Neu Thinking


- logical and elegant, yet dynamic and meaningful


We use practical applications of accounting, Excel, finance, financial modeling, valuation, presentations, and other critical skills to create industry standard well-presented financial models that are simple enough for anyone to understand, yet dynamic enough to handle complex situations. 


The 3 statement model is the most basic setup for financial modeling. As the name implies, in this model the three statements (income statement, balance sheet, and cash flow) are all 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. It’s important to know how to link the 3 financial statements, which requires a solid foundation of accounting, finance, and Excel skills.

Examples include:

  • Annual Budget Model: This model is used in financial planning & analysis to get the budget together for the coming years. Budget models are typically designed to be based on monthly or quarterly figures and focus heavily on the income statement

  • Rolling Forecast Model: This type is also used in financial planning and analysis (FP&A) to build a forecast that compares to the budget model. Sometimes the budget and forecast models are one combined workbook and sometimes they are totally separate.


Discounted Cash Flow (DCF) Model

The DCF model builds on the 3 statement model to value a company based on the Net Present Value (NPV) of the business’ future cash flow. The DCF model takes the cash flows from the 3 statement model, makes some adjustments where necessary, and then uses the XNPV function in Excel to discount them back to today at the company’s Weighted Average Cost of Capital (WACC).

Sum of the Parts Model

This type of model is built by taking several DCF models and adding them together. Next, any additional components of the business that might not be suitable for a DCF analysis (e.g., marketable securities, which would be valued based on the market) are added to that value of the business.  So, for example, you would sum up (hence “Sum of the Parts”) the value of business unit A, business unit B, and investments C, minus liabilities D to arrive at the Net Asset Value for the company.

Consolidation Model

This type of model includes multiple business units added into one single model. Typically, each business unit has its own tab, with a consolidation tab that simply sums up the other business units.  This is similar to a Sum of the Parts exercise where Division A and Division B are added together and a new, consolidated worksheet is created.


These include, but not limited to:

  • Scenario modelling
  • Sensitivity (direct and indirect) analysis
  • Debt Term Sheet Effective Interest Rate & Warrant Modelling
  • Weighted Average Cost of Capital (WACC) Modelling
  • Earnout Modelling