Paul Barnhurst

The FP&A Guy

Founder

FP&A Tomorrow

FP&A Tomorrow is a podcast focused on discussing not only what is happening in FP&A but what does the future look like for FP&A. The show is hosted by The FP&A Guy and is the premier podcast FP&A podcast. The show launches in April 2024.

Podcast Host

Financial Modeler's Corner

Hosting a world-class podcast all about Financial Modeling.  The podcast is for anyone who wants to listen to and learn from the best financial modelers in the world.

Future Finance

Future Finance is the podcast show that illuminates the future of finance through the lens of AI, innovation, and technology.  I co-host the show with the amazing Glenn Hopper.

Co-Host

The FP&A Hub

Co-founder of the only dedicated planning and analytics community created by and for planning and analytics professionals.  

Com join us today at https://community.plan-buddies.com/c/about-us

Co-Founder

Born Capital

The tides of change are flowing into the finance function which sends the function into the age of 4.0. We say it is "Enabled by tech - Driven by people". 

At Born Capital, we focus on tech enablement and are looking for early-stage startups in what we call #CFOTech that will enable the finance function to become a profit driver. We have a keen interest in FP&A and Business Finance as this is where we see the biggest improvement potential.

Actually, CFOs themselves know this as 71% of them are not happy with the performance of their FP&A team despite significant investments made in the past decade. We will help the office of the CFO get the right tech and tools to step up to the plate and deliver on the expectations of the CEO and other CXOs.

Feel free to reach out if you would like to know more about how we can help your start-up to the next level...

Advisory Board Member

Operators Guild

The Operators Guild is an independent, invitation-only group, home to the world’s top finance and operations (high growth and technology) leaders.

Scaling a company is hard. We are working together to share best practices, help one another solve similar problems, and invest in the operator community. We meet and connect regularly to support each other as we create the next generation of high-growth companies and company leaders.

Member

FP&A Today

Host FP&A Today, one of the premier podcasts on FP&A.  It is a weekly show where we bring you the latest news and actionable tips about all things FP&A.

DigiCert, Inc.

Director of Finance Sales Operations and Analytics

Solera, Inc.

Director of FP&A - Dealer and Aftermarket Division

Director of FP&A - Dealer Divison

Built Excel data model and developed financial reporting tool that allows easy review of budget and actuals for 30 North American legal entities transactional data, this model has helped reduce accounting errors and improved insight into key business expenses and vendors.
•	Provide support to NA CFO for $500M+ SaaS business to include preparing decks, providing ad-hoc analysis, and attending various leadership meetings.
•	Coordinate consolidation of forecasts and monthly results for 3 North American business units
•	Co-Led team effort to select software financial planning system and led effort to select consulting company to implement TM1 panning tool.
•	Worked closely with accountants to improve balance sheet reconciliation reporting for prepaid and capitalized software projects allowing business to have a clearer picture of actual spend on software & software projects.
•	Supported various accounting improvement initiatives resulting in improved accounting processes, to include reconciling over $4M of unreconciled balance sheets.

FP&A Manager

Founder of The FP&A Guy | Providing training and content that helps FP&A and Finance Professionals be better at their job today and tomorrow.

I am a passionate teacher and creator of FP&A content. I enjoy helping FP&A professionals become more effective creators of value for their businesses. Today, I provide content and training on important subjects, including FP&A, Excel, Power Query, Data Visualization, Storytelling, and more. 

I host three popular podcasts, FP&A Tomorrow, Future Finance, and Financial Modeler’s Corner, which bring you the best and brightest people in finance and FP&A. 

I am a Microsoft MVP and have earned the AFP FP&A Certification and the FMI Advanced Financial Modeler Certification. 

I am a big advocate of FP&A planning tools and share research on FP&A software. I have also published several market guides to help buyers understand the landscape. 

☛ Feel free to contact me – Pbarnhurst@thefpandaguy.com

Paul Barnhurst, The FPandA Guy

Who wants to invest in The FP&A Guy?

I get one of these every few weeks on LinkedIn. Anyone else want to invest in The FP&A Guy?

Offering shares for the low/low price of $1,499.00 per share mine have the Beard premium think of it like the Buffett premium.

"If you don't know what a LET function is or what variables are, how are you going to debug this formula?"
 
=ROUND(200/(LET(
mvpPos,XLOOKUP(G240,'Dancers + Formations'!$T:$T,'Dancers + Formations'!$U:$U),
dancerPos,INDEX(XLOOKUP(G240,'Dancers + Formations'!$T:$T,'Dancers + Formations'!$T:$BM),1,MATCH(H240,'Dancers + Formations'!$U$1:$BM$1,0)),
mvpRow,VALUE(RIGHT(mvpPos,LEN(mvpPos)-1)),
mvpCol,CODE(LEFT(mvpPos,1))-64,
dancerRow,VALUE(RIGHT(dancerPos,LEN(dancerPos)-1)),
dancerCol,CODE(LEFT(dancerPos,1))-64,
rowDiff,ABS(mvpRow-dancerRow),
colDiff,ABS(mvpCol-dancerCol),
diagonals,MIN(rowDiff,colDiff),
straights,rowDiff+colDiff-2*diagonals,
diagonals*1.4+straights)),0)
 
Giles Male asked this question during our latest AI tool test, and it perfectly captures the paradox FP&A professionals face with AI-powered Excel tools.
 
This week on The ModSquad, we tested Tab AI—and the results were both impressive and sobering.
 
The standout moment? TabAI crushed our trial balance analysis test, creating comprehensive dashboards with charts, KPIs, and financial ratios. It was genuinely the closest thing to "presentation-ready" output we've seen.
 
But here's where it gets interesting...
 
→ Structured tasks (PVM analysis, deferred revenue schedules): Solid performance, fast results
 
→ Complex modeling (five-year forecasts): 30+ minutes of processing and still no usable output. Really struggled
 
→ Formula quality: Correct answers, but often using obscure functions or hard-coded values
 
Ian Schnoor, CFA, CFM made a crucial observation: "You might spend a couple of hours learning and understanding what AI did to confirm it's right, as opposed to building a simpler solution that would take longer but you'd know exactly what you're doing."
 
The reality? AI tools are accelerating specific finance workflows significantly. But they're not replacing the need for financial modeling expertise—they're actually increasing the Excel skills you need to properly validate their output.
 
Want to see exactly how we tested Tab AI across multiple real-world scenarios then check out the episode: https://lnkd.in/gbX8qM7x
 
What's your experience with AI in FP&A? Are you seeing similar patterns?
 
 
 
⭐⭐⭐⭐⭐⭐⭐⭐⭐⭐⭐⭐⭐
🎓 ​ Earn your Advanced Financial Modeler accreditation from the @Financial Modeling Institute (FMI) at https://lnkd.in/gQV55MxS (Use code Podcast to save 15%)
📰 Join The Modern Finance Playbook Newsletter and receive access to a free FP&A Business Partnering Digital Course Module - https://lnkd.in/g5H4YsvH
📺 Check out the podcast on our YouTube Channel at https://lnkd.in/gxZ45zXN

A "Star was Born" 👇
 
A finance leader told me, "A star was born" during their planning system implementation. The person they assigned to project manage it knocked it out of the park, smooth implementation.
 
I've watched the opposite scenario: companies select the cheapest software, the cheapest implementation partner, and six months later spend an extra $100,000+ cleaning up a project that never properly launched.
 
This week on FP&A Unlocked, Glenn Snyder and James Myers joined for a discussion on FP&A software implementation.
 
Here's what stood out:
 
→ "New technology plus old processes equals expensive, broken old processes."
 
Don't replicate your Excel workflows in new software. James shared a story about a company that copied their process into a modeling solution and couldn't even run a monthly forecast because they ignored how the new platform worked.
 
→ Run a proof of concept with YOUR data:
 
Demos always work perfectly with vendor data. Test 2-3 months of real data with their actual use cases. It reveals limitations before you're locked into a multi-year contract.
 
→ The implementation partner matters as much as the software:
 
If you're not 100% comfortable with the implementation partner, ask for a different one or choose another software vendor. These are bespoke tools requiring specialists. A great tool with a mediocre implementer leads to failure.
 
→ Don't base decisions solely on Software subscription price:
 
Look at total cost of ownership—licenses, professional services, training, ongoing support etc. Glenn shared a great example of a CFO who insisted on an enterprise solution for a mid-market company because "it's the best one everyone talks about"—but its cost was 5x more than necessary.
 
→ Build cross-functional teams from day one:
 
Include your business partners. They'll surface requirements you haven't considered, and when they're involved from the start, adoption skyrockets.
 
→ Negotiate for value beyond price:
 
Consider pushing for additional modules, extra consulting hours post-launch, recorded training sessions for new hires, and flexibility to scale users gradually. You don't need 200 licenses on day one if you'll only have 30 active users
 
🎧 Give it a listen—you'll save yourself time, money, and headaches next time you implement a software
 
https://lnkd.in/gvC786Nd
 
Campfire sponsors FP&A Unlocked. It is the AI-first ERP powering next-gen finance & accounting teams. General ledger, revenue automation, close management, and so much more—all on one unified platform. Learn more https://lnkd.in/dKxnyDNV 
 
 
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📰 Join The Modern Finance Playbook Newsletter for more great content at https://lnkd.in/g5H4YsvH
📺 Check out the podcast on YouTube https://lnkd.in/ejtkdsQd

In this episode of FP&A Unlocked Paul Barnhurst welcomes James Myers , a financial systems and planning expert known for helping organizations moderni

Open article: Best Practice Tips to Successfully Implement FP&A Software with James Myers by Paul Barnhurst • 2 min read

Best Practice Tips to Successfully Implement FP&A Software with James Myers

Learning to say no

One of the best decisions you can make in business is learning to say no. 

Dealing with a health scare this summer has made it a lot easier to say no and focus on the most important pars of my business. 

In the last week I have turned down 4 revenue opportunities because they did not fit with my business or with what was most important. 

It use to be painful but today it is getting much easier to say no and focus on my core strengths.

Bringing value daily, regardless of audience size, with wisdom and by being authentic. 

Being authentic - some of my favorite people to follow on LinkedIn are those who are authentic and constantly bring value, despite having smaller audiences. 

A few people I like to follow whom I have met in real life and found to be the real deal, both on and off screen. 

I recommend following them even though none of them have huge audiences. However, they always deliver incredible value. 

➡️ Glenn Hopper - No person in finance knows and delivers as much value as Glenn when it comes to AI. His books, courses, podcasts, and newsletter are second to none. 

➡️ Ron Monteiro, CPA, CMA - He is always super positive, no matter what challenges he faces, and he brings a ton of wisdom to his posts and life. Well worth following, and he is a fantastic finance teacher. Plus he Loves Mondays. 

➡️ Duke Heninger, CPA - Duke brings excellent content for Fractional CFO types. He is one of the nicest people I have met, and he always offers me great advice in person, just as he does for others on LinkedIn. 

➡️ Lauren Elizabeth Pearl, her excitement for life is contagious. Every time I talk to her, I cannot help but laugh. She has a unique perspective and a unique background, and brings a ton of value as a Fractional CFO

I could keep going and list others, but instead, I will ask you: Who is someone that might not have a big following, but you love to follow because they are authentic and bring real value to the content they share?

We are Shortcut, we solve Financial Modeling World Cup cases "10𝐱 𝐟𝐚𝐬𝐭𝐞𝐫 𝐭𝐡𝐚𝐧 𝐡𝐮𝐦𝐚𝐧 𝐜𝐡𝐚𝐦𝐩𝐢𝐨𝐧𝐬." We also find it acceptable to leave a B/S with an out-of-balance error of $1.3 million.
 
This week, we tested Shortcut against its bold claims and found that it does not live up to them, but it did perform several tasks very well.
 
My co-host Giles Male and I tackled Shortcut without Ian Schnoor, CFA, CFM 😢 , who was traveling back from London, and our honest, no-hype feedback is below.
 
Shortcut is the AI spreadsheet tool that went viral, claiming to solve Financial Modeling World Cup cases "10𝐱 𝐟𝐚𝐬𝐭𝐞𝐫 𝐭𝐡𝐚𝐧 𝐡𝐮𝐦𝐚𝐧 𝐜𝐡𝐚𝐦𝐩𝐢𝐨𝐧𝐬." and today it makes the bold claim on its website to be
𝘛𝘩𝘦 𝘞𝘰𝘳𝘭𝘥'𝘴 𝘉𝘦𝘴𝘵 𝘌𝘹𝘤𝘦𝘭 𝘈𝘐
 
The results?
 
𝐓𝐡𝐞 𝐆𝐨𝐨𝐝:
→ Best visual formatting we've seen—color coding, layout, separate assumption tabs
→ Solved 5 of 7 intermediate Excel esports challenges correctly
→ Built a three-statement model structure that looked incredibly professional
 
𝐓𝐡𝐞 𝐑𝐞𝐝 𝐅𝐥𝐚𝐠𝐬:
→ Created custom number formatting that literally REVERSED positive and negative signs (We've never seen this in our careers)
→ Built a model with an unbalanced balance sheet, then rationalized why a $1.3M variance was "acceptable" and said it was not going to fix it.
P.S. This would get you fired if you told your boss this was acceptable.
→ Hard-coded calculations instead of using dynamic formulas
→ When we asked to solve Excel Esport cases, it didn't even attempt the bonus questions that other tools tackled without us having to prompt it.
 
𝐕𝐞𝐫𝐝𝐢𝐜𝐭: Solid tool that fails to live up to its bold claims
 
Giles and I disagree on which tool we like best for different reasons, but we are aligned on one thing:
 
AI is not ready to take a modeler's job. In fact, Giles said this moment is "the most dangerous moment in Excel financial modeling, and he expects it will only get better from here"
 
It is so dangerous because the outputs look SO professional. A junior analyst could easily submit this work without catching the fundamental errors hidden beneath the polished surface.
 
My take for FP&A professionals: This isn't about whether AI tools work—they absolutely can enhance productivity. But the marketing hype claiming these tools replace expert modelers is dangerously premature. You need strong foundational skills to catch what AI gets wrong.
 
Listen here:
https://lnkd.in/gTA-H6kY
 
⭐⭐⭐
🎓 ​ Earn your Advanced Financial Modeler accreditation from the Financial Modeling Institute (FMI) at https://lnkd.in/gQV55MxS (Use code Podcast to save 15%)
📰 Join The Modern Finance Playbook Newsletter https://lnkd.in/g5H4YsvH
📺 Check out the podcast on YouTube https://lnkd.in/gxZ45zXN

The truth about Microsoft Excel Agents!!!

Next week, I will be sharing my frank, unfiltered, and candid thoughts on AI Spreadsheet agents.  

When we can use them, when we should not, and why Excel skills are as critical as ever. 

I have spent hours testing multiple Microsoft AI tools, including Microsoft's Excel AI agent, and they are incredible.

They can make us more productive, but they have limitations, and we must understand how to work with these limitations if we hope to benefit from these agents. 

We are in the early days of what many have termed Vibe Working, and many of the data outputs leave something to be desired. 

That is why I am excited to bring you a webinar sponsored by Drivetrain and co-hosted with my good friend Kirk K. focused on reality, not hype, even though the webinar title has some hype :)   

Master Excel Agents with Paul Barnhurst: What Works, What Doesn't & What's Next

Date: November 20th, 2025
Time: 10 AM PT, 1 PM ET
Register Here: https://lnkd.in/gHiKXUmG

During the webinar, we will focus on the following:

1. How to work with the current Excel AI tools - where they work, where they do not

2. Three examples with AI Agent: price volume mix analysis, headcount schedule, and smart chart selection

3. Why Excel and modeling skills are as important as they have ever been

I look forward to having you join me as I walk through several use cases and share my thoughts, along with those of other professionals, on how to get the most out of these AI spreadsheet agents.

Paul’s beard alone has more industry credibility than most SaaS startups.

AI Roasts The FP&A Guy- Since everyone uses AI for everything I figured I would get in on the fun. 

I asked AI to do a mean-spirited roast of me but every model said it could not that. One even said I might lose my credibility. It did however say it could do a light-hearted roast. Which AI did best?

Claude

🔥 LinkedIn Roast Draft (Safe but Savage)

“Paul Barnhurst calls himself The FP&A Guy. Translation: he’s the dude who can make a 200-slide deck about why your budget still sucks. He’s the only person who thinks Excel pivot tables are a personality trait. 

Honestly, if FP&A were a sport, Paul would be the guy keeping score while everyone else plays the game… and then charging you for the scoreboard subscription.”

“But hey, at least he rebranded his podcast to FP&A Unlocked — because apparently the only thing locked was his sense of humor. Follow him if you want to learn FP&A, or if you just enjoy watching someone argue with spreadsheets like they’re sentient beings.”

---
ChatGPT

🔥 Friendly Roast of Paul “The FP&A Guy” Barnhurst 🔥

(Completely safe… but still spicy enough for LinkedIn!)

If spreadsheets had a spirit animal, Paul Barnhurst would be it.

This is the only man who can turn a simple budget question into a 47-slide deck, three metaphors, a webinar, and a poll asking which FP&A meme best represents your Q4 forecast.

Paul’s beard alone has more industry credibility than most SaaS startups.

Honestly, if his facial hair ever launches its own newsletter, it’ll probably get more subscribers than his podcast—and the podcast is already really good.

And let’s be honest: Paul is the only person who can walk into a room and make everyone suddenly feel guilty about not updating their rolling forecast.
He’s basically the Santa Claus of FP&A—except instead of gifts, he leaves behind KPIs you didn’t ask for but definitely needed.

---

CoPilot

🔥 LinkedIn Roast Draft (Safe but Savage)

“Paul Barnhurst calls himself The FP&A Guy. Translation: he’s the dude who can make a 200-slide deck about why your budget still sucks. He’s the only person who thinks Excel pivot tables are a personality trait. Honestly, if FP&A were a sport, Paul would be the guy keeping score while everyone else plays the game… and then charging you for the scoreboard subscription.”

“But hey, at least he rebranded his podcast to FP&A Unlocked — because apparently the only thing locked was his sense of humor. Follow him if you want to learn FP&A, or if you just enjoy watching someone argue with spreadsheets like they’re sentient beings.”

I liked the beard roasts best myself :) Happy Friday and please use AI responsibly. 

As for the image it was so bad I had to share.

No alternative text description for this image

Vibe working is here, and yes, you can build a model in 5 minutes 👇 



However, the hype videos fail to tell you the real story, in the words of one of the smartest financial modelers I know:

𝘐𝘵'𝘴 𝘭𝘪𝘬𝘦 𝘵𝘩𝘦 𝘈𝘐'𝘴 𝘸𝘰𝘳𝘬 𝘪𝘴 𝘣𝘺 𝘵𝘩𝘦 𝘮𝘰𝘴𝘵 𝘤𝘰𝘯𝘧𝘪𝘥𝘦𝘯𝘵 𝘢𝘯𝘥 𝘮𝘰𝘴𝘵 𝘯𝘢𝘪𝘷𝘦 𝘎𝘳𝘢𝘥𝘶𝘢𝘵𝘦 𝘺𝘰𝘶’𝘷𝘦 𝘦𝘷𝘦𝘳 𝘴𝘦𝘦𝘯...'𝘱𝘭𝘢𝘶𝘴𝘪𝘣𝘭𝘺 𝘱𝘰𝘭𝘪𝘴𝘩𝘦𝘥 𝘳𝘶𝘣𝘣𝘪𝘴𝘩'—𝘪𝘵 𝘭𝘰𝘰𝘬𝘴 𝘧𝘢𝘯𝘵𝘢𝘴𝘵𝘪𝘤 𝘢𝘵 𝘢 𝘨𝘭𝘢𝘯𝘤𝘦, 𝘣𝘶𝘵 𝘪𝘵'𝘴 𝘧𝘶𝘯𝘥𝘢𝘮𝘦𝘯𝘵𝘢𝘭𝘭𝘺 𝘨𝘰𝘵 𝘮𝘢𝘫𝘰𝘳 𝘩𝘰𝘭𝘦𝘴.”

This is why it is more important than ever to have strong Excel and modeling skills, not less important. 

But it's not all doom and gloom vibe working, and Excel agents are here to stay, and if you use them correctly, they can make a huge difference. 

That is why I am excited to partner with Drivetrain and Kirk K. for a webinar this Thursday: 

Excel Agents: What Works, What Doesn't & What's Next

In this webinar, I will share lessons learned from testing several Excel and spreadsheet AI tools on the market today.  

I will share:

➡️ What tools are available today, and how can you prepare for the Excel future of tomorrow
➡️ How to navigate the tools today and ways to work with current limitations
➡️Show real-world use-cases including PVM analysis, smart chart selection, and headcount schedules


Date: Thursday, November 20th, 2025
Time: 1 PM ET
Register Here: https://lnkd.in/gHiKXUmG

Let me know in the comments how you Vibe Work responsibly?

Financial Modeling Education

Financial Modeling Courses for Investment Banking, Private Equity, and FP&A.

Mission Capital Consulting

Leesa Sleep

Board Member

TitleCard Capital Group, LLC

Vice President

Lariat Partners, LP

Associate

Hilton

Senior Analyst

FTI Consulting

Consultant

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

Ever found yourself facing a last-minute request to build a financial model, feeling so overwhelmed you literally couldn’t think straight?  Then read this 👇

I've been there.  I remember EXACTLY how it feels, and it 𝘴𝘶𝘤𝘬𝘴.

After being up until 2am the previous night, I had my head in my hands at a Colorado Rockies’ game, so insanely overwhelmed because I felt unprepared building a financial model.

Today, I can build in 2 𝘩𝘰𝘶𝘳𝘴 what used to take me 𝘸𝘦𝘦𝘬𝘴, and it’s definitely 𝘯𝘰𝘵 because I’m smarter, it’s because... 𝗜 𝗞𝗻𝗼𝘄 𝗪𝗵𝗮𝘁 𝘁𝗼 𝗗𝗼.

What most people don’t realize is that Financial Modeling can be broken down in systematic steps you can repeat every time, so you’re not always recreating the wheel from scratch.

So that’s why I created the 𝗨𝗹𝘁𝗶𝗺𝗮𝘁𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴 𝗠𝗮𝘀𝘁𝗲𝗿𝘆 𝗣𝗿𝗼𝗴𝗿𝗮𝗺: teach everything I 𝘸𝘪𝘴𝘩 I knew back then—𝙖 𝙥𝙡𝙖𝙮𝙗𝙤𝙤𝙠—to hopefully save just one Analyst from spending all weekend at the office.

Fast forward, here’s what things look like today:

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In just 8 hours, you'll learn to build the 𝘦𝘹𝘢𝘤𝘵 Financial Models I use with real Investment Banks, FP&A Teams, and Private Equity Firms—models you can use immediately—no fluff or insufferable corporate jargon.

Enroll today, and make sure you never spend another night, weekend (or vacation) burned out at the office 👉 https://www.financialmodelingeducation.com/

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Check it out here 👉 https://www.financialmodelingeducation.com/

Chris Reilly

I teach Financial Modeling, but...

I only use 3 advanced Excel formulas on a regular basis.

Don’t get me wrong -- Excel has some incredible functionality.

But I still find a lot of it complicated (and honestly, unnecessary for day-to-day modeling).

Here are the only "advanced" formulas I really use:

   – INDEX/MATCH (sometimes XLOOKUP)
   – SUMIFS
   – SUMPRODUCT

Btw, these are usually for summary tabs -- not the detailed guts of the model.

(Think dashboards)

~~~
📍 𝗕𝘁𝘄: Here's an Income Statement template to get you started 👉 https://lnkd.in/exez-uUT 
~~~


Everywhere else, I pretty much live here:

   – SUM
   – AVERAGE
   – Direct cell links ( = )
   – Plus ( + )
   – Minus ( - )
   – Divide ( / )
   – Multiply ( x )

Just basic Excel 101.

That’s 95% of my modeling.

Yes, sometimes I have to get fancy and calculate IRR or use dynamic array functions.

Or combine a few of the functions above to achieve a result.

But those moments are rare -- especially in standard ​FP&A operating models​.

And after all these years, I’ve learned one thing:

~~~
💡 𝙏𝙝𝙚 𝙗𝙪𝙨𝙞𝙣𝙚𝙨𝙨 𝙬𝙞𝙡𝙡 𝙖𝙡𝙬𝙖𝙮𝙨 𝙘𝙤𝙢𝙥𝙡𝙞𝙘𝙖𝙩𝙚 𝙩𝙝𝙚 𝙛𝙞𝙡𝙚.  𝘿𝙤𝙣’𝙩 𝙡𝙚𝙩 𝙩𝙝𝙚 𝙛𝙞𝙡𝙚 𝙘𝙤𝙢𝙥𝙡𝙞𝙘𝙖𝙩𝙚 𝙩𝙝𝙚 𝙗𝙪𝙨𝙞𝙣𝙚𝙨𝙨.
~~~

So, keep it simple where you can (to be user-friendly).

Make it scalable on the back-end (to reduce error).

And only complicate it when you truly have to.



p.s. If you're feeling a little stuck in "Excel hell" and want to learn to build models like a business owner, I can help 👉 https://bit.ly/FMECourses

I can help you master Three Statement Modeling & 13 Week Cash Flow Forecasting in 8 hours.

50 Excel shortcuts for modeling 👉 https://lnkd.in/esbZCXje 


🟢 𝗕𝗲𝗴𝗶𝗻𝗻𝗲𝗿

Copy (Ctrl + C)
Paste (Ctrl + V)
Cut (Ctrl + X)
Undo (Ctrl + Z)
Redo (Ctrl + Y)
Save (Ctrl + S)
Bold (Ctrl + B)
Italic (Ctrl + I)
Underline (Ctrl + U)
Select entire column (Ctrl + Space)
Select entire row (Shift + Space)
Insert row (Ctrl + Shift + '+')
Delete row (Ctrl + '-')
Open format cells dialog (Ctrl + 1)
Insert comment (threaded note) (Alt + R + C)

🟠 𝗜𝗻𝘁𝗲𝗿𝗺𝗲𝗱𝗶𝗮𝘁𝗲

Fill down (Ctrl + D)
Fill right (Ctrl + R)
Apply currency format (Ctrl + Shift + $)
Apply percent format (Ctrl + Shift + %)
Apply border (Ctrl + Shift + &)
Format painter (ribbon) (Alt + H + F + P)
Hide rows (Ctrl + 9)
Hide columns (Ctrl + 0)
Go to specific cell (F5)
Select visible cells only (Alt + ;)
Freeze top row (Alt + W + F + R)
Move to next worksheet (Ctrl + Page Down)
Move to previous worksheet (Ctrl + Page Up)
Switch open workbooks (Ctrl + Tab)
Open name manager (Ctrl + F3)

🔴 𝗔𝗱𝘃𝗮𝗻𝗰𝗲𝗱

Show formulas (Ctrl + `)
Evaluate formula (Alt + M + V)
Name a range (Ctrl + F3)
Create a table (Ctrl + T)
Insert function (Shift + F3)
Jump to precedents (Ctrl + [)
Jump to dependents (Ctrl + ])
Go to special (Ctrl + G → Special)
Paste special (Ctrl + Alt + V)
Flash fill (Ctrl + E)
Repeat last action (F4)
Group rows/columns (Alt + Shift + →)
Ungroup rows/columns (Alt + Shift + ←)
Collapse outline (Alt + A + H)
Return to previous location (F5 → Enter)

🔵 𝗕𝗲𝘀𝘁 𝗳𝗼𝗿 𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴

Lock cell reference (F4)
Add line break in cell (Alt + Enter)
Insert today’s date (Ctrl + ;)
Insert current time (Ctrl + Shift + ;)
Recalculate workbook (Ctrl + Alt + F9)
Paste values only (Alt + E + S + V)
Format as number (Ctrl + Shift + 1)
Format as date (Ctrl + Shift + 3)
Format as time (Ctrl + Shift + 2)
Increase decimal (Alt + H + 0)
Decrease decimal (Alt + H + 9)
Toggle absolute/relative (F4 (in formula bar))
Apply general format (Ctrl + Shift + ~)
Select entire worksheet (Ctrl + A (twice))
Add horizontal border (Alt + H + B + H)

⚠️ 𝗗𝗶𝘀𝗰𝗹𝗮𝗶𝗺𝗲𝗿

Knowing Excel shortcuts 𝙬𝙤𝙣'𝙩 get you a seat on the Board, but it will help you speed up what the Board needs: 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗺𝗼𝗱𝗲𝗹𝘀 they can actually understand, that help you decide what the business should do next.

Want to put all those shortcuts to good use?

Master three statement modeling here: https://bit.ly/FMECourses

𝗕𝗥𝗘𝗔𝗞𝗜𝗡𝗚 — Board Rejects AI Financial Model

After opening Excel Online for the first (and last) time ever, local financial modeler Chris Reilly proudly told the Board, “Yeah, AI made the whole thing.  It took eight minutes and I went and got coffee.”

The model reportedly included three statements, a debt schedule, and a circular reference that Reilly claimed "achieved sentience" before obliterating itself into a wall of cells that just said #𝗡𝗔𝗠𝗘?.

“While we’d love to write a blank check for millions of dollars with zero diligence, we unfortunately needed at least one 𝘩𝘶𝘮𝘢𝘯 brain to validate and interpret the output,” said the anchor LP of a large fund-of-funds.

“Loved his spirit,” added one Board member, “but that thing had more hallucinations than me in college.”

Despite promises that AI would “𝘣𝘶𝘪𝘭𝘥 𝘮𝘰𝘥𝘦𝘭𝘴 𝘪𝘯 𝘴𝘦𝘤𝘰𝘯𝘥𝘴 𝘴𝘰 𝘺𝘰𝘶 𝘤𝘢𝘯 𝘧𝘰𝘤𝘶𝘴 𝘰𝘯 𝘴𝘵𝘳𝘢𝘵𝘦𝘨𝘺,” the model apparently fabricated an entire new product line, three subsidiaries, and an IPO scheduled for next Thursday.

Sources went on to confirm the model forecasted 400% annual growth, negative expenses, and “infinite free cash flow.”

At press time, Reilly was reportedly seen updating the headline of his resume to "Chief Prompt Engineer."

Curious what it's like to close a deal in Private Equity?

This winding roadmap can help... 👇


✔️ 𝗪𝗵𝗮𝘁 𝗪𝗲'𝗿𝗲 𝗗𝗼𝗶𝗻𝗴

The acquirer (usually Private Equity firm) is trying to figure out "𝘥𝘰𝘦𝘴 𝘣𝘶𝘺𝘪𝘯𝘨 𝘵𝘩𝘪𝘴 𝘤𝘰𝘮𝘱𝘢𝘯𝘺 𝘮𝘢𝘬𝘦 𝘴𝘦𝘯𝘴𝘦?"

And while no two deals are the same, one thing is for sure: there is a TON of work that goes into due diligence.


🔁 𝗢𝘃𝗲𝗿𝗮𝗹𝗹 𝗣𝗿𝗼𝗰𝗲𝘀𝘀

Generally speaking, due diligence starts with cheaper, in-house tasks like building the financial model, analyzing contents in the data room, and submitting an IOI/LOI.

If the deal looks attractive, then more expensive third-party providers are brought in (lawyers, accountants, & consultants).


⚠️ 𝗥𝗼𝗮𝗱𝘄𝗼𝗿𝗸 𝗔𝗵𝗲𝗮𝗱

You'll notice the map has plenty of sharp curves, cracks, and off-ramps.

That's because the majority of the time the buyer will exit the road early.

(something obvious doesn't pan out or match the investment thesis).

But over time, "𝘵𝘩𝘦 𝘥𝘦𝘢𝘭" will emerge that slowly makes its way down the road, navigating the cracks, bumps, potholes, and whatever else, to ultimately close the deal.

This is a TON of work for the Private Equity firm, Investment Bank, and especially those at the "target company" (the company being acquired).

Often, it can feel like you're working two jobs for 6-9 months.


💻 𝗡𝗼𝘁𝗲 𝗳𝗼𝗿 𝗠𝗼𝗱𝗲𝗹𝗲𝗿𝘀

As diligence progresses, your Financial Model will keep track of everything.

   ↳ Financial Statements
   ↳ EBITDA & Valuation
   ↳ Business Analysis
   ↳ Closing Date
   ↳ Legal Terms

Make sure that thing is air-tight.

More people will rely on it than you think...

(Your team, lenders, investors, etc.)


🤝 𝗧𝗵𝗲 𝗕𝗼𝘁𝘁𝗼𝗺 𝗟𝗶𝗻𝗲

Despite possibly sounding cliché, it all comes back to people and a cultural fit.

The target company and Private Equity firm need to get along, otherwise the deal can go to sh*t quickly.

When you're on the road, the "windshield time" can be some of the most valuable.

(when you're driving with company employees to visit different business sites).

So no matter what road your diligence process takes (or what your Financial Model looks like), it will 𝗮𝗹𝘄𝗮𝘆𝘀 𝗰𝗼𝗺𝗲 𝗯𝗮𝗰𝗸 𝘁𝗼 𝗰𝘂𝗹𝘁𝘂𝗿𝗲.

You can use this map to guide you.

Hope this helps 🙂.


💡 𝗪𝗵𝘆 𝗜 𝗽𝗼𝘀𝘁 𝗼𝗻 𝗟𝗶𝗻𝗸𝗲𝗱𝗜𝗻:

When I worked in Private Equity, I spent too many nights & weekends building models I barely understood.

Now, I teach everything I 𝘸𝘪𝘴𝘩 I knew then:

🤝 𝗛𝗼𝘄 𝗜 𝗰𝗮𝗻 𝗵𝗲𝗹𝗽:

📥 Due diligence Gantt chart: https://lnkd.in/eDJqaFfR 

𝘱.𝘴. 𝘢𝘯 𝘓𝘉𝘖 𝘮𝘰𝘥𝘦𝘭 𝘪𝘴 𝘫𝘶𝘴𝘵 𝘢 𝘵𝘩𝘳𝘦𝘦 𝘴𝘵𝘢𝘵𝘦𝘮𝘦𝘯𝘵 𝘮𝘰𝘥𝘦𝘭 𝘸𝘪𝘵𝘩 𝘴𝘰𝘮𝘦 𝘧𝘢𝘯𝘤𝘺 𝘴𝘵𝘶𝘧𝘧 𝘰𝘯 𝘵𝘰𝘱.  𝘐 𝘤𝘢𝘯 𝘵𝘦𝘢𝘤𝘩 𝘺𝘰𝘶 𝘵𝘰 𝘣𝘶𝘪𝘭𝘥 𝘰𝘯𝘦 𝘵𝘰𝘥𝘢𝘺 👉 https://bit.ly/FMECourses

Everyone can tell you 𝘄𝗵𝗮𝘁 EBITDA is, but no one can tell you 𝘄𝗵𝘆.

7 tips to help understand 𝗪𝗛𝗬 EBITDA exists 👇


1️⃣ 𝗘𝗕𝗜𝗧𝗗𝗔 𝟭𝟬𝟭

It's not GAAP or Cash.

It calculates a company's 𝙣𝙤𝙧𝙢𝙖𝙡𝙞𝙯𝙚𝙙 profitability by removing the effects of financing and accounting decisions.

There are two main reasons for this:

   1. Comparison to other companies
   2. Establishing a basis for valuation


2️⃣ 𝗦𝘁𝗮𝗿𝘁 𝘄𝗶𝘁𝗵 𝗡𝗲𝘁 𝗜𝗻𝗰𝗼𝗺𝗲

Net Income is the "GAAP Profit" or "Earnings" of the company.

We start with a "GAAP-recognized" figure and work backwards.


3️⃣ 𝗡𝗲𝘂𝘁𝗿𝗮𝗹𝗶𝘇𝗲 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝗶𝗻𝗴 𝗗𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀

Companies can make different estimates related to:

   ● Amortization of intangibles
   ● Impairment charges
   ● Salvage value
   ● Depreciation
   ● Useful life

So by "adding back" Depreciation and Amortization, it helps mitigate the impact of these varying accounting policies.

This provides a more uniform measure of performance.


4️⃣ 𝗡𝗲𝘂𝘁𝗿𝗮𝗹𝗶𝘇𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝗗𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀

"Interest" is the cost of using borrowed money.

But what if a company didn't borrow?

It wouldn't have this expense.

So by "adding back" the interest, it shows us what the company's earnings would look like without debt.


5️⃣ 𝗡𝗲𝘂𝘁𝗿𝗮𝗹𝗶𝘇𝗲 𝗧𝗮𝘅 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀

Taxes are tricky. We all pay them, so why add them back?

The catch: how businesses handle taxes varies.

Some businesses, like S Corps and LLCs, don't pay corporate income tax.

Instead, taxes pass through to owners' personal returns.

C Corporations, on the other hand, 𝙙𝙤 pay corporate income tax.

So, a C Corp would show an income tax expense on its income statement (and the other types would not).

Lastly, the other adjustments (from above) affect taxable income (it gets a little circular).

So this final step ensures we get a "tax-neutral" view, which helps us compare business on a more apples-to-apples basis.


6️⃣ 𝗪𝗵𝗮𝘁 𝗘𝗕𝗜𝗧𝗗𝗔 𝗶𝘀 𝗠𝗶𝘀𝘀𝗶𝗻𝗴

Changes in Working Capital: EBITDA doesn't factor in cash timing related to receivables or payables.

CapEx: Cash used to acquire, upgrade, and maintain physical assets such as property, buildings, or equipment.

Debt Principal: Interest expense is accounted for in EBITDA, but principal repayment of debt is not.

Capital Lease Payments: These obligations are found on the balance sheet. However, similar to debt principal, the principal portion of these lease payments is not reflected in EBITDA.


7️⃣ 𝗦𝘂𝗺𝗺𝗮𝗿𝘆

EBITDA helps us compare companies by neutralizing the effects of financing, accounting, and tax decisions.

The key comparison is "Operational Profitability," but 𝙣𝙤𝙩 Cash.

It's a useful 𝘀𝘁𝗮𝗿𝘁𝗶𝗻𝗴 𝗽𝗼𝗶𝗻𝘁, but it's not the whole picture.

It needs to be modeled alongside 𝗳𝗿𝗲𝗲 𝗰𝗮𝘀𝗵 𝗳𝗹𝗼𝘄 to have any real meaning.

I can teach you both here: https://bit.ly/FMECourses

Learn the statement of cash flows with this simple AF one-pager 👇


✓ 𝙍𝙚𝙦𝙪𝙚𝙨𝙩 𝙇𝙞𝙨𝙩

First things first, you'll need some data.

Ask for the Income Statement and the Balance Sheet.


✓ 𝙎𝙩𝙚𝙥𝙨 — 𝙄𝙣𝙘𝙤𝙢𝙚 𝙎𝙩𝙖𝙩𝙚𝙢𝙚𝙣𝙩

1. Pull the Net Income from the Income Statement

2. Pull the Depreciation from the Income Statement

(or use the change in Accumulated Depreciation from the Balance Sheet if available)


✓ 𝙎𝙩𝙚𝙥𝙨 — 𝘽𝙖𝙡𝙖𝙣𝙘𝙚 𝙎𝙝𝙚𝙚𝙩

You're calculating the 𝘤𝘩𝘢𝘯𝘨𝘦𝘴 between two periods.

For Assets: Previous Period - Current Period

For Liabilities & Equity: Current Period - Previous Period

(note, if Fixed Assets are shown on a "net basis," you'll need to subtract Depreciation from your calculation as well)

~~~
📥 btw, here's a balance sheet guide 👉 https://lnkd.in/ew4nwaVx 
~~~


✓ 𝙀𝙣𝙙 𝙍𝙚𝙨𝙪𝙡𝙩

If done correctly, the ending cash should match what you see on the Balance Sheet.

Once it does, you can be confident your model is structurally sound.

And now you can carry those formulas forward to reflect your forecast.


💡𝙋𝙧𝙤 𝙏𝙞𝙥

Once your Statement of Cash Flows is built correctly, you leave it alone.

~~~𝗙𝗢𝗥𝗘𝗩𝗘𝗥~~~

Your modeling should only be done in the Income Statement and Balance Sheet.

The Statement of Cash Flows is nothing more than a formulaic bridge between the other two statements.


✓ 𝙎𝙠𝙞𝙢𝙢𝙖𝙗𝙡𝙚 𝙑𝙚𝙧𝙨𝙞𝙤𝙣

   • Get Income Statement & Balance Sheet
   • Calculate Changes b/t Balance Sheet
   • Works correctly when Ending Cash matches the Balance Sheet


~~~

Hey! I'm Chris Reilly, and I teach financial modeling.

I can help you master Three Statement Modeling in a few hours.

↪ https://bit.ly/FMECourses

Check out this video...

How you can use SUMPRODUCT to spot errors in your model 👇

~~~
📥 𝘱.𝘴. 𝘩𝘦𝘳𝘦'𝘴 𝘵𝘩𝘦 𝘥𝘢𝘴𝘩𝘣𝘰𝘢𝘳𝘥 𝘧𝘳𝘰𝘮 𝘵𝘩𝘦 𝘷𝘪𝘥𝘦𝘰 👉 https://lnkd.in/efdpVuxX 
~~~

𝗧𝗵𝗲 𝗳𝗼𝗿𝗺𝘂𝗹𝗮

Here's the formula: =SUMPRODUCT(--iserror([range]))

Note: In the video I incorrectly say "double negative 🙃," but Matthew Herbert of BizTrix pointed out that:

"The double minus is an operator, not negation. The double minus is the unary operator and it explicitly converts logical values into numbers (true converts to 1 and false converts to 0). ISERROR returns a logical value. This is why SUM(ISERROR(range)) or SUMPRODUCT(ISERROR(range)) returns 0 but placing the unary operator in front of ISERROR returns >0 when there is an error."

I have no idea what that means, but sounds good to me.

(Even as an experienced user and instructor there's always something new to learn!)


𝗨𝘀𝗲 𝗰𝗮𝘀𝗲

I will often put this SUMPRODUCT formula in the upper-left corner of a given sheet, and use it as a quick check/scan to see if any errors pop up.

Maybe something helpful you can add to your model 🙂.



~~~

👋 Hey, I'm Chris Reilly -- I teach financial modeling the way I 𝘸𝘪𝘴𝘩 someone taught me.

🎓 I can help you master Three Statement Modeling and 13 Week Cash Flow Forecasting in only 8 hours -- and you'll complete your first working model in just 45 minutes.

↪ https://bit.ly/FMECourses

Hey so that model you just emailed your boss...

...did you check it for errors?


For real though, how closely?

(slamming F2 saying "looks good looks good looks good" isn't a strategy)

I hate to break it to you, but 90% of all spreadsheets contain errors.

(𝘎𝘰𝘰𝘨𝘭𝘦 𝘪𝘵)

That's an A- in being wrong.

Not great.

The truth is, Excel's amazing flexibility also exposes our 𝘩𝘶𝘮𝘢𝘯 limitations —

We make mistakes.

All of us.

———

If there is software out there that can be:

▪️ a grocery list, and;

▪️ a time keeper, and;

▪️ billion-dollar LBO, then;

𝘴𝘶𝘳𝘦𝘭𝘺 the human mind can find a way to make a mistake.

(I've done it plenty of times)

———

That's why the first thing I do with every file is build "error checks."

It's a separate tab.

I call it "QC" for "Quality Control."

Others call it "QA" ("Quality Assurance").

Others call it "Errors" or "Validations."

Doesn't matter what you call it, 𝘺𝘰𝘶 𝘫𝘶𝘴𝘵 𝘸𝘢𝘯𝘵 𝘵𝘰 𝘩𝘢𝘷𝘦 𝘪𝘵.

———

You link all your possible errors to this one place.

▪️ Does my Balance Sheet balance?

▪️ Does my Statement of Cash Flows match the Balance Sheet?

▪️ Are my Covenants in compliance?

▪️ Does my Cash go negative?

Then at the top, you put a "𝗠𝗔𝗦𝗧𝗘𝗥 𝗖𝗛𝗘𝗖𝗞 𝗖𝗘𝗟𝗟."

The Master Check Cell references all the 𝘰𝘵𝘩𝘦𝘳 errors below.

And ~𝗣𝗿𝗼 𝗧𝗶𝗽~ you link this Master Check Cell to cell A1 of 𝘦𝘷𝘦𝘳𝘺 𝘰𝘵𝘩𝘦𝘳 𝘵𝘢𝘣 in your workbook.

That way, when something goes wrong (and it will),

you are 𝘪𝘮𝘮𝘦𝘥𝘪𝘢𝘵𝘦𝘭𝘺 notified (in cell A1), and you can investigate.

𝗤𝘂𝗶𝗰𝗸 𝘁𝗶𝗽:

▪️ press "ctrl + [ " on cell A1

▪️ it will bring you to your "QC" tab

———

I've got an example in the image below.

You can see my list of possible errors,

and my "Master Check Cell" at the top.

For complicated files I will have hundreds of these.

It is the first and last tab I 𝘢𝘭𝘸𝘢𝘺𝘴 check before hitting "send" in my email.


𝙉𝙚𝙭𝙩 𝙎𝙩𝙚𝙥𝙨 ⤵️

📥 Stay organized with this modeling checklist 👉 https://lnkd.in/eVTU67fY 

✅ Master this error-checking technique with step-by-step videos 👉 https://bit.ly/FMECourses

Three statement modeling can be overwhelming when you're starting out.

Here's what to do when "you don't know what you don't know" 👇


1️⃣ 𝗛𝗶𝘀𝘁𝗼𝗿𝗶𝗰𝗮𝗹 𝗜𝗻𝗰𝗼𝗺𝗲 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁 & 𝗕𝗮𝗹𝗮𝗻𝗰𝗲 𝗦𝗵𝗲𝗲𝘁

This is your first request.

You need the 𝘩𝘪𝘴𝘵𝘰𝘳𝘪𝘤𝘢𝘭 Income Statement and Balance Sheet 𝘣𝘺 𝘮𝘰𝘯𝘵𝘩.

Hard to believe, but it's all you need to build a complete three statement model.


2️⃣ 𝗕𝘂𝗶𝗹𝗱 𝗛𝗶𝘀𝘁𝗼𝗿𝗶𝗰𝗮𝗹 𝗖𝗮𝘀𝗵 𝗙𝗹𝗼𝘄𝘀

This is the step everyone gets wrong.

They get the IS and BS from above and immediately start building a Revenue forecast.

No. Not yet.

Build the 𝘩𝘪𝘴𝘵𝘰𝘳𝘪𝘤𝘢𝘭 cash flows first.

Why?

The Ending Cash on your Balance Sheet is already available as a reference point.

So, using the 𝗶𝗻𝗱𝗶𝗿𝗲𝗰𝘁 𝗺𝗲𝘁𝗵𝗼𝗱, you should be able to build a Statement of Cash Flows that 𝘮𝘢𝘵𝘤𝘩𝘦𝘴 the Balance Sheet.

This is your early double-check that your model is working correctly.

The Ending Cash should match for every month of the historical period.

Once you get this right, 𝘵𝘩𝘦𝘯 you're ready to move on.

~~~
📌 𝘣𝘵𝘸 𝘩𝘦𝘳𝘦'𝘴 𝘢 𝘥𝘦𝘵𝘢𝘪𝘭𝘦𝘥 𝘤𝘩𝘦𝘤𝘬𝘭𝘪𝘴𝘵: https://lnkd.in/eVTU67fY 
~~~


3️⃣ 𝗦𝘄𝗶𝘁𝗰𝗵 𝘁𝗼 "𝗙𝗼𝗿𝗲𝗰𝗮𝘀𝘁 𝗠𝗼𝗱𝗲"

Since your SCF works correctly, now you're ready to create the "plumbing" for the forecast.

Drag your columns forward for as many months as you need.

(Typically three statement model is 3-5 years).

Leave your Income Statement entirely flat & unchanged.

𝗛𝗲𝗿𝗲'𝘀 𝘁𝗵𝗲 𝗺𝗼𝘀𝘁 𝗶𝗺𝗽𝗼𝗿𝘁𝗮𝗻𝘁 𝗽𝗮𝗿𝘁:

Balance Sheet needs 2 things:

   1) Ending Cash now links to your SCF
   2) Retained Earnings = Prior Period + Current Period Net Income

✅ This will make your Balance Sheet Balance.


4️⃣ 𝗕𝘂𝗶𝗹𝗱 𝗮 𝗕𝗮𝘀𝗶𝗰 𝗙𝗼𝗿𝗲𝗰𝗮𝘀𝘁

Now that your plumbing is correct, you can build a basic forecast:

   ↳ YoY % growth for Revenue (fine for now)
   ↳ COGS as % of Revenue
   ↳ G&A mostly fixed + inflation assumption
   ↳ Calculate Net Income & EBITDA

   ↳ Build Working Capital (AR, AP, Inventory using DSO, DOH, DPO)
   ↳ Deferred Revenue
   ↳ Tax Accrual
   ↳ Bonus Accrual
   ↳ Debt Schedule
   ↳ Equity Schedule (if needed)

A lot of these can be done with "BASE Modeling," i.e.:

𝗕𝗲𝗴𝗶𝗻𝗻𝗶𝗻𝗴 𝗕𝗼𝗻𝘂𝘀
   (+) Bonus Expense
   (-) Bonus Cash Payments
𝗘𝗻𝗱𝗶𝗻𝗴 𝗕𝗼𝗻𝘂𝘀

(Ending Balance links back to your Balance Sheet).


🧠 𝗥𝗲𝗺𝗲𝗺𝗯𝗲𝗿: Every experienced modeler started exactly where you are.

   ↳ Start with the history
   ↳ Get the "plumbing" right
   ↳ Build a basic forecast
   ↳ Add details later

Hope this helps 🙂.


~~~
𝘱.𝘴. 𝘪𝘧 𝘺𝘰𝘶'𝘥 𝘱𝘳𝘦𝘧𝘦𝘳 𝘵𝘰 𝘸𝘢𝘵𝘤𝘩 𝘷𝘪𝘥𝘦𝘰𝘴 𝘢𝘯𝘥 𝘭𝘦𝘢𝘳𝘯 𝘵𝘩𝘳𝘦𝘦 𝘴𝘵𝘢𝘵𝘦𝘮𝘦𝘯𝘵 𝘮𝘰𝘥𝘦𝘭𝘪𝘯𝘨 𝘴𝘵𝘦𝘱-𝘣𝘺-𝘴𝘵𝘦𝘱, 𝘐 𝘤𝘢𝘯 𝘵𝘦𝘢𝘤𝘩 𝘺𝘰𝘶 𝘪𝘯 𝘫𝘶𝘴𝘵 𝘢 𝘧𝘦𝘸 𝘩𝘰𝘶𝘳𝘴 👉 https://bit.ly/FMECourses

I've been passionate about Private Equity for as long as I can remember.

But it has a 𝗱𝗮𝗿𝗸 𝘀𝗶𝗱𝗲 too...


🗣️ 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻

It begins and ends with a breakdown in communication.

Fuel on the fire? Different personalities, styles, and compatibility.

It might sound cliché, but partnering in private equity isn’t all that different from a romantic relationship.

All fun and games early on, but comes down to compatibility long term.

The dinner/drinks/onsite stage is exciting.

Everyone's talking about growth and upside.

But reality often plays out differently.


❌ 𝟭𝘀𝘁 𝗠𝗶𝘀𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴: 𝗗𝘂𝗲 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗶𝘀 𝗡𝗼 𝗝𝗼𝗸𝗲

People at the "OpCo" (company being acquired) often feel like they’re working two jobs:

   1) Their normal role

   2) Responding to diligence requests from the PE firm

The stressor is obvious -- longer hours at work and less time at home.

It’s easy for doubt to creep in early:

“Is this what it’s going to be like 𝘦𝘷𝘦𝘳𝘺 𝘥𝘢𝘺?”


❌ 𝟮𝗻𝗱 𝗠𝗶𝘀𝘂𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴: 𝗧𝗵𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗶𝘀 𝗜𝗻𝘁𝗲𝗻𝘀𝗲

In middle-market deals, there’s often an "understanding gap" between the OpCo finance team and the PE firm.

The OpCo knows the “old way,” but now they’re faced with a new capital structure.

Once you start talking about LBOs, revolvers, equity contributions, and so on -- it can be overwhelming.


❌ 𝗣𝗘 𝗙𝗿𝘂𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻: 𝗧𝗵𝗲 𝗧𝗲𝗮𝗺 𝗜𝘀𝗻’𝘁 𝗔𝘀 𝗦𝘁𝗿𝗼𝗻𝗴 𝗔𝘀 𝗘𝘅𝗽𝗲𝗰𝘁𝗲𝗱

The PE firm starts questioning post-close roles and even considers hiring new people.

Contrary to popular opinion, PE 𝙙𝙤𝙚𝙨𝙣'𝙩 want to fire anyone.

But in reality -- the acquisition is an investment -- and it needs a team that can deliver returns to LPs.


❌ 𝗧𝗲𝗿𝗺𝘀 𝗮𝗻𝗱 𝗗𝗲𝗮𝗹 𝗙𝗮𝘁𝗶𝗴𝘂𝗲

This is why a detailed LOI is so important.

Disagreements over structure can lead to long legal calls that go late into the night.

By the time the deal finally closes, both sides are exhausted.

And now they’re supposed to 𝘤𝘦𝘭𝘦𝘣𝘳𝘢𝘵𝘦?


📆 𝗧𝗵𝗲 𝗘𝗮𝗿𝗹𝘆 𝗗𝗮𝘆𝘀

This is where compatibility either kicks in -- or it doesn’t.

Things can improve… or:

   - teams start blaming each other

   - new hires are made, others leave

   - systems change

   - culture shifts

   - add-ons are made with little integration

And the OpCo feels it most -- because the PE firm is in charge now.


🔎 𝗭𝗼𝗼𝗺𝗶𝗻𝗴 𝗢𝘂𝘁

PE gets painted as the villain, but both sides have to agree to the deal.

In my experience, it always comes back to one thing: 𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗼𝗻 🤝.


👀 𝗪𝗵𝗮𝘁 𝗛𝗮𝘃𝗲 𝗜 𝗦𝗲𝗲𝗻?

If 0 is toxic and 10 is sunshine & rainbows -- most deals I’ve seen are a 6 or 7.

A successful outcome, with a few bumps and bruises along the way.


p.s. if you're interested in PE, I can help you:

📚 interview guide 👉 https://lnkd.in/ewh-x6_k 

📽️ learn LBO modeling 👉 https://bit.ly/FMECourses

Which part of a three statement model trips you up the most?
Full quiz here 👉 https://lnkd.in/eccYpT-R

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