updating models for results When companies report quarterly results, there are a number of implications for your model. It's helpful to split this into three activities. The first important step is to analyze how the results compare to your forecasts where results are above your forecasts. This is a beat and where results are below your forecast. This is a miss. At this point it's critical to consider whether any beat or Miss is a result of a recurring or non-recurring item. If it is due to an underlying business change, for example cost inflation, which can't be passed onto the customer. Then this will impact your assumptions in future periods. Analysts usually complete this analysis by copying and pasting their forecasts into a separate tab or section of their model as hard coded numbers rather than trying to analyze the results in the live model. By having hard coded copies of the forecasts it allows analyst to keep track of their original forecasts when they later start to update their assumptions and estimates in the live model.

The second important step is to include the latest results in your model. These numbers replace. The previous forecasts on are now actuals rather than estimates. Bear in mind that when you replace estimates with actuals any beat or Miss in the revenue line will impact on subsequent forecasts. For example, if Q2 revenues exceeded your forecasts then inputting this larger number into Q2 Revenue will increase total fy1 revenue since fy1. Revenue is also the basis for your fy2 revenues. Your fy2 revenues will also increase This is why it's so helpful to have your original forecasts hard coded in a separate section of the model that you can refer back to. The final important step is to update your assumptions to reflect any new trends identified in the results. For example, if Q2 Revenue growth or margins were higher or lower than expected and this trend is expected to persist. Then you will want to upgrade your Revenue growth and margin forecasts in subsequent quarters.