Lesson 2
Excel Exercise - Modeling Revenue
Top-line revenue is usually the most important driver of a company’s performance. A lot of attention is therefore often devoted to modeling this item.
Instructions
Download Exercise 2 and PDF Guide to Revenue Modeling
See below for download links
Complete Exercise 2
Apply the concepts covered in the first section of Part II to project the revenue section of the P&L.
Optional Step-by-Step Excel Demonstration (Video)
If you require additional assistance with the Excel Exercise, please go to Lesson 2.2.5 for a Step-by-Step Excel Demonstration Video (See bottom of page for link)
Exercise 2
Fill in the red cells as indicated in the model exercise and refer back to the video lecture & presentation as needed. You will get green checks once you’ve calculated/input the right data. You can also un-hide a solutions sheet within the file to check your answers.
Time Commitment: 30 Minutes
Modeling Revenue Across Industries
Unsurprisingly revenue modeling differs widely across industries – imagine, for example, how different the drivers for a tech company are vs. those of an oil & gas operator. Moreover, complexity of modeling necessarily depends on the purpose of the model: Are we building a detailed M&A transaction-model, an internal company budgeting model with near-perfect access to data, or a higher-level equity research model?
That said, revenue modeling is usually split into two main components: 1) organic revenues, driven by the existing asset-base and often modeled as a simple growth formula, 2) external revenue contributions from new acquisitions and developments.
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