ashutoshsrivastava17 Financial Modeling
Process
Step 1: Define Model Purpose
| Purpose | Type | Complexity |
|---|---|---|
| Fundraising | 3-statement + projections | High |
| Project evaluation | DCF / NPV | Medium |
| Budget planning | Revenue + expense forecast | Medium |
| Scenario analysis | Toggle-based projections | Medium |
Step 2: Document Assumptions
| Category | Assumption | Source | Sensitivity |
|---|---|---|---|
| Revenue growth | X% YoY | Historical + market | High |
| Gross margin | X% | Last 4 quarters | Medium |
| CAC | $X | Last 12 months | High |
| Churn rate | X% monthly | Cohort analysis | High |
Step 3: Build Revenue Model
| Driver | Formula | Y1 | Y2 | Y3 |
|---|---|---|---|---|
| New customers | Spend / CAC | X | X | X |
| Churned | Base × churn | X | X | X |
| Revenue | Customers × ARPU | $X | $X | $X |
Step 4: Build Cost Model
| Category | Type | Driver | Y1 | Y2 | Y3 |
|---|---|---|---|---|---|
| COGS | Variable | Revenue × margin | $X | $X | $X |
| Engineering | Semi-fixed | Headcount × salary | $X | $X | $X |
| S&M | Variable | CAC × new | $X | $X | $X |
Step 5: Add Scenarios
| Scenario | Growth | Churn | Burn Rate |
|---|---|---|---|
| Bear | X% | X% | $X/mo |
| Base | X% | X% | $X/mo |
| Bull | X% | X% | $X/mo |
Step 6: Validate
| Check | Method |
|---|---|
| Formula audit | Trace to source |
| Sense check | Match industry benchmarks |
| Stress test | Extreme inputs |
| Historical fit | Replicate actuals |
Output Format
## Model: [Name]
### Assumptions: [table]
### Projections: [3-5 year summary]
### Scenarios: [Bear/Base/Bull]
### Sensitivity: [key drivers]
Quality Checklist
- Assumptions documented with sources
- Formulas reference assumptions (no hardcoded numbers)
- Scenarios toggleable
- Stress-tested
- Balance sheet balances (if applicable)
Edge Cases
- For SaaS, model MRR/ARR with cohort-based churn
- For marketplaces, model both supply and demand sides
- For fundraising, include dilution impact