Milestone map
Milestone map
3 milestones
Build a Three-Statement Financial Model
4–6 weeks (10–20 hrs depending on complexity)
Build a full three-statement financial model (income statement, balance sheet, and cash flow statement) for a real company using its public filings (annual report / 10-K / 20-F), or for a real business you have access to (your employer, a client, or your own). The model must be integrated — changes to revenue assumptions flow through to net income, to the balance sheet, and to the cash flow statement. It must also include a 3-year forecast with at least 3 clearly named and documented assumptions (revenue growth rate, gross margin, capex).
Proof required
Submit a Google Sheets or Excel file with the three statements, the integration checks (cash flow from balance sheet movement matches balance sheet change), and a separate assumptions tab naming and explaining the basis for each forecast assumption. Submit a 150-word note explaining which company you modelled and where you sourced the historical figures.
What gets checked
- Integration check passes — the ending cash balance on the cash flow statement matches the cash balance on the balance sheet for each period modelled
- Assumptions tab names the basis for each assumption ('revenue growth of 8% based on 3-year average CAGR from FY2021–FY2023') not just the value
- Historical figures match the published financial statements — pick 2 line items and verify them against the source filing
Resources
Foundationstart here
Depthgo deeper
What a verifier looks for
- Change one revenue assumption and confirm the cash position on the cash flow statement changes — this is the single test that proves integration
- Ask the submitter to explain the rationale for the largest single assumption (typically revenue growth) — the answer reveals whether the model was built with financial judgement or just filled with round numbers
- Pick one historical line item (e.g. gross profit) and ask the submitter to show you where it comes from in the source filing — this confirms the model was built from primary sources
- Ask what would change the most important assumption — this tests whether the submitter understands the business, not just the accounting
- A model where the three statements are separate tables with manual links rather than formula-driven integration — if changing a revenue assumption requires updating 4 separate cells manually, the model is not integrated
- Assumptions that are not explained ('revenue growth: 10%') — every assumption must be tied to a rationale (historical trend, industry benchmark, management guidance)
- Using a simplified model template without building it from scratch — the learning value is in constructing the integration, not in filling in a pre-built template
Produce an Investment Thesis with Supporting Analysis
4–6 weeks (10–15 hrs)
Produce a full investment thesis for a real equity, bond, or private company — a written argument for why someone should or should not invest in this asset, with supporting quantitative analysis (relative valuation, DCF estimate, or comparable transaction analysis). The thesis must reach a verdict (buy / hold / sell or invest / pass) with a price target or valuation range and must identify the 3 most important risks that could make the thesis wrong.
Proof required
Submit the investment thesis document (500–1,000 words): company description, investment thesis summary, key financial metrics compared to at least 2 peers, a valuation summary (method, key assumptions, and output), 3 named risks with a sentence on each, and the verdict with price target or valuation range. Include the supporting valuation analysis as a separate file or tab.
What gets checked
- Valuation is method-transparent — the document names the method used (P/E multiple, EV/EBITDA, or DCF) and the key inputs; 'it looks undervalued' is not a valuation
- 3 risks are genuinely adverse to the thesis — not boilerplate risks ('interest rates may change'); risks that would specifically and materially damage this company's specific thesis
- Price target is a number or range, not a direction — 'bullish' is not a price target; '£12.50–£15.00 per share (20–40% upside from current £10.75)' is
Resources
Foundationstart here
Depthgo deeper
What a verifier looks for
- Ask the submitter to name the single biggest risk to their thesis and what evidence would cause them to change the verdict — this tests whether the thesis was genuinely stress-tested
- Check the price target: ask the submitter to walk through the valuation calculation step by step — if they cannot reproduce it from memory, the model was not built with deep understanding
- Ask what the most important assumption in the valuation is and what a 20% change in that assumption would do to the price target — this tests sensitivity analysis understanding
- Ask what the submitter would need to see in the next earnings report to confirm or reject the thesis — this tests whether the thesis is predictive, not just descriptive
- A thesis that describes the company without making a clear verdict — an investment thesis that ends with 'there are opportunities and risks on both sides' has not done the synthesis work
- Risks that are symmetric with the opportunity rather than genuinely adverse — 'if revenue grows faster than expected, the valuation looks cheap; if slower, expensive' is not a risk thesis
- Valuation based on a single multiple with no sensitivity analysis — real financial analysis shows how the valuation changes under different assumptions
Defend Your Analysis to a Senior Finance Professional
1–2 weeks (60–90 min session)
Present your M1 model and M2 thesis to a qualified reviewer: a senior financial analyst, associate or above at an investment bank or asset manager, or a CFO / FD with 5+ years of financial analysis experience. The reviewer challenges the key model assumption (why this growth rate?), the valuation method (why P/E over EV/EBITDA for this company?), and the thesis verdict (what would change your mind?). The reviewer presents a novel scenario — a macro change or company-specific event — and asks you to reason through its impact on your model live.
Proof required
Submit your M1 model and M2 thesis plus the reviewer's written assessment: the model assumption challenge and response, the valuation method challenge and response, the what-would-change-your-mind response, the novel scenario and your live impact analysis, and their sign-off confirming their role and a live session.
What gets checked
- Valuation method challenge response names the specific reason this method is more appropriate than the alternative for this company (e.g. 'P/E is not useful for this company because it has negative earnings; EV/EBITDA is more appropriate for capital-intensive businesses at this stage')
- Novel scenario live analysis names specific line items and directions — 'a 200bps interest rate increase would increase interest expense by approximately £X because this company has £Y of floating rate debt'
- Reviewer sign-off confirms 5+ years in financial analysis (not accounting or financial reporting only)
Resources
Foundationstart here
What a verifier looks for
- Prepare the novel scenario by identifying one real macro event or company-specific risk relevant to the submitter's company — it should be something that requires adjusting specific line items in the model
- The what-would-change-your-mind question is the most important — the answer reveals whether the submitter has a falsifiable thesis or a post-rationalisation
- Reviewer minimum qualification: 5+ years of investment analysis (buy-side or sell-side) or CFO/FD experience with direct accountability for financial projections
- Ask the submitter what they now know about the company that they did not know when they started M1 — this tests whether the modelling process produced genuine business understanding
- Valuation method challenge response that defends the method without engaging with the specific counter-argument — the reviewer is testing understanding of why different methods suit different situations
- Novel scenario analysis that is directional ('it would hurt revenue') without naming specific amounts or line items
- A reviewer who is an accountant or finance manager without investment analysis experience — the challenge questions require someone who has built and defended investment cases