Here are some tips for building a model in Excel:
1. Write down your assumptions on a separate worksheet or in Word.
2. Develop formulas and links that carry through all the sections of your workbook.
3. Do your homework -- research the marketplace to understand volumes, prices, costs, etc.
4. Divide your workbook by worksheets (using the tabs at the bottom of the page):
- One summary sheet that is the profit and loss statement
- A Revenue sheet that has all the revenue, cost of goods sold and gross profit assumptions -- metrics, sources, prices, quantities, growth rates, etc.
- An Expenses sheet that has all of your overhead expenses.
- A Capital Expenditures Sheet
- A Depreciation Schedule.
5. Make sure you construct your formulas to carry from page to page. That way, if you change a revenue assumption, it shows up on the profit and loss sheet. This makes it easier to try out different scenarios.
I'll write more about financial statements later.
Please post questions or send me comments -- email@example.com