Build a Powerful Income Statement Model from Scratch

by | Apr 29, 2024 | General BI and Data Management

Building a Powerful Income Statement Model from Scratch

We are kicking off this blog with a “building from scratch” theme.

Here, by “building from scratch” we mean what nearly every Finance person has done at some point: creating some kind of financial modeling structure for reporting, analytics and/or planning (e.g., budget/forecast planning).

And how do Finance professionals build these models?

All together now: IN EXCEL!

It may start simply, by obtaining a report from the ERP system—a report that, for all its formatting, is a data export. In other words, a data dump into a spreadsheet with figures that are reflective of only that moment in time. (A day later, any report made from this data will be out-of-date).

Maybe our Finance pro will want to add some personal-preference formatting…all well and good.

But in no time, because this is a Finance pro we’re speaking about, he or she will want to analyze how the data breaks down (or adds up) within the business enterprise….

What does this “report” mean? If it’s an all-company Income Statement, What are figures from different departments? How can one see how Departments aggregate…or how they compare? Or, for that matter, how to they stack up against different regions or different products.

These are but the first few steps in a nearly immeasurably larger project—once again, something almost every Finance person of any stripe has undertaken. And has done with Excel only as the modeling tool in question.

Among the massive downsides to building and maintaining a Finance model in Excel, there are:

  • This year physical effort organizing/modeling data
  • The enormous riskiness of keeping data in spreadsheets only
  • The untimeliness of the data
  • The inability to collaborate

Happily, there is a better way!—one that overturns all the difficulties bullet-pointed above, and which enables our Finance pro to continue to use Excel.

The key is the right technology that will “take the burden off Excel.”

We are developers of longstanding of just such a technology. Indeed our aim at PARIS Technologies has been to empower Finance pros to take control, and be vastly more productive in creating their own financial models.

To prove a point—that such a thing as “stating from scratch” in creating in Finance model of the business is actually possible, without grinding one’s self down to a nub—we are now offering a free version of our product, called PowerExcel Personal.

We would like to invite you, next, to watch a video in which our Finance pro, Gareth, guides you through the process of building an Income Statement model. Let’s dive in!


Building a Dynamic Income Statement Model with PARIS Technologies

Gareth Jones from PARIS Technologies introduces a step-by-step guide on building a powerful income statement model using the free version of PARIS Technology Power Excel. Here’s a quick overview:


1. Introduction

Free Technology: PARIS Technologies offers a free and powerful solution for building financial models.


2. Getting Started

Downloading Software: Users can download the free version and follow along with the video.


3. Creating a Cube

Graphical Interface: Use the graphical user interface to create a new database (e.g., P2) and define dimensions like accounts, departments, etc.

– **Building a Cube:** Combine dimensions to create a cube for data analysis.


4. Visualizing in Excel

Seamless Integration: Connect Excel to the database for easy visualization, filtering, and manipulation of data.


5. Adding Functionality

Enhancing Dimensions: Add functionality like parent-child relationships for versatile aggregations within the model.


6. Loading Data

Data Input: Paste data from Excel into the model, making monthly updates straightforward.


7. Planning

Scenario Planning: Easily plan for different scenarios by changing filters and versions within the model.


8. Advanced Calculations

Flexible Calculations: Explore advanced calculations, adapting to various accounting conventions.


9. Dynamic Updates

Real-time Data: Use formulas to dynamically close months and update data in real-time.


10. Conclusion

Efficient Financial Modeling: PARIS Technologies’ free Power Excel provides a robust solution for dynamic and efficient financial planning.

This concise guide empowers users to build a dynamic income statement model without watching the full video. Download the free software and start enhancing your financial modeling capabilities with PARIS Technologies.

Curious about PowerExcel Personal?

PowerExcel Personal is a great way to get hands-on with a PARIS product.  You’ll get the most benefit from using it if you connect with us while you try it, so make sure to schedule your free call without support team and get properly installed today!