ModelsPrivate EquityThree-Statement Model

Three-Statement Model

Linked Income Statement, Balance Sheet & Cash Flow with circularity solver, working capital (DSO/DIO/DPO), debt scheduling, NOL carryforward, and balance sheet check.

~5 min
AI insights available

Overview

What is a Three-Statement Model?

A Three-Statement Model links the Income Statement, Balance Sheet, and Cash Flow Statement into a single integrated financial model. Changes in revenue flow through to EBITDA, affect working capital on the balance sheet, and ultimately determine free cash flow. It's the foundation of all advanced financial modeling.

Every financial analyst builds three-statement models. It's the prerequisite for DCF, LBO, and M&A models — you can't value a company without first projecting its financials. Finance courses teach this as the core modeling skill.

Features

What you get with this model

Full Income Statement, Balance Sheet, and Cash Flow projection

Circularity solver (10-iteration convergence for interest expense)

Working capital from DSO, DIO, DPO drivers

Vintage-based depreciation tracking

NOL carryforward and tax scheduling

Automatic balance sheet balancing with live ticker data

Formula-driven Excel export with cross-sheet references

Use cases

How to use this model

1

Foundation for all other models: build this first

2

Interview prep: demonstrate you can build a model from scratch

3

Company analysis: project financials for any public company

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