How do you structure a three-statement financial model so others can use and audit it?

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RED SAG · Accepted Answer

I separate the model into inputs, calculations and outputs. All assumptions sit on one input sheet with clear labels, units and sources, coloured blue. The calculation sheets build supporting schedules: revenue drivers, operating costs, a fixed asset and depreciation schedule, working capital using days or percentages of sales, and a debt schedule with interest and repayments. These feed the income statement, balance sheet and cash flow statement, which sit on their own sheets with one consistent timeline across the columns. I keep one sign convention and one formula per row so that it can be copied across. I add checks for the balance sheet balancing and cash reconciling, plus a summary dashboard with key outputs and scenarios. Finally I add a short cover sheet explaining the structure and version, so a colleague or auditor can follow the logic without asking me.

How do you structure a three-statement financial model so others can use and audit it?

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