Milestone map
Milestone map
3 milestones
Source and Structure Public Financial Data
2 weeks
Select a publicly listed company and download three full years of income statement, balance sheet, and cash flow statement data from public filings. Build a clean historical data model in a spreadsheet with consistent formatting, correct line-item labelling, and a colour-coded input/formula structure (blue cells for hard-coded inputs, black for formulas). Verify that your historical cash flow statement reconciles with the balance sheet — cash ending balance must match in both.
Proof required
Submit your spreadsheet (or a shareable link) with three years of historical three-statement data for a named publicly listed company. The spreadsheet must show: (a) income statement, balance sheet, and cash flow statement on separate tabs, (b) a reconciliation check (cash balance cross-checks between BS and CFS), and (c) correct accounting equation balance (Assets = Liabilities + Equity) for each year. Cite the specific filings used (SEC EDGAR or company IR page, with filing date).
What gets checked
- Balance sheet balances for all three historical years — Assets = Liabilities + Equity with zero or explained rounding error
- Cash flow statement reconciles to balance sheet ending cash balance for all three years
- Input/formula colour-coding is applied consistently — hard-coded numbers are visually distinguishable from formula-driven cells
Common mistakes
- Balance sheet does not balance — this indicates a structural error in the model, usually a misclassified line item
- Cash flow statement is built from scratch rather than reconciling to the income statement and balance sheet changes — the indirect method must flow from net income
Resources
What a verifier looks for
- You are a finance professional reviewing a financial model. Open the spreadsheet and check the balance sheet balance equation for each historical year first — if it does not balance, the model has a structural error.
- Then check the cash flow statement: the ending cash balance on the CFS must match the cash line on the balance sheet for each year.
- Ask the submitter to explain how net income flows into operating cash flow — they should walk you through the indirect method without consulting notes.
Build Forward-Looking Projections with Documented Assumptions
2–3 weeks
Extend the historical model with three-year forward projections. Every projected line item must be driven by an explicit assumption (revenue growth rate, margin expansion/contraction, working capital ratios, capex as % of revenue). Create a dedicated Assumptions tab that documents each driver with its current value, source or rationale, and sensitivity range. The model must remain fully linked — changing an assumption cell must ripple through all three statements.
Proof required
Submit the updated spreadsheet with projections for three future years. The Assumptions tab must contain at least eight named drivers (e.g., revenue growth %, gross margin %, SG&A %, capex %, D&A %, receivables days, payables days, tax rate). For each driver, provide one sentence explaining your rationale (e.g., 'Revenue growth 8% — consistent with 3-year average and management guidance'). A finance professional must sign off that the model is fully linked and the assumptions are reasonable and documented.
What gets checked
- All eight minimum drivers are named with rationale — no undocumented hard-coded numbers in the projection period
- Model remains balanced (Assets = Liabilities + Equity) in all three projected years
- Changing one assumption cell (e.g., revenue growth rate) causes all three statements to update automatically — manual overrides in the projection columns are not permitted
Common mistakes
- Projection period has hard-coded numbers (not formula-driven) — this breaks the model's integrity and means changing assumptions has no effect
- Working capital is not modelled properly — receivables, payables, and inventory must be driven by days-based ratios, not simply grown at a flat rate
Resources
What a verifier looks for
- Your role is to check model integrity and assumption quality. Change one input assumption (e.g., set revenue growth to 0%) and confirm all three statements update — if any statement has manually overridden cells, the model fails the linkage test.
- Review the Assumptions tab: every driver must have a stated rationale. 'Management guidance' and 'historical average' are acceptable rationales if sourced. 'Estimate' with no basis is not.
- Ask: 'Walk me through how revenue growth flows into free cash flow.' The submitter should be able to trace the linkage through margin → EBITDA → EBIT → net income → operating cash flow → free cash flow without stopping.
Sensitivity Analysis and Expert Model Review
1–2 weeks
Build a two-variable sensitivity analysis table (data table) showing how a key output (e.g., net income, free cash flow, or EV/EBITDA multiple) changes across a matrix of assumption scenarios. Present the completed model to a finance professional for a technical review, walk them through the model structure and key assumptions, and document their feedback and any revisions made.
Proof required
Submit: (a) the final model with at least one two-variable sensitivity table (minimum 5×5 grid), (b) a written model review memo from a finance professional (minimum 150 words) identifying the model's strengths, at least one structural or assumption concern, and any revisions recommended, and (c) a change log (minimum 3 entries) documenting revisions made in response to the review. The reviewer must be identifiable — name, title or professional background, and date of review.
What gets checked
- Sensitivity table uses a real Excel or Sheets data table (not manually calculated) — changing a base assumption must update the table automatically
- Reviewer memo names at least one specific concern — 'looks good' is not a passing review
- Change log shows that reviewer feedback was acted upon, not just received
Common mistakes
- Sensitivity analysis shows only upside scenarios — the table should include realistic downside cases (e.g., 0% and negative revenue growth)
- Reviewer is a peer with no finance background — the review must come from someone who has built or used financial models professionally
Resources
What a verifier looks for
- You are reviewing a financial model built by the submitter. Your written memo must be substantive — identify at least one specific assumption you would challenge (e.g., 'Revenue growth of 15% in year 3 appears aggressive given the industry average of 7%') and at least one structural observation (e.g., 'Working capital ratios should be tied to revenue, not modelled as flat dollar amounts').
- The submitter must show you the sensitivity table and explain what the two variables represent and why they were chosen. If they cannot explain the table's mechanics, the model may have been built by following a template without understanding.
- Sign and date your memo and provide your professional title or context so the submitter can include it as verifiable proof.