A free 3-statement financial model template in Excel, with a complete worked case
A five-year forecast built from units and price, working capital on days, a revolver and a cash sweep, a DCF and a leveraged buyout run on the same operating plan: thirteen linked sheets, three scenarios, no macros.
The file carries one company, Alder Ridge Components, from two years of reported statements to a five-year forecast whose income statement, balance sheet and cash-flow statement tie to each other every year. The same operating plan is valued twice on the same numbers: a DCF discounts it to a $230.6 million enterprise value, and a leveraged buyout entering at 10.0x EBITDA with 4.5x of debt returns 2.35x and an 18.7% IRR to the sponsor. Fourteen checks read PASS in the base case and in both of the alternate scenarios.
Download the template
The complete model, no macros, nothing locked. No account, no email address.
The second file is the same model with its 693 formula cells emptied, for practising the build. It targets the identical answer: 2031 revenue $178.6 million, DCF enterprise value $230.6 million, LBO MOIC 2.35x.
What is in the file
Twelve working sheets behind a one-page summary, in the order the calculation runs. Inputs sit on Assumptions and Historical; everything else is a formula.
Assumptions
The active values every schedule reads for each forecast year, 2026 through 2031: growth, pricing, cost ratios, working-capital days, capital expenditure, tax and debt terms.
Historical
Two years of reported statements, the one-off plant consolidation cost added back, and the opening balance sheet the forecast starts from.
Scenarios
The selector and the three cases, base, downside and upside, with the adjustment applied to each and a stored comparison sitting next to the live result.
Operations
Three product lines, control modules, sensing arrays and service, built from units and price up to EBITDA.
Working Capital
Receivables, inventory and payables on days, and the change in net working capital that feeds the cash-flow statement.
Fixed Assets
Capital expenditure and depreciation, rolled forward to ending net PP&E.
Debt
Minimum cash, mandatory amortization, an optional sweep and a revolver drawn only when cash falls short, on the pre-deal balance sheet.
Statements
The income statement, balance sheet and an indirect cash-flow statement, checked against each other every year.
DCF
Unlevered free cash flow, a terminal value by perpetuity growth and by exit multiple side by side, and a WACC-and-growth sensitivity grid.
LBO
Sources and uses at entry, the exit bridge, MOIC and IRR, with the return split into EBITDA growth, multiple change and debt paydown.
LBO Debt
The acquisition debt from close to exit, a cash sweep above minimum cash, leverage and interest cover by year.
Checks
Fourteen checks, from the balance sheet to the scenario comparison, each with its status and any numeric difference.
What the worked case returns
Measure
Value
2026 revenue
$132.0m
2026 EBITDA
$22.5m
2031 revenue
$178.6m
2031 EBITDA
$39.6m
DCF enterprise value
$230.6m
DCF equity value
$209.4m
LBO entry leverage
4.5x EBITDA ($101.1m)
LBO sponsor equity at entry
$133.0m
LBO MOIC
2.35x
LBO IRR
18.7%
Read the DCF and the LBO side by side rather than as two independent answers. The DCF discounts the plan's own cash flow at a 10.0% WACC and 2.5% terminal growth to $230.6 million.
Value the same 2031 EBITDA at the LBO's own 9.0x exit multiple instead and the enterprise is worth $280.4 million, which is 6.97 times the terminal year's EBITDA on the perpetuity method, not the 9.0x the exit assumes.
Neither figure is wrong; they price the plan on two different assumptions about what happens after year five, and the gap between them is what the sensitivity grid on DCF is for.
Downside removes three points of growth and adds cost stickiness and the same LBO returns 0.82x with a negative IRR: the Scenarios sheet keeps that comparison live next to the base case.
How to use it on your own deal
Open Historical and Assumptions and overwrite them with your own two years of statements and your own growth, margin and working-capital days.
Set the Scenarios selector to 1, 2 or 3 and read the comparison table: it holds the last values pasted into it, so refresh it after a real change to the inputs.
Build the income statement before the balance sheet: Operations and Fixed Assets feed Statements, and Statements feeds both the DCF and the LBO.
Change the LBO's entry and exit multiples on the LBO sheet, and its leverage and interest rate on Assumptions; MOIC and IRR recompute immediately.
Keep the Checks sheet in view. A model this size either ties every year or it does not, and there is no partial credit for close.
Questions people ask about it
Is this 3-statement model really free?
Yes. It is a companion file to a book. There is no sign-up, no email address and no paid version.
Does it use macros or circular references?
No macros and no circular reference: interest on the debt and the revolver is charged on opening balances, which the model already knows at the start of each year. The file recalculates in Excel, LibreOffice or Google Sheets without iterative calculation.
Why do the DCF and the LBO give two different valuations for the same company?
They price different things. The DCF discounts unlevered free cash flow at a 10.0% WACC and prints a 230.6 million enterprise value; the LBO prices the same operating plan with debt in it and a fixed 9.0x exit multiple, returning 2.35x to the sponsor over five years. The two are not meant to tie: discounting the DCF's own 9.0x exit gives 280.4 million, which is 6.97x the perpetuity method's own terminal-year EBITDA, not the 9.0x the LBO assumes. The gap between the two methods is the finding, not a mistake in either one.
Can I use it for a real transaction?
You can reuse the structure. The company, its products and every figure in the file are fictional, and nothing here is investment advice.
The rest of the files
This template is two of the four companion files for Financial Modeling from First Principles: the full set adds
an error lab with eight switchable defects to find, and a timed ninety-minute test with its own answer key. Free, like this one.