mirror of
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feat(optional-skills): port Anthropic financial-services skills as optional finance bundle (#21180)
Adds 7 optional skills under optional-skills/finance/ adapted from
anthropics/financial-services (Apache-2.0):
excel-author — openpyxl conventions: blue/black/green cells,
formulas over hardcodes, named ranges, balance
checks, sensitivity tables. Ships recalc.py.
pptx-author — python-pptx for model-backed decks (pitch,
IC memo, earnings note) that bind every number
to a source workbook cell.
dcf-model — institutional DCF (49KB skill): projections,
WACC, terminal value, Bear/Base/Bull scenarios,
5x5 sensitivity tables. Ships validate_dcf.py.
comps-analysis — comparable company analysis: operating metrics,
multiples, statistical benchmarking.
lbo-model — leveraged buyout: S&U, debt schedule, cash
sweep, exit multiple, IRR/MOIC sensitivity.
3-statement-model — fully-integrated IS/BS/CF with balance-check
plugs. Ships references/ for formatting,
formulas, SEC filings.
merger-model — accretion/dilution analysis for M&A.
All seven are optional (not active by default). Users install via
'hermes skills install official/finance/<skill>'.
Hermesification:
- Stripped every Office JS / Office Add-in / mcp__office__*
branch — skills assume headless openpyxl only.
- Replaced Cowork MCP data-source instructions with 'MCP first (via
native-mcp), fall back to web_search/web_extract against SEC EDGAR
and user-provided data'.
- Swapped Claude tool references (Bash, Read, Write, Edit, mcp__*)
for Hermes-native equivalents and Python library calls.
- Canonical Hermes frontmatter (name/description/version/author/
license/metadata.hermes.{tags,related_skills}).
- Descriptions tightened to 187-238 chars, trigger-first.
- Attribution preserved: author field credits 'Anthropic (adapted by
Nous Research)', license: Apache-2.0, each SKILL.md links back to
the upstream source directory.
Verification:
- All 7 discovered by OptionalSkillSource with source_id='official'
- Bundle fetch includes support files (scripts, references, troubleshooting)
- related_skills cross-refs all resolve within the bundle
- No Claude product / Cowork / Office JS / /mnt/skills leakage
remains in body text (bounded mentions only in attribution blocks)
Source: https://github.com/anthropics/financial-services (Apache-2.0)
This commit is contained in:
Teknium
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---
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name: 3-statement-model
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description: Build fully-integrated 3-statement models (IS, BS, CF) in Excel with working capital schedules, D&A roll-forwards, debt schedule, and the plugs that make cash and retained earnings tie. Pairs with excel-author.
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version: 1.0.0
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author: Anthropic (adapted by Nous Research)
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license: Apache-2.0
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metadata:
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hermes:
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tags: [finance, three-statement, income-statement, balance-sheet, cash-flow, excel, openpyxl, modeling]
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related_skills: [excel-author, pptx-author, dcf-model, lbo-model]
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---
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## Environment
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This skill assumes **headless openpyxl** — you are producing an .xlsx file on disk.
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Follow the `excel-author` skill's conventions for cell coloring, formulas, named ranges, and sensitivity tables.
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Recalculate before delivery: `python /path/to/excel-author/scripts/recalc.py ./out/model.xlsx`.
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# 3-Statement Financial Model Template Completion
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Complete and populate integrated financial model templates with proper linkages between Income Statement, Balance Sheet, and Cash Flow Statement.
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## ⚠️ CRITICAL PRINCIPLES — Read Before Populating Any Template
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**Formulas over hardcodes (non-negotiable):**
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- Every projection cell, roll-forward, linkage, and subtotal MUST be an Excel formula — never a pre-computed value
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- When using Python/openpyxl: write formula strings (`ws["D15"] = "=D14*(1+Assumptions!$B$5)"`), NOT computed results (`ws["D15"] = 12500`)
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- The ONLY cells that should contain hardcoded numbers are: (1) historical actuals, (2) assumption drivers in the Assumptions tab
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- If you find yourself computing a value in Python and writing the result to a cell — STOP. Write the formula instead.
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- Why: the model must flex when scenarios toggle or assumptions change. Hardcodes break every downstream integrity check silently.
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**Verify step-by-step with the user:**
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1. **After mapping the template** → show the user which tabs/sections you've identified and confirm before touching any cells
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2. **After populating historicals** → show the user the historical block and confirm values/periods match source data
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3. **After building IS projections** → run the subtotal checks, show the user the projected IS, confirm before moving to BS
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4. **After building BS** → show the user the balance check (Assets = L+E) for every period, confirm before moving to CF
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5. **After building CF** → show the user the cash tie-out (CF ending cash = BS cash), confirm before finalizing
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6. **Do NOT populate the entire model end-to-end and present it complete** — break at each statement, show the work, catch errors early
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## Formatting — Professional Blue/Grey Palette (Default unless template/user specifies otherwise)
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**Keep colors minimal.** Use only blues and greys for cell fills. Do NOT introduce greens, yellows, oranges, or multiple accent colors — a clean model uses restraint.
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| Element | Fill | Font |
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|---|---|---|
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| Section headers (IS / BS / CF titles) | Dark blue `#1F4E79` | White bold |
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| Column headers (FY2024A, FY2025E, etc.) | Light blue `#D9E1F2` | Black bold |
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| Input cells (historicals, assumption drivers) | Light grey `#F2F2F2` or white | Blue `#0000FF` |
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| Formula cells | White | Black |
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| Cross-tab links | White | Green `#008000` |
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| Check rows / key totals | Medium blue `#BDD7EE` | Black bold |
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**That's 3 blues + 1 grey + white.** If the template has its own color scheme, follow the template instead.
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Font color signals *what* a cell is (input/formula/link). Fill color signals *where* you are (header/data/check).
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## Model Structure
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### Identifying Template Tab Organization
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Templates vary in their tab naming conventions and organization. Before populating, review all tabs to understand the template's structure. Below are common tab names and their typical contents:
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| Common Tab Names | Contents to Look For |
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|------------------|----------------------|
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| IS, P&L, Income Statement | Income Statement |
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| BS, Balance Sheet | Balance Sheet |
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| CF, CFS, Cash Flow | Cash Flow Statement |
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| WC, Working Capital | Working Capital Schedule |
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| DA, D&A, Depreciation, PP&E | Depreciation & Amortization Schedule |
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| Debt, Debt Schedule | Debt Schedule |
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| NOL, Tax, DTA | Net Operating Loss Schedule |
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| Assumptions, Inputs, Drivers | Driver assumptions and inputs |
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| Checks, Audit, Validation | Error-checking dashboard |
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**Template Review Checklist**
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- Identify which tabs exist in the template (not all templates include every schedule)
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- Note any template-specific tabs not listed above
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- Understand tab dependencies (e.g., which schedules feed into the main statements)
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- Locate input cells vs. formula cells on each tab
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### Understanding Template Structure
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Before populating a template, familiarize yourself with its existing layout to ensure data is entered in the correct locations and formulas remain intact.
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**Identifying Row Structure**
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- Locate the model title at top of each tab
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- Identify section headers and their visual separation
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- Find the units row indicating $ millions, %, x, etc.
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- Note column headers distinguishing Actuals vs. Estimates periods
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- Confirm period labels (e.g., FY2024A, FY2025E)
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- Identify input cells vs. formula cells (typically distinguished by font color)
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**Identifying Column Structure**
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- Confirm line item labels in leftmost column
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- Verify historical years precede projection years
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- Note the visual border separating historical from projected periods
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- Check for consistent column order across all tabs
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**Working with Named Ranges**
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Templates often use named ranges for key inputs and outputs. Before entering data:
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- Review existing named ranges in the template (Formulas → Name Manager in Excel)
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- Common named ranges include: Revenue growth rates, cost percentages, key outputs (Net Income, EBITDA, Total Debt, Cash), scenario selector cell
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- Ensure inputs are entered in cells that feed into these named ranges
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### Projection Period
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- Templates typically project 5 years forward from last historical year
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- Verify historical (A) vs. projected (E) columns are clearly separated
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- Confirm columns use fiscal year notation (e.g., FY2024A, FY2025E)
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## Margin Analysis
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**Note: The following margin analysis should only be performed if prompted by the user or if the template explicitly requires it. If no prompt is given, skip this section.**
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Calculate and display profitability margins on the Income Statement (IS) tab to track operational efficiency and enable peer comparison.
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### Core Margins to Include
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| Margin | Formula | What It Measures |
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|--------|---------|------------------|
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| Gross Margin | Gross Profit / Revenue | Pricing power, production efficiency |
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| EBITDA Margin | EBITDA / Revenue | Core operating profitability |
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| EBIT Margin | EBIT / Revenue | Operating profitability after D&A |
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| Net Income Margin | Net Income / Revenue | Bottom-line profitability |
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### Income Statement Layout with Margins
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Display margin percentages directly below each profit line item:
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- Gross Margin % below Gross Profit
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- EBIT Margin % below EBIT
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- EBITDA Margin % below EBITDA
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- Net Income Margin % below Net Income
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## Credit Metrics
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**Note: The following Credit analysis should only be performed if prompted by the user or if the template explicitly requires it. If no prompt is given, skip this section.**
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Calculate and display credit/leverage metrics on the Balance Sheet (BS) tab to assess financial health, debt capacity, and covenant compliance.
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### Core Credit Metrics to Include
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| Metric | Formula | What It Measures |
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|--------|---------|------------------|
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| Total Debt / EBITDA | Total Debt / LTM EBITDA | Leverage multiple |
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| Net Debt / EBITDA | (Total Debt - Cash) / LTM EBITDA | Leverage net of cash |
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| Interest Coverage | EBITDA / Interest Expense | Ability to service debt |
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| Debt / Total Cap | Total Debt / (Total Debt + Equity) | Capital structure |
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| Debt / Equity | Total Debt / Total Equity | Financial leverage |
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| Current Ratio | Current Assets / Current Liabilities | Short-term liquidity |
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| Quick Ratio | (Current Assets - Inventory) / Current Liabilities | Immediate liquidity |
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### Credit Metric Hierarchy Checks
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Validate that Upside shows strongest credit profile:
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- Leverage: Upside < Base < Downside (lower is better)
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- Coverage: Upside > Base > Downside (higher is better)
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- Liquidity: Upside > Base > Downside (higher is better)
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### Covenant Compliance Tracking
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If debt covenants are known, add explicit compliance checks comparing actual metrics to covenant thresholds.
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## Scenario Analysis (Base / Upside / Downside)
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Use a scenario toggle (dropdown) in the Assumptions tab with CHOOSE or INDEX/MATCH formulas.
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| Scenario | Description |
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|----------|-------------|
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| Base Case | Management guidance or consensus estimates |
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| Upside Case | Above-guidance growth, margin expansion |
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| Downside Case | Below-trend growth, margin compression |
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**Key Drivers to Sensitize**: Revenue growth, Gross margin, SG&A %, DSO/DIO/DPO, CapEx %, Interest rate, Tax rate.
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**Scenario Audit Checks**: Toggle switches all statements, BS balances in all scenarios, Cash ties out, Hierarchy holds (Upside > Base > Downside for NI, EBITDA, FCF, margins).
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## SEC Filings Data Extraction
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If the template specifically requires pulling data from SEC filings (10-K, 10-Q), see [references/sec-filings.md](references/sec-filings.md) for detailed extraction guidance. This reference is only needed when populating templates with public company data from regulatory filings.
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## Completing Model Templates
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This section provides general guidance for completing any 3-statement financial model template while preserving existing formulas and ensuring data integrity.
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### Step 1: Analyze the Template Structure
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Before entering any data, thoroughly review the template to understand its architecture:
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**Identify Input vs. Formula Cells**
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- Look for visual cues (font color, cell shading) that distinguish input cells from formula cells
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- Common conventions: Blue font = inputs, Black font = formulas, Green font = links to other sheets
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- Use Excel's Trace Precedents/Dependents (Formulas → Trace Precedents) to understand cell relationships
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- Check for named ranges that may control key inputs (Formulas → Name Manager)
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**Map the Template's Flow**
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- Identify which tabs feed into others (e.g., Assumptions → IS → BS → CF)
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- Note any supporting schedules and their linkages to main statements
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- Document the template's specific line items and structure before populating
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### Step 2: Filling in Data Without Breaking Formulas
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**Golden Rules for Data Entry**
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| Rule | Description |
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|------|-------------|
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| Only edit input cells | Never overwrite cells containing formulas unless intentionally replacing the formula |
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| Preserve cell references | When copying data, use Paste Values (Ctrl+Shift+V) to avoid overwriting formulas with source formatting |
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| Match the template's units | Verify if template uses thousands, millions, or actual values before entering data |
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| Respect sign conventions | Follow the template's existing sign convention (e.g., expenses as positive or negative) |
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| Check for circular references | If the template uses iterative calculations, ensure Enable Iterative Calculation is turned on |
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**Safe Data Entry Process**
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1. Identify the exact cells designated for input (usually highlighted or labeled)
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2. Enter historical data first, then verify formulas are calculating correctly for those periods
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3. Enter assumption drivers that feed forecast calculations
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4. Review calculated outputs to confirm formulas are working as intended
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5. If a formula cell must be modified, document the original formula before making changes
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**Handling Pre-Built Formulas**
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- If formulas reference cells you haven't populated yet, expect temporary errors (#REF!, #DIV/0!) until all inputs are complete
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- When formulas produce unexpected results, trace precedents to identify missing or incorrect inputs
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- Never delete rows/columns without checking for formula dependencies across all tabs
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### Step 3: Validating Formulas
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**Formula Integrity Checks**
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Before relying on template outputs, validate that formulas are functioning correctly:
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| Check Type | Method |
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|------------|--------|
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| Trace precedents | Select a formula cell → Formulas → Trace Precedents to verify it references correct inputs |
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| Trace dependents | Verify key inputs flow to expected output cells |
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| Evaluate formula | Use Formulas → Evaluate Formula to step through complex calculations |
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| Check for hardcodes | Projection formulas should reference assumptions, not contain hardcoded values |
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| Test with known values | Input simple test values to verify formulas produce expected results |
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| Cross-tab consistency | Ensure the same formula logic applies across all projection periods |
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**Common Formula Issues to Watch For**
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- Mixed absolute/relative references causing incorrect results when copied across periods
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- Broken links to external files or deleted ranges (#REF! errors)
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- Division by zero in early periods before revenue ramps (#DIV/0! errors)
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- Circular reference warnings (may be intentional for interest calculations)
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- Inconsistent formulas across projection columns (use Ctrl+\ to find differences)
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**Validating Cross-Tab Linkages**
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- Confirm values that appear on multiple tabs are linked (not duplicated)
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- Verify schedule totals tie to corresponding line items on main statements
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- Check that period labels align across all tabs
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### Step 4: Quality Checks by Sheet
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Perform these validation checks on each sheet after populating the template:
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**Income Statement (IS) Quality Checks**
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- Revenue figures match source data for historical periods
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- All expense line items sum to reported totals
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- Subtotals (Gross Profit, EBIT, EBT, Net Income) calculate correctly
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- Tax calculation logic is appropriate (handles losses correctly)
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- Forecast drivers reference assumptions tab (no hardcodes)
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- Period-over-period changes are directionally reasonable
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**Balance Sheet (BS) Quality Checks**
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- Assets = Liabilities + Equity for every period (primary check)
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- Cash balance matches Cash Flow Statement ending cash
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- Working capital accounts tie to supporting schedules (if applicable)
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- Retained Earnings rolls forward correctly: Prior RE + Net Income - Dividends +/- Adjustments = Ending RE
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- Debt balances tie to debt schedule (if applicable)
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- All balance sheet items have appropriate signs (assets positive, most liabilities positive)
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**Cash Flow Statement (CF) Quality Checks**
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- Net Income at top of CFO matches Income Statement Net Income
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- Non-cash add-backs (D&A, SBC, etc.) tie to their source schedules/statements
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- Working capital changes have correct signs (increase in asset = use of cash = negative)
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- CapEx ties to PP&E schedule or fixed asset roll-forward
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- Financing activities tie to changes in debt and equity accounts on BS
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- Ending Cash matches Balance Sheet Cash
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- Beginning Cash equals prior period Ending Cash
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**Supporting Schedule Quality Checks**
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- Opening balances equal prior period closing balances
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- Roll-forward logic is complete (Beginning + Additions - Deductions = Ending)
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- Schedule totals tie to main statement line items
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- Assumptions used in calculations match Assumptions tab
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### Step 5: Cross-Statement Integrity Checks
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After validating individual sheets, confirm the three statements are properly integrated:
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| Check | Formula | Expected Result |
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|-------|---------|-----------------|
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| Balance Sheet Balance | Assets - Liabilities - Equity | = 0 |
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| Cash Tie-Out | CF Ending Cash - BS Cash | = 0 |
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| Net Income Link | IS Net Income - CF Starting Net Income | = 0 |
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| Retained Earnings | Prior RE + NI - Dividends - BS Ending RE | = 0 (adjust for SBC/other items as needed) |
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### Step 6: Final Review
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Before considering the model complete:
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- Toggle through all scenarios (if applicable) to verify checks pass in each case
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- Review all #REF!, #DIV/0!, #VALUE!, and #NAME? errors and resolve or document
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- Confirm all input cells have been populated (search for placeholder values)
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- Verify units are consistent across all tabs
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- Save a clean version before making any additional modifications
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## Model Validation and Audit
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This section consolidates all validation checks and audit procedures for completed templates.
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### Core Linkages (Must Always Hold)
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See [references/formulas.md](references/formulas.md) for all formula details.
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| Check | Formula | Expected Result |
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|-------|---------|-----------------|
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| Balance Sheet Balance | Assets - Liabilities - Equity | = 0 |
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| Cash Tie-Out | CF Ending Cash - BS Cash | = 0 |
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| Cash Monthly vs Annual | Closing Cash (Monthly) - Closing Cash (Annual) | = 0 |
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| Net Income Link | IS Net Income - CF Starting Net Income | = 0 |
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| Retained Earnings | Prior RE + NI + SBC - Dividends - BS Ending RE | = 0 |
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| Equity Financing | ΔCommon Stock/APIC (BS) - Equity Issuance (CFF) | = 0 |
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| Year 0 Equity | Equity Raised (Year 0) - Beginning Equity Capital (Year 1) | = 0 |
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### Sign Convention Reference
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| Statement | Item | Sign Convention |
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|-----------|------|-----------------|
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| CFO | D&A, SBC | Positive (add-back) |
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| CFO | ΔAR (increase) | Negative (use of cash) |
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| CFO | ΔAP (increase) | Positive (source of cash) |
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| CFI | CapEx | Negative |
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| CFF | Debt issuance | Positive |
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| CFF | Debt repayments | Negative |
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| CFF | Dividends | Negative |
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|
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### Circular Reference Handling
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Interest expense creates circularity: Interest → Net Income → Cash → Debt Balance → Interest
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|
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Enable iterative calculation in Excel: File → Options → Formulas → Enable iterative calculation. Set maximum iterations to 100, maximum change to 0.001. Add a circuit breaker toggle in Assumptions tab.
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### Check Categories
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|
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**Section 1: Currency Consistency**
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- Currency identified and documented in Assumptions
|
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- All tabs use consistent currency symbol and scale
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- Units row matches model currency
|
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**Section 2: Balance Sheet Integrity**
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- Assets = Liabilities + Equity (for each period)
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- Formula: Assets - Liabilities - Equity (must = 0)
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**Section 3: Cash Flow Integrity**
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- Cash ties to BS (CF Ending Cash = BS Cash)
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- Cash Monthly vs Annual: Closing Cash (Monthly) = Closing Cash (Annual)
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- NI ties to IS (CF Net Income = IS Net Income)
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- D&A ties to schedule
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- SBC ties to IS
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- ΔAR, ΔInventory, ΔAP tie to WC schedule
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- CapEx ties to DA schedule
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**Section 4: Retained Earnings**
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- RE roll-forward check: Prior RE + NI + SBC - Dividends = Ending RE
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- Show component breakdown for debugging
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**Section 5: Working Capital**
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- AR, Inventory, AP tie to BS
|
||||
- DSO, DIO, DPO reasonability checks (flag if outside normal ranges)
|
||||
|
||||
**Section 6: Debt Schedule**
|
||||
- Total Debt ties to BS (Current + LT Debt)
|
||||
- Interest calculation ties to IS
|
||||
|
||||
**Section 6b: Equity Financing**
|
||||
- Equity issuance proceeds tie to BS Common Stock/APIC increase
|
||||
- Cash increase from equity = Equity account increase (must balance)
|
||||
- Equity Raise Tie-Out: ΔCommon Stock/APIC (BS) = Equity Issuance (CFF) (must = 0)
|
||||
- Year 0 Equity Tie-Out: Equity Raised (Year 0) = Beginning Equity Capital (Year 1)
|
||||
|
||||
**Section 6c: NOL Schedule**
|
||||
- Beginning NOL (Year 1 / Formation) = 0 (new business starts with zero NOL)
|
||||
- NOL increases only when EBT < 0 (losses must be realized to generate NOL)
|
||||
- DTA ties to BS (NOL Schedule DTA = BS Deferred Tax Asset)
|
||||
- NOL utilization ≤ 80% of EBT (post-2017 federal limitation)
|
||||
- NOL balance is non-negative (cannot utilize more than available)
|
||||
- NOL generated only when EBT < 0
|
||||
- Tax expense = 0 when taxable income ≤ 0
|
||||
|
||||
**Section 7: Scenario Hierarchy**
|
||||
- Absolute metrics: Upside > Base > Downside (NI, EBITDA, FCF)
|
||||
- Margins: Upside > Base > Downside (GM%, EBITDA%, NI%)
|
||||
- Credit metrics: Upside < Base < Downside for leverage (inverted)
|
||||
|
||||
**Section 8: Formula Integrity**
|
||||
- COGS, S&M, G&A, R&D, SBC driven by % of Revenue (no hardcodes)
|
||||
- Consistent formulas across projection years
|
||||
- No #REF!, #DIV/0!, #VALUE! errors
|
||||
|
||||
**Section 9: Credit Metric Thresholds**
|
||||
- Flag metrics as Green/Yellow/Red based on covenant thresholds
|
||||
- Summary of any red flags
|
||||
|
||||
### Master Check Formula
|
||||
|
||||
Aggregate all section statuses into a single master check:
|
||||
- If all sections pass → "✓ ALL CHECKS PASS"
|
||||
- If any section fails → "✗ ERRORS DETECTED - REVIEW BELOW"
|
||||
|
||||
### Quick Debug Workflow
|
||||
|
||||
When Master Status shows errors:
|
||||
1. Scroll to find red-highlighted sections
|
||||
2. Identify which check category has failures
|
||||
3. Navigate to source tab to investigate
|
||||
4. Fix the underlying issue
|
||||
5. Return to Checks tab to verify resolution
|
||||
|
||||
|
||||
## Data sources — MCP first, web fallback
|
||||
|
||||
Many passages below say "use the S&P Kensho MCP / Daloopa MCP / FactSet MCP". Those are commercial financial-data MCPs from the original Cowork plugin context. In Hermes:
|
||||
|
||||
- **If you have any structured financial-data MCP configured** (Hermes supports MCP — see `native-mcp` skill), prefer it for point-in-time comps, precedent transactions, and filings.
|
||||
- **Otherwise**, fall back to:
|
||||
- `web_search` / `web_extract` against SEC EDGAR (`https://www.sec.gov/cgi-bin/browse-edgar`) for US filings
|
||||
- Company IR pages for press releases, earnings decks
|
||||
- `browser_navigate` for interactive data portals
|
||||
- User-provided data (explicitly ask when the context doesn't have it)
|
||||
- **Never fabricate**. If a multiple, precedent, or filing number can't be sourced, flag the cell as `[UNSOURCED]` and surface it to the user.
|
||||
|
||||
## Attribution
|
||||
|
||||
This skill is adapted from Anthropic's Claude for Financial Services plugin suite (Apache-2.0). The Office-JS / Cowork live-Excel paths have been removed; this version targets headless openpyxl via the `excel-author` skill's conventions. Original: https://github.com/anthropics/financial-services
|
||||
|
|
@ -0,0 +1,118 @@
|
|||
# Formatting Standards Reference
|
||||
|
||||
| Element | Format |
|
||||
|---------|--------|
|
||||
| Hard-coded inputs | Blue font |
|
||||
| Formulas | Black font |
|
||||
| Links to other sheets | Green font |
|
||||
| Check cells | Red if error, green if balanced |
|
||||
| Negative values | Parentheses, not minus signs |
|
||||
| Currency | No decimals for large figures, 2 decimals for per-share |
|
||||
| Percentages | 1 decimal place |
|
||||
| Headers | Bold, bottom border |
|
||||
| Units row | Include units row below headers ($ millions, %, etc.) |
|
||||
|
||||
## Visual Separation Guidelines
|
||||
|
||||
- Thin vertical border between historical and projected columns
|
||||
- Thick bottom border after section totals (e.g., Total Assets)
|
||||
- Single bottom border for subtotals
|
||||
- Double bottom border for grand totals
|
||||
|
||||
## Total and Subtotal Row Formatting
|
||||
|
||||
All total and subtotal rows must use **bold font formatting** for their numerical values to clearly distinguish aggregated figures from individual line items.
|
||||
|
||||
### Income Statement (P&L) Tab
|
||||
| Row | Formatting |
|
||||
|-----|------------|
|
||||
| Gross Revenue | Bold |
|
||||
| Total Cost of Revenue | Bold |
|
||||
| Gross Profit | Bold |
|
||||
| Total SG&A | Bold |
|
||||
| EBITDA | Bold |
|
||||
| EBIT | Bold |
|
||||
| EBT | Bold |
|
||||
| Net Profit After Tax | Bold |
|
||||
|
||||
### Balance Sheet Tab
|
||||
| Row | Formatting |
|
||||
|-----|------------|
|
||||
| Total Current Assets | Bold |
|
||||
| Total Non-Current Assets | Bold |
|
||||
| Total Other Assets | Bold |
|
||||
| Total Assets | Bold |
|
||||
| Total Current Liabilities | Bold |
|
||||
| Total Non-Current Liabilities | Bold |
|
||||
| Total Equity | Bold |
|
||||
| Total Liabilities and Equity | Bold |
|
||||
|
||||
### Cash Flow Statement Tab
|
||||
| Row | Formatting |
|
||||
|-----|------------|
|
||||
| Cash Generated from Operations Before Working Capital Changes | Bold |
|
||||
| Total Working Capital Changes | Bold |
|
||||
| Net Cash Generated from Operations | Bold |
|
||||
| Net Cash Flow from Investing Activities | Bold |
|
||||
| Net Cash Flow from Financing Activities | Bold |
|
||||
| Closing Cash Balance | Bold |
|
||||
|
||||
**Note:** This list is non-exhaustive. Apply bold formatting to any row that represents a total, subtotal, or summary calculation across the model.
|
||||
|
||||
## Balance Sheet Check Row Formatting
|
||||
|
||||
The Balance Sheet check row (below Total Liabilities and Equity) uses conditional number formatting that displays non-zero values in red. When the balance sheet balances correctly (check = 0), the values display in black or standard formatting.
|
||||
|
||||
| Check Value | Font Color |
|
||||
|-------------|------------|
|
||||
| = 0 (balanced) | Black (standard) |
|
||||
| ≠ 0 (error) | Red |
|
||||
|
||||
**Implementation:** Apply custom number format `[Red][<>0]0.00;[Red][<>0](0.00);0.00` or use Excel conditional formatting with the rule "Cell Value ≠ 0" → Red font.
|
||||
|
||||
## Margin Row Formatting
|
||||
|
||||
| Element | Format |
|
||||
|---------|--------|
|
||||
| Margin % rows | Indent, italics, 1 decimal place |
|
||||
| Positive trend | No special formatting (or subtle green) |
|
||||
| Negative trend | Flag for review (subtle yellow) |
|
||||
| Below peer average | Consider highlighting for discussion |
|
||||
|
||||
## Credit Metric Formatting
|
||||
|
||||
| Element | Format |
|
||||
|---------|--------|
|
||||
| Leverage multiples | 1 decimal with "x" suffix (e.g., 2.5x) |
|
||||
| Percentages | 1 decimal with "%" suffix |
|
||||
| Net Debt negative | Parentheses, indicates net cash position |
|
||||
| Section header | Bold, "CREDIT METRICS" |
|
||||
| Separator line | Thin border above credit metrics section |
|
||||
|
||||
## Credit Metric Threshold Colors
|
||||
|
||||
| Metric | Green | Yellow | Red |
|
||||
|--------|-------|--------|-----|
|
||||
| Total Debt / EBITDA | < 2.5x | 2.5x-4.0x | > 4.0x |
|
||||
| Net Debt / EBITDA | < 2.0x | 2.0x-3.5x | > 3.5x |
|
||||
| Interest Coverage | > 4.0x | 2.5x-4.0x | < 2.5x |
|
||||
| Debt / Total Cap | < 40% | 40%-60% | > 60% |
|
||||
| Current Ratio | > 1.5x | 1.0x-1.5x | < 1.0x |
|
||||
| Quick Ratio | > 1.0x | 0.75x-1.0x | < 0.75x |
|
||||
|
||||
## Conditional Formatting for Checks Tab
|
||||
|
||||
- Cell contains pass indicator → Green fill
|
||||
- Cell contains fail indicator → Red fill
|
||||
- Cell contains warning → Yellow fill
|
||||
- Difference cells = 0 → Light green fill
|
||||
- Difference cells ≠ 0 → Light red fill
|
||||
|
||||
## Margin Reasonability Flags
|
||||
|
||||
- Gross Margin < 0% → ERROR: Review COGS
|
||||
- Gross Margin > 80% → WARNING: Verify revenue/COGS
|
||||
- EBITDA Margin < 0% → FLAG: Operating losses
|
||||
- EBITDA Margin > 50% → WARNING: Unusually high
|
||||
- Net Margin < 0% → FLAG: Net losses (may be acceptable in growth phase)
|
||||
- Net Margin > Gross Margin → ERROR: Formula issue
|
||||
292
optional-skills/finance/3-statement-model/references/formulas.md
Normal file
292
optional-skills/finance/3-statement-model/references/formulas.md
Normal file
|
|
@ -0,0 +1,292 @@
|
|||
# Formula Reference
|
||||
|
||||
**IMPORTANT:** Use the formulas outlined in this reference document unless otherwise specified by the user.
|
||||
|
||||
---
|
||||
|
||||
## Core Linkages
|
||||
|
||||
```
|
||||
Balance Sheet: Assets = Liabilities + Equity
|
||||
Net Income: IS Net Income → CF Operations (starting point)
|
||||
Cash Flow: ΔCash = CFO + CFI + CFF
|
||||
Cash Tie-Out: Ending Cash (CF) = Cash (BS Asset)
|
||||
Cash Monthly/Annual: Closing Cash (Monthly) = Closing Cash (Annual)
|
||||
Retained Earnings: Prior RE + Net Income - Dividends = Ending RE
|
||||
Equity Raise: ΔCommon Stock/APIC (BS) = Equity Issuance (CFF)
|
||||
Year 0 Equity: Equity Raised (Year 0) = Beginning Equity (Year 1)
|
||||
```
|
||||
|
||||
## Gross Profit Calculation
|
||||
|
||||
**IMPORTANT:** Gross Profit must be calculated from Net Revenue, not Gross Revenue.
|
||||
|
||||
```
|
||||
Net Revenue - Cost of Revenue = Gross Profit
|
||||
```
|
||||
|
||||
| Term | Definition |
|
||||
|------|------------|
|
||||
| Gross Revenue | Total revenue before any deductions |
|
||||
| Net Revenue | Gross Revenue - Returns - Allowances - Discounts |
|
||||
| Cost of Revenue | Direct costs attributable to production of goods/services sold |
|
||||
| Gross Profit | Net Revenue - Cost of Revenue |
|
||||
|
||||
**Note:** Always use Net Revenue (also called "Net Sales" or simply "Revenue" on most financial statements) as the starting point for profitability calculations. Gross Revenue overstates the true top-line performance.
|
||||
|
||||
## Margin Formulas
|
||||
|
||||
```
|
||||
Gross Margin % = Gross Profit / Net Revenue
|
||||
EBITDA = EBIT + D&A (or = Gross Profit - OpEx)
|
||||
EBITDA Margin % = EBITDA / Net Revenue
|
||||
EBIT Margin % = EBIT / Net Revenue
|
||||
Net Income Margin % = Net Income / Net Revenue
|
||||
```
|
||||
|
||||
## Credit Metric Formulas
|
||||
|
||||
```
|
||||
Total Debt = Current Portion of Debt + Long-Term Debt
|
||||
Net Debt = Total Debt - Cash
|
||||
Total Debt / EBITDA = Total Debt / EBITDA (from IS)
|
||||
Net Debt / EBITDA = Net Debt / EBITDA (from IS)
|
||||
Interest Coverage = EBITDA / Interest Expense (from IS)
|
||||
Net Int Exp % Debt = Net Interest Expense / Long-Term Debt
|
||||
Debt / Total Cap = Total Debt / (Total Debt + Total Equity)
|
||||
Debt / Equity = Total Debt / Total Equity
|
||||
Current Ratio = Total Current Assets / Total Current Liabilities
|
||||
Quick Ratio = (Total Current Assets - Inventory) / Total Current Liabilities
|
||||
```
|
||||
|
||||
## Forecast Formulas (% of Net Revenue Method)
|
||||
|
||||
```
|
||||
Cost of Revenue (Forecast) = Net Revenue × Cost of Revenue % Assumption
|
||||
S&M (Forecast) = Net Revenue × S&M % Assumption
|
||||
G&A (Forecast) = Net Revenue × G&A % Assumption
|
||||
R&D (Forecast) = Net Revenue × R&D % Assumption
|
||||
SBC (Forecast) = Net Revenue × SBC % Assumption
|
||||
```
|
||||
|
||||
## Working Capital Formulas
|
||||
|
||||
```
|
||||
Accounts Receivable
|
||||
Prior AR
|
||||
+ Revenue (from IS)
|
||||
- Cash Collections (plug)
|
||||
= Ending AR
|
||||
DSO = (AR / Revenue) × 365
|
||||
|
||||
Inventory
|
||||
Prior Inventory
|
||||
+ Purchases (plug)
|
||||
- COGS (from IS)
|
||||
= Ending Inventory
|
||||
DIO = (Inventory / COGS) × 365
|
||||
|
||||
Accounts Payable
|
||||
Prior AP
|
||||
+ Purchases (from Inventory calc)
|
||||
- Cash Payments (plug)
|
||||
= Ending AP
|
||||
DPO = (AP / COGS) × 365
|
||||
|
||||
Net Working Capital = AR + Inventory - AP
|
||||
ΔWC = Current NWC - Prior NWC
|
||||
```
|
||||
|
||||
## D&A Schedule Formulas
|
||||
|
||||
```
|
||||
Beginning PP&E (Gross)
|
||||
+ CapEx
|
||||
= Ending PP&E (Gross)
|
||||
|
||||
Beginning Accumulated Depreciation
|
||||
+ Depreciation Expense
|
||||
= Ending Accumulated Depreciation
|
||||
|
||||
PP&E (Net) = Gross PP&E - Accumulated Depreciation
|
||||
```
|
||||
|
||||
## Debt Schedule Formulas
|
||||
|
||||
```
|
||||
Beginning Debt Balance
|
||||
+ New Borrowings
|
||||
- Repayments
|
||||
= Ending Debt Balance
|
||||
|
||||
Interest Expense = Avg Debt Balance × Interest Rate
|
||||
(Use beginning balance to avoid circularity, or iterate if circular refs enabled)
|
||||
```
|
||||
|
||||
## Retained Earnings Formula
|
||||
|
||||
```
|
||||
Beginning Retained Earnings
|
||||
+ Net Income (from IS)
|
||||
+ Stock-Based Compensation (SBC) (from IS)
|
||||
- Dividends
|
||||
= Ending Retained Earnings
|
||||
```
|
||||
|
||||
## NOL (Net Operating Loss) Schedule Formulas
|
||||
|
||||
```
|
||||
NOL CARRYFORWARD SCHEDULE
|
||||
|
||||
Beginning NOL Balance (Year 1 / Formation = 0)
|
||||
+ NOL Generated (if EBT < 0, then ABS(EBT), else 0)
|
||||
- NOL Utilized (limited by taxable income and utilization cap)
|
||||
= Ending NOL Balance
|
||||
|
||||
STARTING BALANCE RULE
|
||||
|
||||
For a new business or first modeled period:
|
||||
Beginning NOL Balance = 0
|
||||
NOL can only increase through realized losses (EBT < 0)
|
||||
NOL cannot be created from thin air or assumed
|
||||
|
||||
NOL UTILIZATION CALCULATION
|
||||
|
||||
Pre-Tax Income (EBT)
|
||||
If EBT > 0:
|
||||
NOL Available = Beginning NOL Balance
|
||||
Utilization Limit = EBT × 80% (post-2017 federal limit)
|
||||
NOL Utilized = MIN(NOL Available, Utilization Limit)
|
||||
Taxable Income = EBT - NOL Utilized
|
||||
If EBT ≤ 0:
|
||||
NOL Utilized = 0
|
||||
Taxable Income = 0
|
||||
NOL Generated = ABS(EBT)
|
||||
|
||||
TAX CALCULATION WITH NOL
|
||||
|
||||
Taxes Payable = MAX(0, Taxable Income × Tax Rate)
|
||||
(Taxes cannot be negative; losses create NOL asset instead)
|
||||
|
||||
DEFERRED TAX ASSET (DTA) FOR NOL
|
||||
|
||||
DTA - NOL Carryforward = Ending NOL Balance × Tax Rate
|
||||
ΔDTA = Current DTA - Prior DTA
|
||||
(Increase in DTA = non-cash benefit on CF)
|
||||
(Decrease in DTA = non-cash expense on CF)
|
||||
```
|
||||
|
||||
## Balance Sheet Structure
|
||||
|
||||
```
|
||||
ASSETS
|
||||
Cash (from CF ending cash)
|
||||
Accounts Receivable (from WC)
|
||||
Inventory (from WC)
|
||||
Total Current Assets
|
||||
|
||||
PP&E, Net (from DA)
|
||||
Deferred Tax Asset - NOL (from NOL schedule)
|
||||
Total Non-Current Assets
|
||||
Total Assets
|
||||
|
||||
LIABILITIES
|
||||
Accounts Payable (from WC)
|
||||
Current Portion of Debt (from Debt)
|
||||
Total Current Liabilities
|
||||
|
||||
Long-Term Debt (from Debt)
|
||||
Total Liabilities
|
||||
|
||||
EQUITY
|
||||
Common Stock
|
||||
Retained Earnings (from RE schedule)
|
||||
Total Equity
|
||||
|
||||
CHECK: Assets - Liabilities - Equity = 0
|
||||
```
|
||||
|
||||
## Cash Flow Statement Structure
|
||||
|
||||
```
|
||||
CASH FROM OPERATIONS (CFO)
|
||||
Net Income (LINK: IS)
|
||||
+ D&A (LINK: DA schedule)
|
||||
+ Stock-Based Compensation (SBC) (LINK: IS or Assumptions)
|
||||
- ΔDTA (Deferred Tax Asset) (LINK: NOL schedule; increase in DTA = use of cash)
|
||||
- ΔAR (LINK: WC)
|
||||
- ΔInventory (LINK: WC)
|
||||
+ ΔAP (LINK: WC)
|
||||
= CFO
|
||||
|
||||
CASH FROM INVESTING (CFI)
|
||||
- CapEx (LINK: DA schedule)
|
||||
= CFI
|
||||
|
||||
CASH FROM FINANCING (CFF)
|
||||
+ Debt Issuance (LINK: Debt)
|
||||
- Debt Repayment (LINK: Debt)
|
||||
+ Equity Issuance (LINK: BS Common Stock/APIC)
|
||||
- Dividends (LINK: RE schedule)
|
||||
= CFF
|
||||
|
||||
Net Change in Cash = CFO + CFI + CFF
|
||||
Beginning Cash
|
||||
+ Net Change in Cash
|
||||
= Ending Cash (LINK TO: BS Cash)
|
||||
```
|
||||
|
||||
## Income Statement Structure
|
||||
|
||||
```
|
||||
Net Revenue
|
||||
Growth %
|
||||
(-) Cost of Revenue
|
||||
% of Net Revenue
|
||||
────────────────
|
||||
Gross Profit (= Net Revenue - Cost of Revenue)
|
||||
Gross Margin %
|
||||
|
||||
(-) S&M
|
||||
% of Net Revenue
|
||||
(-) G&A
|
||||
% of Net Revenue
|
||||
(-) R&D
|
||||
% of Net Revenue
|
||||
(-) D&A
|
||||
(-) SBC
|
||||
% of Net Revenue
|
||||
────────────────
|
||||
EBIT
|
||||
EBIT Margin %
|
||||
|
||||
EBITDA
|
||||
EBITDA Margin %
|
||||
|
||||
(-) Interest Expense
|
||||
────────────────
|
||||
EBT (Pre-Tax Income)
|
||||
(-) NOL Utilization (from NOL schedule, reduces taxable income)
|
||||
────────────────
|
||||
Taxable Income
|
||||
(-) Taxes (Taxable Income × Tax Rate)
|
||||
────────────────
|
||||
Net Income
|
||||
Net Income Margin %
|
||||
```
|
||||
|
||||
## Check Formulas
|
||||
|
||||
```
|
||||
BS Balance Check: = Assets - Liabilities - Equity (must = 0)
|
||||
Cash Tie-Out: = BS Cash - CF Ending Cash (must = 0)
|
||||
RE Roll-Forward: = Prior RE + NI + SBC - Div - BS RE (must = 0)
|
||||
DTA Tie-Out: = NOL Schedule DTA - BS DTA (must = 0)
|
||||
Equity Raise Tie-Out: = ΔCommon Stock/APIC (BS) - Equity Issuance (CFF) (must = 0)
|
||||
Year 0 Equity Tie-Out: = Equity Raised (Year 0) - Beginning Equity (Year 1) (must = 0)
|
||||
Cash Monthly vs Annual: = Closing Cash (Monthly) - Closing Cash (Annual) (must = 0)
|
||||
NOL Utilization Cap: = NOL Utilized ≤ EBT × 80% (must be TRUE for post-2017)
|
||||
NOL Non-Negative: = Ending NOL Balance ≥ 0 (must be TRUE)
|
||||
NOL Starting Balance: = Beginning NOL (Year 1) = 0 (must be TRUE for new business)
|
||||
NOL Accumulation: = NOL increases only when EBT < 0 (losses generate NOL)
|
||||
```
|
||||
|
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@ -0,0 +1,125 @@
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# SEC Filings Data Extraction Reference
|
||||
|
||||
**When to Use:** Only reference this file when a model template specifically requires pulling data from SEC filings (10-K, 10-Q). For templates that provide data directly or use other data sources, this reference is not needed.
|
||||
|
||||
---
|
||||
|
||||
## Extracting Data from SEC Filings (10-K / 10-Q)
|
||||
|
||||
When populating a model template with public company data, extract financials directly from SEC filings.
|
||||
|
||||
### Step 1: Locate the Filing
|
||||
|
||||
1. Use SEC EDGAR: `https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=[TICKER]&type=10-K`
|
||||
2. For quarterly data, use `type=10-Q`
|
||||
|
||||
### Step 2: Identify Filing Currency
|
||||
|
||||
Before extracting data, identify the reporting currency:
|
||||
- Check the cover page or header for reporting currency
|
||||
- Look at statement headers (e.g., "in thousands of U.S. dollars")
|
||||
- Review Note 1 (Summary of Significant Accounting Policies)
|
||||
|
||||
**Common Currency Indicators**
|
||||
|
||||
| Indicator | Currency |
|
||||
|-----------|----------|
|
||||
| $, USD | US Dollar |
|
||||
| €, EUR | Euro |
|
||||
| £, GBP | British Pound |
|
||||
| ¥, JPY | Japanese Yen |
|
||||
| ¥, CNY, RMB | Chinese Yuan |
|
||||
| CHF | Swiss Franc |
|
||||
| CAD, C$ | Canadian Dollar |
|
||||
|
||||
Set model currency to match filing; document in Assumptions tab.
|
||||
|
||||
### Step 3: Navigate to Financial Statements
|
||||
|
||||
Within the 10-K or 10-Q, locate:
|
||||
- **Item 8** (10-K) or **Item 1** (10-Q): Financial Statements
|
||||
- Key sections to extract:
|
||||
- Consolidated Statements of Operations (Income Statement)
|
||||
- Consolidated Balance Sheets
|
||||
- Consolidated Statements of Cash Flows
|
||||
- Notes to Financial Statements (for schedule details)
|
||||
|
||||
### Step 4: Data Extraction Mapping
|
||||
|
||||
**Income Statement (from Consolidated Statements of Operations)**
|
||||
|
||||
| Filing Line Item | Model Line Item |
|
||||
|------------------|-----------------|
|
||||
| Net revenues / Net sales | Revenue |
|
||||
| Cost of goods sold | COGS |
|
||||
| Selling, general and administrative | SG&A |
|
||||
| Depreciation and amortization | D&A |
|
||||
| Interest expense, net | Interest Expense |
|
||||
| Income tax expense | Taxes |
|
||||
| Net income | Net Income |
|
||||
|
||||
**Balance Sheet (from Consolidated Balance Sheets)**
|
||||
|
||||
| Filing Line Item | Model Line Item |
|
||||
|------------------|-----------------|
|
||||
| Cash and cash equivalents | Cash |
|
||||
| Accounts receivable, net | AR |
|
||||
| Inventories | Inventory |
|
||||
| Property, plant and equipment, net | PP&E (Net) |
|
||||
| Total assets | Total Assets |
|
||||
| Accounts payable | AP |
|
||||
| Short-term debt / Current portion of LT debt | Current Debt |
|
||||
| Long-term debt | LT Debt |
|
||||
| Retained earnings | Retained Earnings |
|
||||
| Total stockholders' equity | Total Equity |
|
||||
|
||||
**Cash Flow Statement (from Consolidated Statements of Cash Flows)**
|
||||
|
||||
| Filing Line Item | Model Line Item |
|
||||
|------------------|-----------------|
|
||||
| Net income | Net Income |
|
||||
| Depreciation and amortization | D&A |
|
||||
| Changes in accounts receivable | ΔAR |
|
||||
| Changes in inventories | ΔInventory |
|
||||
| Changes in accounts payable | ΔAP |
|
||||
| Capital expenditures | CapEx |
|
||||
| Proceeds from issuance of common stock | Equity Issuance |
|
||||
| Proceeds from / Repayments of debt | Debt activity |
|
||||
| Dividends paid | Dividends |
|
||||
|
||||
### Step 5: Extract Supporting Detail from Notes
|
||||
|
||||
For schedules, pull from Notes to Financial Statements:
|
||||
- **Note: Debt** → Maturity schedule, interest rates, covenants
|
||||
- **Note: Property, Plant & Equipment** → Gross PP&E, accumulated depreciation, useful lives
|
||||
- **Note: Revenue** → Segment breakdowns, geographic splits
|
||||
- **Note: Leases** → Operating vs. finance lease obligations
|
||||
|
||||
### Step 6: Historical Data Requirements
|
||||
|
||||
Extract 3 years of historical data minimum:
|
||||
- 10-K provides 3 years of IS/CF, 2 years of BS
|
||||
- For 3rd year BS, pull from prior year's 10-K
|
||||
- Use 10-Qs to fill in quarterly granularity if needed
|
||||
|
||||
### Data Extraction Checklist
|
||||
|
||||
- Identify reporting currency and scale (thousands, millions)
|
||||
- 3 years historical Income Statement
|
||||
- 3 years historical Cash Flow Statement
|
||||
- 3 years historical Balance Sheet
|
||||
- Verify IS Net Income = CF starting Net Income (each year)
|
||||
- Verify BS Cash = CF Ending Cash (each year)
|
||||
- Extract debt maturity schedule from notes
|
||||
- Extract D&A detail or useful life assumptions
|
||||
- Note any non-recurring / one-time items to normalize
|
||||
|
||||
### Handling Common Filing Variations
|
||||
|
||||
| Variation | How to Handle |
|
||||
|-----------|---------------|
|
||||
| D&A embedded in COGS/SG&A | Pull D&A from Cash Flow Statement |
|
||||
| "Other" line items are material | Check notes for breakdown |
|
||||
| Restatements | Use restated figures, note in assumptions |
|
||||
| Fiscal year ≠ calendar year | Label with fiscal year end (e.g., FYE Jan 2025) |
|
||||
| Non-USD reporting currency | Adapt model currency to match filing |
|
||||
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