Blog
Difference between LBO Model and FP&A Model
Here are the primary differences between an LBO Model and FP&A Model... Often complicated in its structure, an LBO Model is shorter-term in nature in... more »
Debt Issuance Costs: Modeling Convenience vs. GAAP Accuracy
In the world of financial modeling and M&A transactions, debt often plays a starring role. However, there's a nuanced area that doesn't always get... more »
FP&A Operating Model: The exact layout I use almost every time
Here’s the exact layout of nearly every FP&A Operating Model I build… The information flows from right to left, meaning: Summaries < —... more »
EBITDA Changes in M&A (viewed by month)
Ever wonder how EBITDA changes in an M&A transaction (pre- and post-close)? This post walks through the differences... This stays the same pre-... more »
Free Cash Runway Template in Excel
Forget 13 weeks. Let's get real. This is my "Doomsday Cash Runway" Template. (with a free download at the end 🔽) tl;dr just grab the template here.
Modeling Accounts Receivable with OFFSET in Excel
How to use the OFFSET function to build collection delays in Accounts Receivable... To be honest, the OFFSET function always used to scare me: it looks... more »
Stress test: Want your model to be good? Then make it absurd...
What am I talking about really? Creating a "stress test." You've built this fancy model, and things "look pretty good." But at the same time, you... more »
An Entire Private Equity Transaction on One Page
Here's how I fit a private equity transaction on one page. This is an example of what you would show a Managing Partner before moving forward with a deal.... more »
A complete Scenario Manager on one page...
We’re using the classic Base, Upside, & Downside as scenarios in this example. The scenarios can be selected in Column B using a drop-down list. This... more »
How I Build Seasonality Curves in Financial Models
Not all business out there consistently generate Revenue each and every month. Lots of business are considered "seasonal," meaning they generate most of... more »
A List of Links to all my Free Private Equity Content
I've listed nearly all of my free private equity content below. This is mostly a drag-and-drop from a LinkedIn post, so please forgive the shorthand.... more »
IOI vs LOI vs PA: a comparison of the common documents you will find in an M&A transaction.
🤝I’m happy to team up with David Edgar to bring some legal insight to the world of M&A. — — — An indication of... more »
I might know what EBITDA 𝘪𝘴, but how about 𝘸𝘩𝘺?
You probably know what EBITDA is, but why is it built that way? Let's start with what it is: it’s an approximation of the profitability / operating... more »
Inventory Modeling for Beginners
◼️ What is Inventory (in simple terms)? “Stuff I’m trying to sell.” ◼️ Where can I find it? On the balance sheet. (Current Asset)... more »
How to Model the Sources and Uses and Pro Forma Balance Sheet
Want to advertise with us? Click here. Last week, we took a detailed look at calculating EBITDA. Specifically, we talked about how to quantify and... more »
Different Ways to Value a Business
Want to advertise with us? Click here. One of the more interesting realizations I had in my "PE days" is that valuation is as much about art as it is... more »
What's an Investment Banking Teaser?
Last week we talked through the big picture. The "roadmap" to closing a deal. Before you punch anything into a model, the very first document you will... more »
A Private Equity Due Diligence Roadmap
Welcome to Part Three of the Financial Modeling Educator. I'm assuming you feel pretty good about the basics (modeling best practices and building the three... more »
Top 3 Reasons Your Balance Sheet Doesn't Balance
Trust me, I know how frustrating it is when you balance sheet doesn't balance. So let's keep it short and tactical today. These are the top three... more »
How To Build the Balance Sheet in 10 Steps
There's nothing quite like staring at an unbalanced Financial Model, wondering what isn't working, as the clock starts to get later and later. I've been... more »
How to Model the Statement of Cash Flows
I thought the refrain was "Income Statement, Balance Sheet, Statement of Cash Flows." You're right, that's how most people say it, but that's not how... more »
Forecasting the Income Statement
Thankfully, forecasting the Income Statement is one of the more straightforward Financial Modeling concepts, because we're effectively just mapping out (a) what... more »
The Actual Big 4: Revenue, Gross Margin, EBITDA, Cash
Last week we introduced Three Statement Modeling and how it's had the single-largest impact on my career above all other skills. This week, before we dive... more »
Three Statement Modeling: The Most Valuable Skill I've Learned In My Entire Career
I know that post title seems like clickbaity nonsense but it's not. The single most valuable skill I have learned in my entire career is Three... more »
Breaking Down Adjusted EBITDA in Quality of Earnings: A Step-by-Step Guide
Net Income serves as our foundational figure, but since it doesn't equate to cash, adjustments are needed. It's essential to understand that Net Income... more »