheet. So on the right hand side, under Monthly Forecasts, is where you’ll see lines right below the Forecast lines. This is where you can simply input the Actual values. The model will do 2 things:
- Turn those cells pink if below or green if above Forecast values
- Generate the Forecast vs. Actuals differences in the Dashboard
Q: How do I open up sections?
You can open up any sections like these by simply clicking the plus sign to expand, and the minus sign to collapse. You can do this for every line item that has a plus sign. This allows you to see the detailed breakdowns if and as needed.
Then coming to your first financial statement, which is your P&L:
So the way that this works is that this is like the summary view of your P&L. If you’d like to see the breakdown, you can simply click on the plus signs on the side. For example, you can reveal what your Forecast Revenue consists of:
Your Cashflow Statement works in the same way, with plus signs on the left that you can expand:
And your Balance Sheet too:
Lastly, there’s a built in company valuation for you called Valuation (DCF):
So the first thing to note, is that anything that’s written in white and blue, meaning it has a white background and blue font, you’re going to be able to change:
What you see here, is that the model automatically calculates your valuation according to the Discounted Cash Flow method, which is the most common valuation method for early stage startups. By simply setting your discount rate and your perpetual growth rate, it calculates your company valuation.
And here down in the section below, what you can do here is calculate your Investor Economics:
You can set in which year there will be investment, how much investors put into your business, how much percent of your dividends are distributed (as a percentage of profit), your revenue multiple, and your exit year. This then generates what the cash flow looks like for your investors by year for the next five years, and the investor’s IRR (Internal Rate of Return).
*Find our Step-By-Step Guide on Calculating Your Valuation here*
Tip: How should you determine your valuation and explain it to investors? Find the answer here.