Three-Statement Financial Model for, Inc.

This three-statement model for, Inc. will be used in the next installment of the Integrating Financial Statements series. While I have not typically posted a work in progress, I believe this will be helpful to ASM visitors in the interim.

The objective of the lesson that follows the Integrating Financial Statements model, which focuses on projecting stockholders’ equity, is to demonstrate that there are many ways to manage the assumptions and drivers for the balance sheet. In contrast to the model for Home Depot, which models each debt tranche, the model for holds debt constant, thereby eliminating the need for a supporting debt schedule. The interest rate used in the projected periods is backed out from the most recent historical period as the quotient of interest expense and total debt.

This approach would be more common at a buy-side firm (such as a hedge fund). Unless you are engaged by the company, as an investment banker for example, it is unlikely that you would have sufficient data to project each tranche of debt individually. The challenge is that annual reports generally only disclose when the balance comes due, but not whether or not the company intends to refinance. As such, if you were to only model what information you have, then you assume most companies pay down debt as it comes due in the projected years (assuming they have the cash balance to meet that obligation without refinancing).


This next installment in the Integrating Financial Statements series is still primarily focused on the mechanics of building a three-statement model, and does not focus on assumptions or drivers. Everything is projected using historical averages. It follows that this model should absolutely not be used to arrive at a valuation of, Inc.

The model does not project capital leases or finance leases.

Additional Information:

Because the company relies so heavily on Restricted Stock Units (RSU) to compensate employees, I added a tab explaining how restricted stock and restricted stock units work, which pulls from PWC’s publication PWC Accounting Guide to Stock Based Compensation (Second Edition).

ASM Visitors: If you have any comments or suggestions related to the model, please feel free to reach out via the contact page.

Download Financial Model:, Inc.