Modeling Financial Statements: B10.3304


Disclaimers Prerequisites Bio Overview Help Materials Assignments Grading Schedule


Please sign up for Stern Capital IQ access before the start of the class. Please contact Stern IT on how to do that. I am not involved in any way in this process regardless of what you are told by others in the school. They should not be directing you to. Please look into this at least two weeks before the course starts because sometimes the registration process can take a while.

Video introduction as suggested by the Stern School

From a former student

"It's funny that I used to think your class was a lot of work... real work is a lot of work!" This class prepares you for the real world. Make sure you are ready!


Various management disciplines teach you how to analyze and forecast parts of a business. Building on this foundation, this course will help you weave your forecasts into coherent spreadsheet-based pro-forma financials. Modeling and projecting comprehensive financial statements provides a reality check on the forecasts, enables "what if" analysis, provides an integrated view of the business, and is a key step in valuation.


The course will start from conceptual examples that illustrate the key intuition and explain linkages between financial statements. It will then build on these examples to forecast the financial statements of real companies.


This course is highly relevant to if you are pursuing any career that requires you to understand or build models. Examples of such careers are investment banking, private equity, buy-side or sell-side research, credit research, corporate finance, and valuation. First year and second year students can both take this course. Those who took it in their first year have told me that this course gave them a significant competitive edge during their interviews and summer internships.



Help and Office

Materials and Course Design


Exams and Grading

Important computer tips for the final



Module Topic
  • Deriving cash flows, enterprise or unlevered cash flows
  • Building blocks of models; Linking cash flow forecasts to value
  • Designing models, Customers; Suppliers, employees, and other expenses
  • Multiperiod models: Long-term accruals and deferrals
  • Excel tools for scenario analysis; Capacity: PP&E and depreciation
  • Modeling taxes
  • Modeling financing, Time value of money and bonds
  • Integrative analysis
  • Which cash flows should one discount, Integrated models, Prioritizing assumptions in models; sensitivity analysis
  • Adjusting models for capitalized leases
  • Mergers and acquisitions