The document outlines the structure of a three-statement financial model, which includes the income statement, cash flow statement, and balance sheet. It provides specific formulas related to gross revenue, discounts, raw materials, gross profit, EBITDA, and net income calculations for a lemonade stand company. The text also includes Excel shortcuts for formatting and editing financial models.

1. Building a Three Statement
Financial Model

2. Financial statements are the mainstay of
many financial models. The financial
statements consist of three reports:
• » Income statement
• » Cash flow statement
• » Balance sheet

3. Three Statement Model of Lemonade Stand
Company

4. How to remove Grid lines
Alt + W + VG
How to edit the date
= EDATE
How to put indent
Alt + H + 6

5. • Gross Revenue
=Price * Quantity
• Discount
• =gross revenue*-discount rate
• Raw materials
• =gross revenue*raw materials

6. • Gross Profit
• =net revenue + Total Cogs
• Gross Profit margin
• =gross profit/net revenue
Labor
=gross revenue*labor percentage

7. • EBITDA (earnings before interest, taxes, depreciation and
amortization)
=gross profit – total expenses
Taxes
=EBT*tax rate
Net Income % of revenue
= net income / net revenue