Free Financial Model Tutorial

• What is a Model?
• Excel Tips
• Accounting Overview
• Conventions and Layout
• Basic Modeling
  • Column C
  • Column D
  • Column E
  • Column F
  • Column G
  • Column H
  • Column I
  • Column J
  • Operating

Column E.  To further illustrate the workings of the working capital and cash flow formulas, we will have Bubba show up early to pay Bob.

1. Balance Sheet - Accounts Receivable (E28).  A hard code reduction to A/R takes it to zero.  (step 6 will begin to model A/R)
2. Cash Flow Statement  - A/R (E59).  The formula automatically increases cash because of the decrease in the current asset.  A decrease in assets “generates” cash just like an increase in assets uses cash.  What really happened is Bubba showed up with $500 cash and Bob tore up the IOU.