Who asked: the CFO of Harlow Home Stores, a regional furniture and homeware retailer (made up for practice). The board expects a weak 2027: sales down about 12% and stock building up. She wants to know whether the 60.0 revolving credit facility is big enough.
The data: 2025 actuals and three years of assumptions on the Model sheet: growth, margins, days, capex, rates, repayments, dividends, minimum cash and the facility limit.
What done looks like: a linked income statement, balance sheet and cash flow statement for 2026 to 2028; a revolver that draws only what the minimum cash needs; balance checks of 0 in every year; and a summary with the peak draw, the year it happens, free cash flow and a verdict on the facility.
This project builds a complete three-statement model, the core of most modeling tests, in twelve steps on one sheet. Your work carries from step to step:
- revenue and gross profit;
- SG&A, depreciation and PP&E;
- working capital from days;
- term loan and interest on opening balances;
- taxes and net income;
- cash from operations;
- capex, repayment and dividends;
- the revolver and cash;
- equity;
- totals and the balance check;
- a summary of the revolver and free cash flow;
- the verdict on the facility.
Some rows read 0 or look odd until a later step fills what they depend on. Interest picks up the revolver only once it exists in step 8. That's normal in a build. What matters is that every check reads 0 at the end. Each step is also checked on different inputs, so every formula must point at the assumptions.