Danielle Stein Fairhurst

When you’re creating charts in financial models or reports, you should still follow best practice and try to make your models as flexible and dynamic as you can. You should always link as much as possible in your models, and this goes for charts as well. It makes sense that when you change one of the inputs to your model, this should be reflected in the chart data, as well as the titles and labels.

The COUNT function, as the name suggests, counts. Although this sounds pretty straightforward, it’s actually not as simple as it seems and, for this reason, the COUNT function is not as commonly used as the very closely related COUNTA function. The COUNT function only counts the number of cells that contain numerical values in a range.

It is always important to document your assumptions when preparing a financial model. Once you’re happy with your assumptions, you can use them to calculate the revenue of the business for the next year. Projecting sales volume You know that your base case assumption is that the cafe will sell 120 cups of coffee per day, so you need to multiply this assumption by the monthly seasonality to arrive at the number of cups sold per day in each month.

Once you’ve found the business’s FCF, terminal value, and discount rate, it’s time to value the business in your financial model. Follow these steps: Select cell C21 and enter the formula =SUM(C19:C20); copy this formula across the row.This formula sums cells C19:C20 to arrive at the total cash flows to discount.

Now that you’ve determined your base case assumptions that reflect how you believe the business will perform, you also want to run worst-case and best-case scenarios in your financial model. Not only do you want to see how you believe the business will do, but you also want to see how the business will perform if it does worse than expectations or better than expectations.

The most commonly used method of building scenarios is to use a combination of formulas and drop-down boxes. In the financial model, you create a table of possible scenarios and their inputs and link the scenario names to an input cell drop-down box. The inputs of the model are linked to the scenario table. If the model has been built properly with all the inputs flowing through to the outputs, then the results of the model will change as the user selects different options from the drop-down box.

Now that you’ve figured out how to fund your business, you need to make future assumptions in your financial model and project how the business will perform. You need to build a separate Assumptions worksheet with your business projections that will drive the rest of the financial model.The Assumptions worksheet already has places for your key business drivers — it’s up to you to input accurate and reasonable assumptions for the business.

The major limitation of drop-down scenarios in financial modeling is that you can’t see multiple scenarios side-by-side. To show the cost per customer under different scenarios, you need to change the scenario drop-down box in cell F1 — but you’ll only be able to look at one scenario at a time.To add a data table that will allow you to see the cost per customer of all three scenarios side by side, follow these steps: Add the three scenario names — “Best Case,” “Base Case,” and “Worst Case” — below the Cost per Customer.