Adding visuals to a financial model

While there a lot of different ways to build financial models, one of the great features that's unique to Excel is the ease of adding graphics, right? We all know that while numbers are interesting, there's an awful lot of business people out there that really rely on graphics to give them a quick and easy way to evaluate what's going on with the business. 

Well, let's take a look at how we can add those kinds of graphics to our financial model in Excel. I'm in the 03_03_Begin Excel file. Now what we have here is our three-statement model based on our financial assumptions, and we've gone through and modified this based on our own individual forecasts, including, say, a recession in 2019 and 2020 as well as more basic assumptions around, say, the cost the firm will face being a simple average of historical costs. Now what we want to do is add a graphic that shows how the profits and revenues of the firm are going to change over time. To do that, we'll need to select the data that we're interested in including. So I'm going to pull data from different sections of the financial model, and I'm going to do this by holding down the Control key while highlighting or selecting different rows. Try it with me while I do this. So I'm going to pick net income, revenue, COGS, and what the heck, let's also pull something from the Balance Sheet. Let's take our total assets over time, as well. So now we've got these four figures, and we want to see how they're going to change over time. So we're going to insert a line graph, and we'll put this up at the top. And I'm simply going to to title this Firm Financials 10 Year. Now, we can see we've got Total Assets in yellow, and those are growing quite quickly, Revenues in blue, COGS in orange, Net Income in gray. The horizontal axis, however, is not necessarily all that descriptive. We really want to have a date for that axis. So I'm going to select the data that's being used, and I'm going to choose my horizontal axis based on these years across the top. I'm going to do that and select OK, and now we get a sense for how the graph is changing over time. Now, perhaps we're not happy about the yellow line here, right? It's kind of distorting our view on what's going on with the rest of the data. Well, we can affect that by selecting our data and then removing Total Assets from the equation. Now, we have a chart that shows us the firm financials based simply on revenue COGS and net income, and we could add a second chart showing, say, our assets and liabilities over time. At this point, you should now be prepared to add in graphics to make your financial models more intelligible and easier to read.