Learn more: Download the DCF model template. In this section, the cash flows that were calculated above are being discounted by the calculated WACC. Here is a screenshot of the discounting cash flows section in a DCF model. These types of financial models are used in equity research and other areas of the capital markets. The DCF model takes the cash flows from the three-statement model, makes some adjustments where necessary, and then uses the XNPV function in Excel to discount the cash flows back to today at the company’s Weighted Average Cost of Capital ( WACC ). The DCF model builds on the three-statement model to value a company based on the Net Present Value (NPV) of the business’s future cash flow. Learn more: Download CFI’s three-statement financial model. See our free webinar on how to build a three-statement model. Each of the other sections can easily be expanded or contracted to view sections of the model independently. Here is a screenshot of the balance sheet section of a three-statement single worksheet model. Learn the foundations in our online financial modeling courses. It’s important to know how to link the three financial statements, which requires a solid foundation of accounting, finance and Excel skills. The objective is to set it up so all the accounts are connected and a set of assumptions can drive changes in the entire model. As the name implies, the three statements (income statement, balance sheet, and cash flow) are all dynamically linked with formulas in Excel. The three-statement model is the most basic setup for financial modeling.

If you’d like to have the templates, you can always download our financial models. The key to being able to model effectively is to have good templates and a solid understanding of corporate finance, as covered in our courses. To learn more about each of the types of financial models and to perform detailed financial analysis, we have laid out detailed descriptions with relevant screenshots below.

The key to being able to model effectively is to have good templates and a solid understanding of accounting and corporate finance.

You can download many of our pre-built templates to upskill your financial modeling capabilities.

The ten most common financial models are used by investment bankers, research analysts, private equity professionals and other corporate finance professionals.

Project financial modeling