Planning
A three-statement model that actually balances.
Twelve months of P&L, cash flow and balance sheet, driven off one assumptions tab and linked all the way through.
Twelve months of P&L, cash flow and balance sheet, driven off one assumptions tab and linked all the way through.
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Three-statement financial model
Excel (.xlsx) · 4 tabs · 12 months · no email required
What is in the file
Most startup models are a revenue forecast with some costs underneath. That is a P&L, not a model, and it will tell you confidently that you are profitable in month nine while saying nothing about the fact that you ran out of cash in month six because your customers pay on 60-day terms.
A three-statement model links the profit and loss to the cash flow statement and both to the balance sheet. The balance sheet is what makes it trustworthy: if assets do not equal liabilities plus equity, something is wrong, and the model tells you so.
The check row at the bottom of the balance sheet subtracts liabilities plus equity from total assets. It must read zero. If you change something and it stops reading zero, you have broken a link — and you have found out immediately rather than in a board meeting.
In practice three inputs dominate everything else in a model at this stage.
| Assumption | Why it dominates | Where founders get it wrong |
|---|---|---|
| Monthly churn | Compounds against growth every month | Using logo churn when the business runs on revenue churn, or quoting an annual figure in a monthly cell |
| Days sales outstanding | Decides whether profit ever becomes cash | Assuming customers pay on the terms printed on the invoice |
| Headcount timing | Salary is the largest cost in almost every plan | Hiring everyone in month one because the plan says the year needs them |
The default assumptions in the file describe a company that turns profitable around month eight and never runs out of cash. Change days sales outstanding from 45 to 90 and the profit line does not move at all — every month still shows the same net income. The cash line falls by roughly a month and a half of revenue and stays there.
That is the whole reason to build three statements instead of one. Profitability and solvency are different questions, and companies fail on the second one while the first still looks fine.
Save three copies — the plan, a version where growth is a third slower, and a version where it is half. The useful output is not the forecast, it is the month in which each version runs out of money. That spread tells you how much rope you actually have, and it is the only version of the model a good investor will ask about.
There is no cap table, no deferred revenue schedule, no multi-entity consolidation and no debt schedule beyond a single balance. Those belong in a model built for a specific transaction, and adding them here would make the file harder to check without making the answer better. If you need a cap table with a dilution waterfall, that is a separate template.