Understanding how a financial model is structured: from specification and inputs through the core statements to analysis and scenarios.

Anatomy of a Model

The flowchart below shows the two main phases—Building the model and Analysing the model outputs—and how the pieces connect. The numbers in each box indicate the typical sequence; grey arrows show inputs, and coloured arrows show the links and feedback between the Income Statement, Cash Flow, and Balance Sheet.

Building the model

The left side of the diagram describes how the model is built:

• Specification (1): Define the business case and scope—what the model is for and over what period.
• Input (2): Enter the raw assumptions (products & sales, fixed and variable expenses, capex, funding, deposits, etc.). In Goalfix these live under Model Inputs and Settings.
• I/S schedules (3) and B/Sh Schedules (4): Supporting schedules that turn inputs into the line items needed for the main statements. Steps 3 and 4 are interchangeable—you can build Income Statement schedules and Balance Sheet schedules in either order.
• Income statement (5), Cash Flow (6), and Balance sheet (7): The three core statements. They are linked in both directions: the Income Statement feeds and is fed by the Cash Flow; the Cash Flow and Balance Sheet also feed each other. These loops are why the coloured arrows run both ways.

Data flows from specification and input into the schedules, then into the three statements. The links between the statements reflect real accounting: profit and non-cash items drive cash flow; cash flow changes the balance sheet; the balance sheet feeds back into interest, dividends, and other items in the income statement and cash flow.

Analysing the model outputs

The right side of the diagram shows how model outputs are used for analysis:

• Executive Summary: A distilled view of the model results, often driven by cash flow and key metrics.
• From the Executive Summary, analysis branches into Sensitivity Analysis (how outputs change when inputs change), Ratios & Returns (profitability, liquidity, leverage), Scenarios (e.g. Baseline, Best Case, Worst Case), and Data Tables (tables of results across two dimensions). In Goalfix you use the scenario bar and the Sensitivity Analysis tab for these.

Together, the flowchart and these sections describe the anatomy of a model: how it is built from inputs and schedules into the three statements, and how those outputs support analysis and decision-making.