Steve's Financial Modeling Tutorial

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Introduction
I created this website in the late 1990's. I don't even really know when. I was working for a boutique investment firm until 1998, so it was sometime prior to that. "Boutique investment firm" typically means a firm owned by a single individual, usually someone with a personality disorder (in this case, not me, and no, the firm isn't around any more. Go figure.). I dramatically updated this website in 2002. Then I ignored it for many years while I slaved away on my startup. When I sold LandAndFarm.com in July 2008 (woot!) this site went offline. It is now back due to emails from folks who said it was useful.

You can now buy my simple financial model. I encourage you to do it. The easiest way to learn about finance and financial modeling is to do some modeling yourself.

Download My Simple Financial Model - $9.95

I created this short course to help out some of my friends who had finance questions, but couldn't find simple answers anywhere. I'm not an accountant and I'm pretty stupid, and everything on this site is written for someone like me.

This is version 1.0. All errors are mine. If you rely solely on this site for financial decision-making, wow, you deserve whatever chaos ensues. Do not prepare food on this web-site. Here are the rules of finance:

Rule #1: You do not talk about Fight Club

Rule #2: You do not talk about Fight Club

Rule #3: Preparing financial statements and making financial models is an art. It is possible, even fun, to make financial statements say whatever you want. Bankrupt companies can look healthy. Healthy companies can look bankrupt. You can make a bad business plan have great numbers and a great business plan have bad numbers.

Millions of dollars are invested in crappy ideas with great numbers because investors know as little about financial models as anyone else. Creative accounting is the NORM, not the exception. If you don't believe me, ask Enron.

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A note on the spreadsheets seen on this website.

I used to use MS Excel for all my financial modeling. For a decade this was the case. However, with the ubiquitousness of cloud computing and the launch of Google docs, I have done modeling using the Google docs spreadsheet application with some success.

Use whatever works, but Excel is still the easiest.

The example spreadsheet was formerly on Google docs for free, but I now sell it so that I can pay bills and such. Having a spreadsheet like this will make your life easier. It's a learning tool plus a template for your first financial model.

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