Financial forecasting is the process of estimating or predicting how
a business will perform in the future. The most common type of financial
forecast is an income statement, however, in a complete financial model;
all three financial statements are forecasted.
In the 3 statements model the income statement,
balance sheet, and cash flow are dynamically
linked with formulas in Excel. 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. Its important
to know how to link the 3 financial statements, which requires a solid
foundation of accounting, finance, and Excel skills