Model layout. When we want to start building financial forecasts, the very first decision that we have to make is how to lay out and format our model. We should aim to make this as intuitive as possible as there may be lots of people using our model and possibly even clients. Most of the decisions on layout will be based on the information provided to us by the company in their historic financial statements. As this gives us the key line items and disclosures provided by the company. However, it will also be based on the key assumptions and value drivers that we want to use in our model. When deciding on our layout we don't need to exactly replicate every line in the company's income statement balance sheet and cash flow statement having too many lines in a model can make it difficult to navigate and quite cumbersome to update. It may be more efficient to aggregate some line items here. For example, if you look above you'll see that the analyst has decided to forecast just revenues and EBITs are rather than separating out cost of sales and sg&a. However, in other situations you may need to show more detail in your income statement. For example, the analyst here has shown D&A and non-recurring items a separate line items, even though this information comes from the footnotes rather than the face of the income statement. That's fine. If the analyst thinks that this will help users understand the forecasts. However, where we do this it's particularly important that we check subtotals to reported numbers. For example, you can see that operating profit and profit for the year shown in the model matches the financial statements albeit with the years shown the other way around when deciding on the model structure will need to think about what goes where on each tab including whether you will block your assumptions in one place or scatter them throughout your model. Also, it's important to use subheadings throughout your model to aid navigation models can be very difficult to follow if they just show pages and pages of numbers. Also many analyst models are multitab particularly for large models with the income statements balance sheet and cash flow statement and other analysis split onto separate tabs. Typically the tab order follows the sequence of the model build. So income statement first for corporates and balance sheet first for financial services. sector or operational analysis then sits behind these the final step is to think about how the model is formatted many firms have a house style for this which will differentiate between constants formulas and sometimes also assumptions. This makes the model easier to follow and update. In this playlist, we'll be building a Burberry model, which is already set up with a historical financial information taken from the financial statements which are contained in the PDF document provided. Please download this model and the PDF now and spend a few minutes familiarizing yourself with how the model is laid out.