Two Hour Financial Model is an excel-based template and series of videos that will help you learn to create a financial model quickly. For students, entrepreneurs, CFOs, and business owners. Checkout our website and Udemy video series.
3. The financial statements
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Balance Sheet
Cash + other Assets
= Total Assets
Liabilities (Debt)
Shareholder’s
Equity
Cash Flow
Statement
Cash from:
Operations
Investing
Financing
Income Statement
Revenue –
Expenses = Net
Income
Balance Sheet
Cash + other Assets
= Total Assets
Liabilities (Debt)
Shareholder’s
Equity
4. Income Statement
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Profits from operating
the business
Not necessarily cash
flow, but usually close
Doesn’t have: Cash
flow, cash balance!
Revenue 100
- COGS 50
Gross Profit 50
- Overhead
20
Costs
EBITDA 30
- Interest 1
- Tax 10
- Depreciation 1
Net Income 18
7. The balance sheet, simplified
Assets = Property owned by the company,
including cash
Liabilities = Debt, short-term and long-term
Equity = Investment in shares of the company
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8. Cash Flow Statement
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Links the balance sheets
New cash from investment is shown on the
cash flow statements
9. TwoHourFinancialModel.com
Timing
The balance sheet is a snapshot at a single
point in time
The income and cash flow statement explain
changes between balance sheets
10. TwoHourFinancialModel.com
Exercise
Look at the financial statements for the
following companies in different
industries:
Facebook
General Electric
Ford
BP
Microsoft
Then, fill out the table on the following slide.
11. Financial statements exercise
Calculate the following totals for the most recent last 12 months.
Also, divide by revenue to calculate a percent ratio.
FB GE Ford BP MSFT
Revenue ($) 86.8
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COGS
26.9
(31%)
Gross Profit
59.9
(69%)
Overhead Costs
(SG&A + R&D)
32
(36.8%)
Cash & ST
Investments
85.7
Long term debt 20
12. Financial statements exercise
• What did you notice?
• Why do you think these companies
varied?
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