I teach Finance Teams how to use ChatGPT - Keynote speaker on AI for Finance & FP&A

For AI Finance Trainings and Workshops:

✉️ Contact me here: hello@nicolasboucher.online

About me:

Number one Finance Thought Leader specialized in AI, trained more than 10,000 people and on a mission to help more than 1 million finance professionals.

3 million people are receiving daily my insights on AI for Finance across all social media channels.

I teach finance people how to use AI.

You can also book me as a keynote speaker.


My previous roles:

🏭 Thales (Germany):
2022-23: Senior manager controlling role for the Transportation business (€500 million business)
2018-22: Part of the management and led the Finance and Controlling team of a production site (400 people) specialised in producing Traveling Waves Tubes for Satellites
2016-2018: Head of Finance Transformation

👨‍💻 PwC:
2014-2016: Audit Manager in PwC Luxembourg
2012-2014: Audit Manager in PwC Singapore
2009-2012: Auditor in PwC Luxembourg


My experience:

Living in 5 different countries across 3 different continents (France, USA, Luxembourg, Singapore and Germany) gave me the capacity to integrate myself quickly and understand different local and working cultures.

Worked 8 years for Thales, an engineering and industrial french multinational.
I had finance manager roles and was part of the management of a 400 people production site.

Prior to that, I worked 7 years as an auditor and consultant for PwC in Luxembourg and Singapore.


My private life:

I am married and a happy father of two young daughters. We both learn from each other and we enjoy reading french books together and play outside.
When I am not busy with my daughters, I am exercising, cooking and spending quality time with friends.
Finally, traveling and tasting new food are some of my favorite experiences. But if you ask me where is the most beautiful place and where can we find the best food in the world, I have only one response: my hometown, Brittany in France.


My Specialties:

-Finance & accounting
-Controlling, budgeting & forecasts
-FP&A
-ChatGPT
-AI
-Storytelling
-Cross-cultural management, coaching and training
-Cost reduction
-Management
-Analytics, Business Performance and Activity Dashboard
-Audit & controls
-Business Processes Modelling
-Financial Statements and Cash Flow
-Business Intelligence
-Fluent in French (native speaker), English & German

Hashtags:
#finance #controlling #accounting #management #cfo #cash #budgeting #forecasting #chatgpt

https://nicolasboucher.online

Nicolas Boucher

Free AI for Finance Course
+ Bonus - Sign up for my free AI training event: https://lnkd.in/d2f2_GTE

👇 Save 1000s of dollars

Bookmark this and follow the curriculum below
+ TONS of FREE RESOURCES at the end!

You want to learn AI for Finance?
I have built and curated a free finance course for you

15 free lessons to make you more knowledgeable than 90% of the finance professionals in using AI

🙏 Help me spread this free course: like, share and comment!

Leverage AI to boost your career
and become irreplaceable

1. AI for Finance Fundamentals Email Course - https://lnkd.in/gFbWBDQ9

2. Prompting & Data-prep - https://lnkd.in/gtz7Bd78 & https://lnkd.in/gC8MqVG7

3. AI Roadmap for Finance team - https://lnkd.in/gK7svud4

4. Generative AI for managers - https://lnkd.in/g_EAYwv8 

5. ChatGPT vs Copilot vs Gemini - https://lnkd.in/gd-8ysiv

6. Top 100 ChatGPT Tips - https://lnkd.in/gX2sekmf

7. Top 100 AI Finance Tools - https://lnkd.in/gvKvkbvA

8. ChatGPT for Finance - https://lnkd.in/grBz2tGv

9. ChatGPT Image Generation for finance - https://lnkd.in/g55D5PtP

10. 30 Ways ChatGPT Helps Finance - https://lnkd.in/gwJ5CKXx

11. 28 Ways to use ChatGPT in Finance - https://lnkd.in/gV8FV82e

12. 6 AI Use Cases for Finance (real ones) - https://lnkd.in/g4wbFW7Q

13. 3 Ways to automate your work with AI - https://lnkd.in/gwUqv83G

14. Save 1 hr per day with ChatGPT - https://lnkd.in/gGdsC-Vr

15. The fast close playbook - https://lnkd.in/gniqwtju

- - -

🎓 Free Masterclass - How to Become an AI CFO

If you want to go beyond theory and actually
• Automate reporting, forecasting, and analysis without writing code
• Cut days of manual finance work down to minutes
• Save 20–40+ hours per month with AI workflows
• Adopt AI securely and stay ahead of fast-changing tools

👉 Register for the masterclass here: https://lnkd.in/d2f2_GTE

🔁 Repost if becoming an AI-powered CFO is on your roadmap

I teach Finance Teams how to use AI - Keynote speaker on AI for Finance (Email me if you need help)

Finance teams think they're using Copilot. They're not.
👉 Here's what they're missing: https://lnkd.in/dmZErhae

They've got the license
They assume it just works

They open it once a week, maybe twice, and call it "transformation"
Only uses a fraction of what it can do and don't even know it

The meetings still drag
The Excel models still eat hours
The insights still land a day too late

Here's the thing nobody wants to admit: the tool isn't the problem. The knowledge gap is.

Most finance professionals are using Copilot the way they used Google, typing in a question and hoping for the best

They don't know the shortcuts
They don't know the workflows
They don't know what it can actually do inside the apps they're already living in

So I built something to fix that.

Top 100 Copilot tips designed for real finance work, not a vendor demo

This isn't theory.

These are the prompts and workflows that CFOs, FP&A teams, and controllers are quietly using to get ahead while everyone else is still doing things the slow way

Here's what's actually in it:
1. Meetings & communication
• Summarize meetings in seconds
• Extract decisions, actions, and owners
• Catch up on Teams chats instantly

2. Excel & data
• Sanity-check files before sharing
• Build Pivot Tables with plain English
• Explain formulas, clean data, find outliers

3. PowerPoint & Word
• Turn raw docs into exec-ready decks
• Rewrite slides for clarity and impact
• Create presentations from a simple prompt

4. FP&A & analysis
• Reconcile numbers across files
• Run scenarios faster
• Produce decision-ready summaries

5. Advanced Copilot workflows
• Research with sources
• Build Copilot agents
• Automate recurring finance tasks

(See the complete list in the cheatsheet)

And if you want to go deeper…

We’re also hosting a live webinar
How to become an AI CFO,
- Automate reporting and forecasting without writing code
- Cut days of manual work down to minutes
- Adopt AI securely while staying ahead of 2026's fast-changing tools

Where I will also talk about Copilot as one of the fast-changing tools
(You can join in the masterclass below after getting your Top 100 Copilot tips copy)

👉 Download the 100 Copilot Tips cheat sheet here: https://lnkd.in/dmZErhae

(Save your seat for the masterclass, after downloading the 100 Copilot cheatsheet)

💬 What’s the first Copilot task you want to automate? Do you want to join my Live masterclass?

🔁 Repost if this helps your finance team work faster

I just mass-released 2 Claude resources for Finance.
Comment "CLAUDE" and I'll send them to you for free.

Companies pay me $10,000+ for workshops where I teach AI for Finance.

I've seen finance teams spend weeks trying to figure out Claude on their own.
Watching tutorials. Testing random prompts. Getting mediocre results.

No one gave them a structured way to use Claude for real finance work.

That's what this bundle is:
The exact playbook and cheat sheet I wish every finance team had from day one.

Here's what's inside:

📘 Claude Finance Playbook

→ How to use Claude in Excel to build financial models faster
→ How to use Claude Voice Mode to work on finance from your phone
→ How to create an interactive scenario planner for faster decision-making
→ Security, compliance, and quality control standards for finance teams
→ Step-by-step prompts you can copy and use today

📋 100 Claude Tips (cheat sheet)

→ 25 Claude in Excel tips (formulas, variance analysis, scenario modeling)
→ 25 Claude Cowork tips (batch automation, research synthesis, file management)
→ 25 Dashboard tips (KPI scorecards, board-ready P&Ls, interactive dashboards)
→ 25 best practices (CSI+FBI prompting, extended thinking, web search)

Why Claude specifically?

Most finance teams I train are using ChatGPT or Copilot.

But Claude is quietly becoming the tool of choice for serious financial analysis:
→ Cell-level citations in Excel
→ Projects that keep your context clean per client
→ Cowork mode for long-running automation tasks
→ Extended thinking for complex scenario planning

I built these resources because I kept getting the same question:
"Nicolas, how do I actually get started with Claude for Finance?"

Now you have the answer.

Comment "CLAUDE" below and I'll send you both resources.

🔁 Repost if your finance team needs to see this!

10 SALES KPIs
👉 Download for free my full PDF collection of the top 100 KPIs: https://lnkd.in/dWcVU-Uv

Here are my top KPIs for managing sales performance effectively:

1/ Sales Growth

Description: Measures the increase or decrease in sales over a specific period of time

Formula: (Current Sales - Previous Sales) / Previous Sales × 100


2/ Customer Acquisition Cost (CAC)

Description: Measures the cost of acquiring a new customer

Formula: Sales and Marketing Costs / Number of New Customers


3/ Customer Lifetime Value (CLV)

Description: Measures the expected revenue generated from a customer over their lifetime

Formula: Average Purchase Value × Number of Repeat Purchases × Average Customer Lifespan - CAC


4/ Sales Pipeline Coverage

Description: Measures the ratio between the value of potential sales in the pipeline and the sales target

Formula: Value of Sales Pipeline / Sales Target × 100


5/ Sales Conversion Rate

Description: Measures the percentage of leads or prospects that turn into paying customers

Formula: Number of Customers / Number of Leads × 100


6/ Average Order Value (AOV)

Description: Measures the average value of each order placed by a customer

Formula: Total Revenue / Number of Orders


7/ Customer retention rate

Description: Measures the percentage of existing customers who continue to purchase products or services over time

Formula: (Customers at the End of the Period - New Customers Acquired) / Number of Customers at the Start of the Period


8/ Net Sales

Description: Measures the total value of sales made, taking into account discounts, returns, and adjustments

Formula: Gross Sales - Returns - Discounts


9/ Sales per Employee

Description: Measures the amount of revenue generated per employee

Formula: Total Revenue / Number of Employees


10/ Sales Cycle Length

Description: Measures the average time it takes to close a deal from the initial contact with a lead

Formula: Number of Deals Closed/ Sum of the Time Taken to Close Each Deal​


Don't forget to get a copy of my Top 100 KPIs here: https://lnkd.in/dWcVU-Uv

👉 Which other KPIs would you add?

Top 100 Excel Tips
Download the PDF here: https://lnkd.in/g6fdfCBp

(Plus bonus AI in Finance masterclass, where I will teach you real AI in Finance use cases!
👉 Save your seat here: https://lnkd.in/dZEFWMzh)

The best Shortcuts, Formulas, Formatting & Advanced Tips

Bookmark this, and you'll save 1,000 hours!

If you think you know Excel well, I bet you will still learn something new in the Advanced table (items 76 to 100).

What do we cover?

A list of tips that all professionals need.

Here is a preview:

⌨️ Shortcuts

1. How to hide a column?
Ctrl + 0

2. How to hide a row?
Ctrl + 9

3. How to autosum adjacent cells?
Alt + =

4. How to start a new line in a cell?
Alt + Enter

5. How to insert a new worksheet?
Shift + F11

(get the answers 6-25 in the Cheat Sheet below)


🔢 Formulas

26. How to sum a range of cells?
=SUM(range)

27. How to find an average of numbers?
=AVERAGE(range)

28. How to find the maximum value in a range?
=MAX(range)

29. How to find the minimum value in a range?
=MIN(range)

30. How to link cells from different sheets?
='SheetName'!CellReference

(get the answers 31-50 in the Cheat Sheet below)


📊 Formatting

51. How to change cell color?
Home > Fill Color

52. How to apply bold text?
Home > Bold or Ctrl+B

53. How to insert a border around cells?
Home > Borders > All Borders

54. How to format a number as currency?
Home > Number Format > Currency

55. How to align text to the center of a cell?
Home > Alignment > Center

(get the answers 56-75 in the Cheat Sheet below)


⚡️ Advanced

76. How to remove duplicate rows?
Data > Remove Duplicates

77. How to create a data validation list?
Data > Data Validation > List

78. How to find outliers in a list?
Calculate the Z score of each cell =Z.TEST(array, x, [sigma])

79. How to look up data using INDEX and MATCH?
=INDEX(return_range, MATCH(lookup_value, lookup_range, 0))

80. How to create a named range?
Formulas > Name Manager > New Name

(get the answers 81-100 in the Cheat Sheet below)

Download here: https://lnkd.in/g6fdfCBp

- - -

🎓 Free Masterclass — How to Become an AI CFO

If you want to go beyond theory and actually
• Automate reporting, forecasting, and analysis without writing code
• Cut days of manual finance work down to minutes
• Save 20–40+ hours per month with AI workflows
• Adopt AI securely and stay ahead of fast-changing tools

This 1-hour-per-week framework is built for real finance teams

Tuesday, EST: 11am, UK: 4pm, CET: 5pm

👉 Register for the masterclass here: https://lnkd.in/dZEFWMzh

🔁 Repost if becoming an AI-powered CFO is on your roadmap

Crazy that almost nobody in finance is using Claude
👉 Download my PDF to be better than 99% of Claude users: https://lnkd.in/gsA7buv5

+ Bonus: AI in Finance masterclass, where I will teach you real AI in Finance use cases!
You will get the invite after downloading your PDF cheatsheet

I’ve trained over 10,000 finance pros
And a lot of them are missing a big opportunity not using Claude
So I’ve created for you a cheat sheet
So you can be better than 99% of Claude users starting now

Now you can even use Claude in Excel (I included my secret 25 tips)

And I decided to give you for free something that is worth hundreds of dollars

Most of Claude user that got the subscription
They open it, type a question, and expect magic

But they're missing 90% of what Claude can actually do for finance teams

The formulas it can write
The dashboards it can build
The reports it can generate
The workflows it can automate

So I built the definitive guide

100 Claude tips designed for real finance work

Here is a preview:

📊 Claude in Excel (Tips 1–25)

1. How to install Claude in Excel?
Install the add-in from Microsoft Marketplace (admin deploy via M365 Admin Center if needed)

2. How to get cell-level citations?
Ask "What does this cell/range do?" to get cell-level citations you can click to jump

3. How to create a formula from a description?
Ask "Build a formula that flags overdue invoices" → review → apply

(get tips 4-25 in the Cheat Sheet below)

📋 Dashboard (Tips 26–50)

26. How to set up your board structure?
Set your default dashboard structure (KPIs → drivers → risks → actions) in preferences

27. How to build an interactive dashboard?
Build an interactive dashboard (KPI cards + charts + filters) in an Artifact

28. How to create an executive dashboard?
Ask to "Create an executive dashboard summarizing all worksheets"

(get tips 29-50 in the Cheat Sheet below)

🖥️ Claude Cowork (Tips 51–75)

51. How to get started with Cowork?
Use Cowork inside the Claude Desktop app and switch to the Cowork "Tasks" tab

52. How to plan before executing?
Ask to "Show your plan and the exact files you'll touch, wait for my approval"

(get tips 53-75 in the Cheat Sheet below)

⚡ Tips & Best Practices (Tips 76–100)

76. How to pick the right model?
Use Opus for reasoning, Sonnet for speed/intelligence balance, Haiku for fastest iteration

77. How to structure prompts for finance?
Use the CSI+FBI framework: Context, Specific, Instruction + Format, Blueprint, Identity

(get tips 78-100 in the Cheat Sheet below)

👉 Register for the masterclass here after getting the Claude PDF: https://lnkd.in/gsA7buv5

💬 Which Claude feature surprised you the most? Drop it below

🔁 Repost to share this with your team

Really important note: while Claude is impressive within Excel and Cowork, if your company gives you a business license for Copilot and Gemini: start with these tools.
Do not use Claude with confidential data if you don’t have a business license.

The Finance Collection (how to get ahead of 90% in 2026)
👉 Comment "Finance Collection" and I will send it to you

Only the first 200 comments will get it for sure
Repost it to increase your chances of getting the collection

It includes my Top AI resources inside

This Finance collection can save you 100s of hours in 2026
And it is worth $1000+

Most people don’t need more finance theory
They need plug-and-play resources they can use today

So I bundled my best finance resources into one FREE pack:
Finance 101 Collection

Inside the collection, you will find:
#1 100 ChatGPT Tips (PDF)
#2 AI-Powered CFO (PDF)
#3 Month-End Checklist (Word)
#4 n8n Ultimate Cheatsheet (PDF)
#5 The Ultimate Finance Cheat Sheet (PDF)
#6 Top 100 Excel Tips (PDF)
#7 Break-Even Analysis Template (Excel)
#8 Budgeting Checklist (Word)
#9 Financial Statements Template (Excel)
#10 The 30 Day AI Finance Playbook (PDF)

I’ve seen CFOs and executives spend hours second-guessing numbers
they could’ve understood in 10 minutes with the right template

This is because no one gave them a simple starting point

That’s what this collection is:
The shortcuts I wish more people had earlier

👉 Comment "Finance Collection" if you want to receive the link to download this ebook.

♻️ Repost to help someone who’s tired of feeling behind on finance

CEO, CFO, or CFO?
Which one is more important?
👉 Join my next AI CFO masterclass now: https://lnkd.in/d7XXUNFZ

What are the differences in their roles?

Knowing what the management does is going to help you in your career.

Let's discover together what they do:

1. Their Main Leadership Roles
CEO leads the company
CFO manages finances
COO oversees the day-to-day operations.

2. On Strategic Vision
CEO drives strategy, growth, and innovation
CFO ensures stability and establishes discipline
COO implements the strategic initiatives

3. What Are Their Stakeholder Relations?
CEO represents the company to stakeholders and is the public face
CFO reports financials to the board and shareholders
COO liaises between different departments to ensure smooth execution

4. Their impact on Company's Values & Benchmarks
CEO sets corporate values
CFO sets financial benchmarks
COO ensures operational processes align with these values

5. Their Role in the Market Strategy
CEO drives global expansion
CFO optimizes existing markets
COO manages operational aspects of market penetration

6. What is their Client Focus?
CEO focuses on client acquisition
CFO focuses on client retention
COO enhances service delivery to facilitate both

7. Their Involvement with Risk Management
CEO sets the company's risk appetite,
CFO manages risk, and COO mitigates operational risks.

8. Their Relation to the Brand
CEO develops the brand
CFO tracks the performance
COO optimizes operational efficiency to uphold the brand promise

9. Their Role in Investments
CEO determines the investment strategy
CFO manages investment portfolios
COO allocates resources to meet strategic objectives.

10. Their Involvement in the Product Lifecycle
CEO drives product development
CFO monitors product profitability
COO coordinates product manufacturing and delivery

Here's how I build Excel models faster with Claude
👉 Register for my AI masterclass: https://lnkd.in/dt-EBfs7

Financial modeling is slow for 2 reasons
The math matters
And the tiny Excel mistakes add up

So I use Claude to speed up the build AND reduce the error rate
Without changing the way stakeholders want the output

3 ways I do it, depending on the situation

Method 1️⃣: Running Models Directly in Claude
Build the entire model within Claude’s code interface (Claude 3.5/4.5)

Best for fast, interactive model-building without manual coding

You can update churn rates or prices in the chat and see graphs update instantly

Prompt:
"I am the finance manager of a SaaS company.
I need to build a scenario planning for our sales for our products.
We have the personal plan at $49 per month with currently 1,500 subscribers and with a growth of 8% per month and a churn at 3%.
And enterprise: $99 per month with 400 subscribers and 5% growth with 2% churn.
Build this model for the next two years with formulas and dynamic assumptions and a graph."

Method 2️⃣: Python-Powered Excel Exports
This is the game-changer for offline work. Claude uses Python scripts to manufacture a polished .xlsx file from scratch

This isn't just a data dump; it’s a fully functional workbook with intact, dynamic formulas

Note: You must enable "Code execution and file creation" in your Claude settings

Prompt:
"I am the finance manager of a SaaS company. I need to build a scenario planning for our sales for our products. We have the personal plan at $49 per month with currently 1,500 subscribers and with a growth of 8% per month and a churn at 3%. And enterprise: $99 per month with 400 subscribers and 5% growth with 2% churn.
Build this model for the next two years with formulas and dynamic assumptions and a graph.
Build this in an Excel with formulas."

Method 3️⃣: The Claude for Excel Add-In
Anthropic's official sidebar plugin brings the AI assistant directly into your spreadsheet

Best for eliminating context switching. Claude acts as a co-pilot while you work

Pro Tip: It can read complex multi-tab workbooks and explain cell-level citations

Prompt:
"Build a 24-month financial model for the SaaS subscription plans described in this sheet."

If you want to go beyond and actually save 20–40+ hours per month
I am hosting a live session for real finance teams

- Automate reporting and forecasting without writing code
- Cut days of manual work down to minutes
- Adopt AI securely while staying ahead of 2026's fast-changing tools

👉 How to become an AI CFO Masterclass: https://lnkd.in/dt-EBfs7

🔁 Repost to help a finance peer who is tired of feeling behind on AI

Claude in Excel

You should not reconcile line by line in Excel.

I found a much faster (more accurate) way:

I've trained over 10,000 finance professionals on AI.

But still, month-end is taking too long.

• Variance commentary
• Journal corrections
• Flux analysis

12-hour days hoping you didn’t miss something before somebody asks.

So to help you get out of this painful cycle 

I’ve teamed up with Albert Malikov (Founder and CEO of Stacks)

Join us on Thursday 5th March for a free masterclass here - https://lnkd.in/dk-QJyP9

You will see:

The reconciliation hack
↳ that saves 2 hours / month

What happens when AI matches 95% of your transactions
↳ before you even open your laptop 

How to draft variance commentary
↳ in 5 minutes using AI

How to generate flux explanations
↳ for 20+ accounts in under 30 seconds

What auditors actually look for
↳ and how AI can help you get ahead of It

How to flag unusual journal entries in real time
↳ Instead of finding them three months later

📅 Thursday March 5th | 5PM CET | 60 minutes

I'll cover what you can do today with generic AI tools. Albert will show what happens when AI is plugged into your systems.

Reserve your seat here: https://lnkd.in/dk-QJyP9

Month-end shouldn't cost you your evenings, your holidays, or your happiness.

Look forward to seeing you there.

P.S - How long is your month-end right now?

Brand partnership • I teach Finance Teams how to use AI - Keynote speaker on AI for Finance (Email me if you need help)

I spent 3 days on board decks, now only 3 hours

Most finance leaders don’t lack presentation skills

They lack a board prep system

You don’t need better slides
You need a repeatable AI workflow

In this newsletter, I show you:

1) How to anticipate board questions before you enter the room
2) How to build a dashboard or deck in 10 minutes with AI
3) How to create a 5-minute post-meeting feedback loop

Board meetings aren’t stressful because of PowerPoint

They’re stressful because of unanswered questions

In partnership with Stacks, I’m breaking down how to close faster and walk into the boardroom fully prepared

👉 Register for the masterclass here:
https://lnkd.in/dxU27hjW

💬 Still spending days on board decks?

🔁 Repost if your team needs this

View newsletter: AI+Finance by Nicolas Boucher

Sponsored by Stacks If your month-end close still means late nights, manual reconciliations, and rewriting variance commentary - I have a special mast

Open article: I spent 3 days on board decks, now only 3 hours by Nicolas Boucher • 6 min read

I spent 3 days on board decks, now only 3 hours

I just finished preparing today's masterclass
5 hours tweaking slides and testing demos
Register for the masterclass here: https://lnkd.in/e8ut8seM

Why do I spend so much time preparing?

Because companies normally pay me $10,000 for this workshop
→ And today you'll get it free

Here is what I will teach you:

1. You don't need to be technical to build with AI
• I'll show you how to create dashboards faster than your BI team
• Live demo with a real framework our community uses

2. How to automate hours of work without new tools
• Data cleaning with AI in 2 minutes
• Excel AI Agent Mode in action
• Real use case: 1 full workday saved per month

3. Why every CFO role now requires AI skills
• AI mentions in CFO job listings are up 238% year-over-year (Datarails study on 6,000 job posts)
• What this means for your career and your salary

4. Your AI CFO Roadmap
• The 3 steps to implement AI for you and your team
• How to deal with data confidentiality

👉 Interested? Join us here: https://lnkd.in/e8ut8seM

No catch... just one limitation: seats are limited and we usually reach capacity fast

Why listen to me? I've trained 10,000+ finance pros and work with brands like Mercedes-Benz, KPMG, and Rakuten on AI in Finance

and I run the AI Finance Club, the #1 community for AI CFOs, which has 1,900+ CFOs, Fractional CFOs, and Finance pros!

👉 You can save your seat for the masterclass here: https://lnkd.in/drFcBhYe

See you in 2 hours!

👇50% off all Financial Modeling Courses this week only.

Theory is great until someone sends you 17 blurry PDFs and says "hey what's our business worth?"

This is the wake-up call that happens in the real world.

Businesses still need cash to operate, and they need profit if they eventually want to sell, but 9 times out of 10 the underlying data is a mess, and the "finance team" isn't sophisticated enough to build a forecast.

That's where YOU come in, right?  Just jump in and "stand up the model."

It's easy enough to understand on paper, but when you open that blank spreadsheet, suddenly, you can just freeze up.

Having spent over 15 years in Private Equity & FP&A, I know exactly how that feels.

When it's just you, some incomplete data, and AI isn't helping at all, how do you move forward?

That's where I can help -- I teach you to build (and own) the financial models that run real companies -- completely from scratch.

(𝘣𝘦𝘤𝘢𝘶𝘴𝘦 𝘵𝘩𝘢𝘵'𝘴 𝘵𝘩𝘦 𝘰𝘯𝘭𝘺 𝘸𝘢𝘺 𝘵𝘰 𝘳𝘦𝘢𝘭𝘭𝘺 𝘭𝘦𝘢𝘳𝘯, especially in an unstructured environment).

This is financial modeling in the real world.

🌐 𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗵𝗲𝗿𝗲 👉 https://www.financialmodelingeducation.com/ 


———

𝗥𝗲𝗰𝗼𝗴𝗻𝗶𝘁𝗶𝗼𝗻 𝗶𝗻 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁:

🏆 Trusted by over 91,000 students with 4.9/5.0 Star average rating

🏆 Over 100,000 followers on LinkedIn & other social media platforms

🏆 Recognized by Business Insider and Financial Modeling World Cup

🏆 Featured by Wharton Online, Wall Street Prep, & LinkedIn Learning


———

𝗥𝗲𝘃𝗶𝗲𝘄𝘀 𝗳𝗿𝗼𝗺 𝗽𝗿𝗼𝗴𝗿𝗮𝗺 𝗮𝗹𝘂𝗺𝘀:

"𝘛𝘳𝘢𝘪𝘯𝘪𝘯𝘨 𝘪𝘴 𝘧𝘢𝘯𝘵𝘢𝘴𝘵𝘪𝘤..."
⭐⭐⭐⭐⭐

"𝘉𝘦𝘴𝘵 𝘮𝘰𝘯𝘦𝘺 𝘦𝘷𝘦𝘳 𝘴𝘱𝘦𝘯𝘵..."
⭐⭐⭐⭐⭐

"𝘈𝘣𝘴𝘰𝘭𝘶𝘵𝘦 𝘨𝘢𝘮𝘦 𝘤𝘩𝘢𝘯𝘨𝘦𝘳..."
⭐⭐⭐⭐⭐

"𝘉𝘦𝘴𝘵 𝘤𝘰𝘶𝘳𝘴𝘦 𝘐'𝘷𝘦 𝘵𝘢𝘬𝘦𝘯 𝘰𝘯𝘭𝘪𝘯𝘦..."
⭐⭐⭐⭐⭐

"𝘔𝘰𝘴𝘵 𝘤𝘰𝘮𝘱𝘳𝘦𝘩𝘦𝘯𝘴𝘪𝘷𝘦 𝘤𝘰𝘶𝘳𝘴𝘦 𝘐'𝘷𝘦 𝘵𝘢𝘬𝘦𝘯..."
⭐⭐⭐⭐⭐

"𝘐 𝘩𝘢𝘷𝘦 𝘵𝘢𝘬𝘦𝘯 𝘴𝘦𝘷𝘦𝘳𝘢𝘭 𝘮𝘰𝘥𝘦𝘭𝘪𝘯𝘨 𝘤𝘰𝘶𝘳𝘴𝘦𝘴, 𝘵𝘩𝘪𝘴 𝘰𝘯𝘦 𝘪𝘴 𝘵𝘩𝘦 𝘣𝘦𝘴𝘵..."
⭐⭐⭐⭐⭐

🌐 𝗟𝗲𝗮𝗿𝗻 𝗺𝗼𝗿𝗲 𝗵𝗲𝗿𝗲 👉 https://www.financialmodelingeducation.com/

Chris Reilly

How I like to model scenarios without over-complicating the model.

(with template for you) 👇


~~~
📥 𝗧𝗟;𝗗𝗥: Grab the template 👉 https://lnkd.in/ez48VdTi 
~~~


𝗛𝗼𝘄 𝘁𝗼 𝘂𝘀𝗲 𝘁𝗵𝗲 𝘁𝗲𝗺𝗽𝗹𝗮𝘁𝗲:

𝗦𝗰𝗲𝗻𝗮𝗿𝗶𝗼 𝘀𝗲𝗹𝗲𝗰𝘁𝗶𝗼𝗻:

We're using the classic Base, Upside, and Downside scenarios here.

The scenarios can be selected in Column B using a drop-down list.

This allows you to build scenarios on a line-by-line basis.


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𝗖𝗵𝗮𝗻𝗴𝗶𝗻𝗴 𝘀𝗰𝗲𝗻𝗮𝗿𝗶𝗼 𝗶𝗻𝗽𝘂𝘁𝘀:

You can enter the assumptions for each case on the right side of the sheet.

(The are different sections for Base, Upside, and Downside).

The 𝗽𝘂𝗿𝗽𝗹𝗲 𝗳𝗼𝗿𝗺𝘂𝗹𝗮𝘀 saves this all from becoming a dumpster fire.

This formula checks the drop-down list in Column B.

Then, it pulls the corresponding assumption from one of the three cases.

~~~
💡𝗞𝗲𝘆 𝗣𝗼𝗶𝗻𝘁: Whatever is in purple is the "𝗟𝗜𝗩𝗘 𝗦𝗖𝗘𝗡𝗔𝗥𝗜𝗢."
~~~

Many modelers like to use the =CHOOSE function here.

But for this template, I used a simple IF statement.


⸻⸻⸻


𝗠𝗼𝘀𝘁 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗽𝗮𝗿𝘁: 𝗻𝗼𝘁 𝗺𝗲𝘀𝘀𝗶𝗻𝗴 𝘂𝗽 𝘆𝗼𝘂𝗿 𝗺𝗼𝗱𝗲𝗹

The live scenario "flows down" into the three statement model.

(On a different sheet that isn't included with the template.)

The outputs then 𝘭𝘪𝘯𝘬 𝘣𝘢𝘤𝘬 to my scenario one-pager.

This lets me quickly view the 𝘢𝘯𝘯𝘶𝘢𝘭 impact of my 𝘮𝘰𝘯𝘵𝘩𝘭𝘺 model.

𝗧𝗵𝗶𝘀 𝗺𝗮𝗸𝗲𝘀 𝘁𝗵𝗲 𝗲𝗻𝘁𝗶𝗿𝗲 𝘁𝗵𝗶𝗻𝗴 𝗲𝗮𝘀𝘆 𝘁𝗼 𝗺𝗮𝗻𝗮𝗴𝗲 𝗳𝗿𝗼𝗺 𝗼𝗻𝗲 𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻.

*𝗡𝗼𝘁𝗲 𝟭: Depreciation isn't affected here. I usually model Capex Spend separately, with its own scenarios, and let it flow to this page.

*𝗡𝗼𝘁𝗲 𝟮: I will often allow Debt and Interest Expense to adjust naturally with the other changes to the P&L.


⸻⸻⸻


𝗭𝗼𝗼𝗺𝗶𝗻𝗴 𝗼𝘂𝘁

Of course, scenarios become complex and need details that can't be captured here.

For example, changes in headcount or existing contracts probably can't be modeled at this level without creating a giant mess.

What we're looking at here are big picture changes to kick off a conversation.

(This is the "50,000 foot view" your boss mentioned earlier today).

After we choose a course with this "macro view," we can 𝘵𝘩𝘦𝘯 dive into the details and create something more specific.


⸻⸻⸻

Friendly reminder that...

𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗔𝗜 𝘄𝗼𝗻'𝘁 𝗵𝗲𝗹𝗽 𝘂𝗻𝗹𝗲𝘀𝘀 𝘆𝗼𝘂 𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝘁𝗵𝗲 𝗳𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝘀. 

🎓 Differentiate yourself here 👉 https://bit.ly/FMECourses

Private equity & FP&A veteran that teaches you to build the financial models that run real companies | 🎓 91,000+ students

So Claude has blown me away again.

Here's what it did this time 👇


I received a very thoughtful question from a student in my LBO course, asking for clarification between the total cash flow sweep formula, and the portion that was being swept to the revolver.

At first glance, they didn't understand why the figures were different.


⸻⸻⸻


I thought to myself, 𝘩𝘦𝘺 𝘺𝘢 𝘬𝘯𝘰𝘸 𝘸𝘩𝘢𝘵? 𝘓𝘦𝘵'𝘴 𝘨𝘪𝘷𝘦 𝘊𝘭𝘢𝘶𝘥𝘦 𝘢 𝘤𝘳𝘢𝘤𝘬 𝘢𝘵 𝘵𝘩𝘪𝘴...

I opened the model, clicked on Claude, copied the question, and asked it to audit the model and respond.

𝗜𝘁 𝗴𝗮𝘃𝗲 𝗺𝗲 𝗮 𝘁𝗵𝗼𝗿𝗼𝘂𝗴𝗵 𝗮𝗻𝗱 𝗰𝗼𝗿𝗿𝗲𝗰𝘁 𝗮𝗻𝘀𝘄𝗲𝗿 ✅.

(and this is a big a$$ LBO model)

Once again I'm like... 𝘋𝘈𝘔𝘕 — 𝘵𝘩𝘪𝘴 𝘵𝘩𝘪𝘯𝘨 𝘪𝘴 𝘨𝘰𝘰𝘥.

I reviewed it for accuracy, made some adjustments, and was able to respond.


⸻⸻⸻


Total time spent was probably the same.

But the 𝗾𝘂𝗮𝗹𝗶𝘁𝘆 of answer was probably 𝗯𝗲𝘁𝘁𝗲𝗿 than what I would have come up with on my own.

The walkthrough was succint and provided ample detail to drive the point home.


⸻⸻⸻


This whole thing is starting to feel palatable to me:

As a subject-matter expert, I'm able to use AI to:

   - provide a better experience for my students
   - validate my own learning
   - double-check my work

I'm excited to see what will pop next.


⸻⸻⸻


Still just have to say it.

Modeling with Claude is awesome because I know what I'm doing.

That comes from years of building models the hard way.

Fundamentals first, AI second.

I can teach you the building blocks here 👉 https://bit.ly/FMECourses

Even if you're "good," sometimes it's hard to remember all the pieces of a model.

You can use this checklist as a guideline (↓📥)


~~~
📥 𝗧𝗟;𝗗𝗥: grab the checklist 👉 https://lnkd.in/eVTU67fY 
~~~


🔎 𝗕𝗜𝗚 𝗣𝗜𝗖𝗧𝗨𝗥𝗘

Anytime I build a model I like to map out two things:

1. The data request list (what I'll need from the client), and;
2. The model structure

This checklist is my starting point for both, broken down as follows:


⸻⸻⸻


📂 𝗥𝗔𝗪 𝗗𝗔𝗧𝗔

Typically direct exports from an accounting system.

Call me old school, but I still prefer to copy/paste CSVs into the model so that everything is self-contained.

(or, I'll use PowerQuery to pull CSVs in automatically)


⸻⸻⸻


🧮 𝗦𝗨𝗣𝗣𝗢𝗥𝗧 𝗖𝗔𝗟𝗖𝗨𝗟𝗔𝗧𝗜𝗢𝗡𝗦

Detailed schedules to forecast the "biggest movers" of the business:

   - Revenue
   - Headcount
   - Material OpEx items, etc.


⸻⸻⸻


📊 𝗖𝗢𝗡𝗦𝗢𝗟𝗜𝗗𝗔𝗧𝗜𝗢𝗡

Raw Data and Support Calculations "roll up" here into the Three Statement Model consolidation.


⸻⸻⸻


📄 𝗢𝗨𝗧𝗣𝗨𝗧𝗦

As the name implies → print-friendly outputs that are linked from other places in the model, typically the Consolidation.

You 𝗱𝗼𝗻'𝘁 model here or have them link anywhere else.

They are outputs, should be automated, and left alone.

𝗧𝗵𝗶𝘀 𝗶𝘀 𝗮 𝗴𝗿𝗲𝗮𝘁 𝗽𝗹𝗮𝗰𝗲 𝘁𝗼 𝘂𝘀𝗲 𝗔𝗜.


⸻⸻⸻


⚙️ 𝗔𝗦𝗦𝗨𝗠𝗣𝗧𝗜𝗢𝗡𝗦

A place to enter most of the forecast assumptions.

Some people live and die by the "Assumption Page," but I usually go against best practices here and put my assumptions inside the Support Schedules and Consolidations themselves.

I do this because I like to see the numbers change as I change the assumption.

However, I will do my best to link everything back to an Assumptions page so it's printable and sitting in one place.


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🚨 𝗘𝗥𝗥𝗢𝗥 𝗖𝗛𝗘𝗖𝗞𝗜𝗡𝗚

Despite our best efforts, nearly 90% of spreadsheets contain errors (Google it).

This is the place in the model where I do my best to capture anything that might go wrong so I'm notified immediately.

In my opinion, this is the most important sheet in the entire file, should be reviewed constantly, and is always the last thing you check before you close (and send) the file.

𝗔𝗻𝗼𝘁𝗵𝗲𝗿 𝗔𝗜 𝘂𝘀𝗲 𝗰𝗮𝘀𝗲: ask it to check for errors.  It 𝘸𝘰𝘯'𝘵 be perfect.  The final work product is still on you, but using AI is a good start.


⸻⸻⸻


🔽 𝗜𝗡 𝗦𝗨𝗠𝗠𝗔𝗥𝗬

   ↓ Raw Data
   ↓ Support Calculations
   ↓ Consolidation
   ↓ Outputs
   ↓ Assumptions
   ↓ Error Checking


⸻⸻⸻


𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗔𝗜 𝘄𝗼𝗻'𝘁 𝗵𝗲𝗹𝗽 𝘂𝗻𝗹𝗲𝘀𝘀 𝘆𝗼𝘂 𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝘁𝗵𝗲 𝗳𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝘀.

🎓 Master the judgement AI can't replace 👉 https://bit.ly/FMECourses

How to make this 𝘄𝗼𝗿𝗸𝗶𝗻𝗴 𝗰𝗮𝗽𝗶𝘁𝗮𝗹 𝗰𝗵𝗮𝗿𝘁 (helpful to know 𝘩𝘰𝘸 before you ask AI to do it, in case you need to fix something) 👇


🎓 𝗡𝗲𝘁 𝗪𝗼𝗿𝗸𝗶𝗻𝗴 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝟭𝟬𝟭

NWC = Current Assets - Current Liabilities

Purpose is to see if a company has enough current assets to cover its short-term liabilities, which suggests good financial health.

~~~
📥 𝗕𝘁𝘄: This balance sheet guide can help 👉 https://lnkd.in/ew4nwaVx 
~~~


⸻⸻⸻


👀 𝗦𝗵𝗼𝘄 𝗠𝗲

It's helpful to see it visually for a couple reasons:

   ‣ 1. To identify any trends.

   ‣ 2. To identify any outliers.

   ‣ 3. To see how much "cushion" there is.

That's the purpose of the graph below.

   ‣ Current Assets stack above zero.

   ‣ Current Liabilities stack below zero.

And the 𝗱𝗼𝘁𝘁𝗲𝗱 𝗹𝗶𝗻𝗲 𝗿𝗲𝗽𝗿𝗲𝘀𝗲𝗻𝘁𝘀 𝘁𝗵𝗲 𝗡𝗲𝘁 𝗪𝗼𝗿𝗸𝗶𝗻𝗴 𝗖𝗮𝗽𝗶𝘁𝗮𝗹.

In this example I've included a data table below the graph, as it's helpful to see the numbers in a table alongside an image.


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⚙️ 𝗛𝗼𝘄 𝗧𝗼 𝗠𝗮𝗸𝗲 𝗜𝘁

(yes, still helpful even in the age of AI in case you want to modify things)

As modelers, this is a great chart to add to your monthly reporting pack.

Steps:

   ‣ 1. Start a new section called "Charts"

   ‣ 2. Include the dates along the top

   ‣ 3. Make your Current Assets positive

   ‣ 4. Make your Current Liabilities negative

   ‣ 5. Sum the Net Working Capital at the bottom

   ‣ 6. Create a Stacked Bar Chart

   ‣ 7. Change the chart type for the Net Working Capital figure only to Line Chart

        (leave the rest at Stacked Bar Chart)

   ‣ 8. You can customize and adjust from there


⸻⸻⸻


💬 𝗪𝗵𝗮𝘁 𝗜𝘁 𝗧𝗲𝗹𝗹𝘀 𝗠𝗲

In this example, we have a company that comfortably covers its Current Liabilities with its balance of Current Assets, and doesn't have much seasonality.

𝗕𝗼𝗻𝘂𝘀: can easily be forwarded to your team in a layout they can understand.


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⚠️ 𝗪𝗮𝘁𝗰𝗵 𝗢𝘂𝘁 𝗙𝗼𝗿

Sometimes calculations take on a life of their own, and you can accidentally create misleading representations of your working capital balances.

Those one-offs would stand out immediately on a graph like this.

You can investigate (and fix) from there.

Lastly, assets might be tied up in AR or longer-term projects (which aren't immediately liquid), and this can skew the perceived health of the NWC as well.

So often times it's helpful to include a second layer of detail (like an aging schedule) to get a more complete picture.


⸻⸻⸻


💡 𝗛𝗼𝘄 𝗜 𝗰𝗮𝗻 𝗵𝗲𝗹𝗽:

Working capital is "core stuff" in three statement modeling.

If you're not quite sure how to build it correctly, I can walk you through it.

↳ https://bit.ly/FMECourses

When perfect accuracy isn't always helpful...

How I model Revolvers differently 👇


🏫 𝗥𝗲𝘃𝗼𝗹𝘃𝗲𝗿 𝟭𝟬𝟭

A "Revolver" is just a fancy term for "giant credit card."

If the business doesn't have enough cash, I "draw" on the Revolver.

(↑ this just means I borrow from it, like your credit card)

If the business has too much cash, I will (usually) pay down the Revolver.

(↑ often called a "sweep", the same as paying down your credit card)

~~~
✨ 𝗥𝗲𝘀𝗼𝘂𝗿𝗰𝗲: Model-building Checklist 👉 https://lnkd.in/eVTU67fY 
~~~


⸻⸻⸻


📦 𝗘𝘅𝗰𝗲𝗲𝗱𝗶𝗻𝗴 𝗖𝗮𝗽𝗮𝗰𝗶𝘁𝘆

Just like you have a credit limit, the Revolver has a "capacity,"

meaning you can't borrow more than [$X].

In the picture below it happens to be $10mm (you can see it in the middle).

Now, if I wanted to be perfectly accurate, then...

If I exceed Revolver Capacity, then 𝘵𝘦𝘤𝘩𝘯𝘪𝘤𝘢𝘭𝘭𝘺 the cash in the business should go negative.

But -- this is where we can draw a line in the sand and remember:

𝗧𝗵𝗲 𝗺𝗼𝗱𝗲𝗹 𝗶𝘀 𝗮𝗻 𝗮𝗯𝘀𝘁𝗿𝗮𝗰𝘁 𝗿𝗲𝗽𝗿𝗲𝘀𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝘁𝗵𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝘁𝗼 𝗵𝗲𝗹𝗽 𝘂𝘀 𝗺𝗮𝗸𝗲 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀.

(↑ and NOT the business itself)


⸻⸻⸻


✔️ 𝗧𝗵𝗲 "𝗕𝗿𝗼𝗸𝗲𝗻" 𝗦𝗼𝗹𝘂𝘁𝗶𝗼𝗻

Now contrarily,

If I just "let the model run" and allow the Revolver to "draw" (borrow) whatever it needs to,

it helps me communicate something to my team:

✓ I can say, "based on our expected operations this year, I think we will exceed capacity on our Revolver and need to:

   (1) Work on a reforecast
   (2) Ask for a larger Revolver, or
   (3) Both

✓ In addition, 𝘐 𝘬𝘯𝘰𝘸 𝘦𝘹𝘢𝘤𝘵𝘭𝘺 𝘩𝘰𝘸 𝘮𝘶𝘤𝘩 𝘸𝘦'𝘭𝘭 𝘯𝘦𝘦𝘥 because my model tells me.

(↑ I'll round up just a little for room)


⸻⸻⸻


🗨️ 𝗔 𝗖𝗹𝗲𝗮𝗻𝗲𝗿 𝗖𝗵𝗮𝘁

It's a much cleaner conversation than:

Me: "Looks like cash is going negative."

Boss: "Why?"

Me: "I'll check the model. Okay looks like Revolver exceeds capacity."

Boss: "How much are we over?"

Me: "The Revolver capacity plus the negative cash amount."

Boss: "So what do we need?"

Etc., etc., etc...

See what I'm saying?

Making the model perfectly accurate actually slows me down in this instance and creates confusion.

Whereas, if I build checks/indicators around major business issues, it allows the model to provide insight and help us make decisions as a team.


⸻⸻⸻


✅ 𝗧𝗿𝘂𝗲 𝗣𝘂𝗿𝗽𝗼𝘀𝗲

✓ That's the point of the model: just accurate enough that I have some runway to make a decision on what to do next.

I get no prize or bonus points for it being pretty or perfect.

But, I guarantee you we've created value if the model starts a strategic conversation with our lender and we come to terms on a larger Revolver.


⸻⸻⸻

𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗔𝗜 𝗵𝗮𝘀 𝗯𝗲𝗲𝗻 𝗿𝗲𝗮𝗹𝗹𝘆 𝗰𝗼𝗼𝗹.

It helps me b/c I spent 15+ years building from scratch.

So I know what's good and what's not.

I can teach you the fundamentals here 👉 https://bit.ly/FMECourses

I thought AI would make this obsolete but I was wrong.

The most common Excel shortcuts I use when modeling 👇


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📥 𝗧𝗟;𝗗𝗥: Download here 👉 https://lnkd.in/e7DJFDxt 
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𝗦𝘁𝗶𝗹𝗹 𝗴𝗼𝘁 𝗶𝘁!

This is pretty much it: the 80/20 of all shortcuts I use in Excel.

These have been tried & true for years.

𝗣𝗿𝗼 𝘁𝗶𝗽: add your most used ones to the quick access tool bar.

Example, I use Paste/Special most often.

So, instead of typing "alt + e + s", I added it to my Quick Access Toolbar and just type "alt + 1" instead.

(sounds pointless, but actually lot of time saved).


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𝗪𝗵𝘆 𝗔𝗜 𝗵𝗮𝘀𝗻'𝘁 𝗿𝗲𝗽𝗹𝗮𝗰𝗲𝗱 𝘁𝗵𝗶𝘀 (𝙮𝙚𝙩):

Shortcut keys are fast AF.

So when you know exactly what you need, it's 𝘮𝘶𝘤𝘩 𝘧𝘢𝘴𝘵𝘦𝘳 building the model using memorized shortcuts than it is to:

   - think of the prompt
   - write the prompt
   - wait for the AI
   - audit & understand the output
   - make edits

𝗠𝘆 𝗹𝗶𝘁𝗺𝘂𝘀 𝘁𝗲𝘀𝘁: if it's under 10 minutes and I mostly know what I need -- go old school with shortcut keys.

If it's longer than 10 minutes or previously would have resulted in some kind of Google search to an Excel forum from 2004, bring in AI.

Feel free to print this out and tape it to your desk -- there's no shame in it.

Hope this helps 🙂.


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Needs to be said:

𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗔𝗜 𝘄𝗼𝗻'𝘁 𝗵𝗲𝗹𝗽 𝘂𝗻𝗹𝗲𝘀𝘀 𝘆𝗼𝘂 𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝘁𝗵𝗲 𝗳𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝘀. 

🎓 Master the judgement AI can't replace 👉 https://bit.ly/FMECourses

Back to basics... a 𝗽𝗿𝗶𝘃𝗮𝘁𝗲 𝗲𝗾𝘂𝗶𝘁𝘆 𝘄𝗮𝘁𝗲𝗿𝗳𝗮𝗹𝗹 even kids can understand...

(probably) 👇



(➕) 𝗘𝗡𝗧𝗘𝗥𝗣𝗥𝗜𝗦𝗘 𝗩𝗔𝗟𝗨𝗘

When a company is sold, the 𝗣𝘂𝗿𝗰𝗵𝗮𝘀𝗲 𝗣𝗿𝗶𝗰𝗲 is called the "Enterprise Value."

It's usually calculated as a multiple of EBITDA, for example:

$1mm of EBITDA x 8.0x = $8mm Enterprise Value

This Enterprise Value (plus any cash on the Balance Sheet) is the "Total Proceeds" from the image.

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📚 𝗜𝗳 𝗻𝗲𝗲𝗱𝗲𝗱; 𝗣𝗘 𝗶𝗻𝘁𝗲𝗿𝘃𝗶𝗲𝘄 𝗴𝘂𝗶𝗱𝗲: https://lnkd.in/ewh-x6_k 
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(➖) 𝗗𝗘𝗕𝗧

Then, things are paid off in order of priority:

1. First, the Total Proceeds "flow" down the waterfall to first tier, 𝘁𝗵𝗲 𝗗𝗲𝗯𝘁.

The Debt needs to be paid off in full before the waterfall can "flow" to the next tier.

So in this image, the "Debt bucket" is completely full before it overflows and continues down the rocks.


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(➖) 𝗣𝗥𝗘𝗙𝗘𝗥𝗥𝗘𝗗 𝗘𝗤𝗨𝗜𝗧𝗬

2. Then, the Remaining Proceeds "flow" down to the next tier, 𝘁𝗵𝗲 𝗣𝗿𝗲𝗳𝗲𝗿𝗿𝗲𝗱 𝗘𝗾𝘂𝗶𝘁𝘆.

(this is, of course, if the cap table has Preferred Equity, but it's common to see in PE deals)

Just like the "Debt bucket," the "Preferred bucket" needs to be fully repaid as well before the water can flow further.

Normally, the Preferred Equity includes:

   (a) its Return of Capital, plus;
   (b) a "Preferred Dividend" (i.e., 8% of the capital invested)

This dividend is also called the "hurdle rate."

(topic for another day: Participating and non-Participating Preferred)

Once the "Preferred bucket" is completely full, the water overflows and continues down the rocks.


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🟰 𝗖𝗢𝗠𝗠𝗢𝗡 𝗘𝗤𝗨𝗜𝗧𝗬

3. Finally, to the extent there are proceeds leftover, the rest goes to 𝘁𝗵𝗲 𝗖𝗼𝗺𝗺𝗼𝗻 𝗘𝗾𝘂𝗶𝘁𝘆 holders according to their "pro rata" share.

(in other words, how much of the Common Equity they own)

This can be the biggest pool because there's no "bucket" to fill, but the risk is of course that the Common Equity comes last in the waterfall.

Generally speaking, the lower down in the waterfall you are, the higher potential return you can achieve, but it comes with the most risk because everyone else needs to get their money back first.

Also generally speaking, another non-economic benefit of Common Equity is that it typically comes with voting rights about the strategic direction of the company, whereas the Debt and Preferred Equity typically only have economic rights.

Last note, to keep the image simple, I've skipped the "𝗰𝗮𝘁𝗰𝗵-𝘂𝗽 𝗽𝗿𝗼𝘃𝗶𝘀𝗶𝗼𝗻" that often comes right after the Preferred Hurdle is cleared (again, topic for another time).


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Been using AI modeling a ton, it's awesome.

It helps me b/c I've been building by hand for 15+ years.

𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴 𝘄𝗶𝘁𝗵 𝗔𝗜 𝘄𝗼𝗻'𝘁 𝗵𝗲𝗹𝗽 𝘂𝗻𝗹𝗲𝘀𝘀 𝘆𝗼𝘂 𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱 𝘁𝗵𝗲 𝗳𝘂𝗻𝗱𝗮𝗺𝗲𝗻𝘁𝗮𝗹𝘀. 

🎓 Master the judgetment AI can't replace 👉 https://bit.ly/FMECourses

Hey I could really use your input -- if I was going to make a course about financial modeling with AI, what would be most important to you?

Note: this would be focused on people who are often in Excel building models and want an extra edge; it's NOT geared towards re-inventing the FP&A function -- that's beyond my expertise. 

Please leave a comment. All thoughts are good. I'm just in the brainstorming phase right now.

Which one is a Current Asset?

The questions get harder 👉 https://lnkd.in/eccYpT-R

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