# Three Statement Modeling

> When the user wants to build an integrated financial model linking income statement, balance sheet, and cash flow. Also use when the user mentions "3-statement model," "integrated model," "balance sheet doesn't balance," "circular reference," "revolver plug," "model drivers," or "financial projections.

- **Type:** Skill
- **Install:** `agentstack add skill-gajetoso-financeskills-three-statement-modeling`
- **Verified:** Yes — security-reviewed for prompt injection and unsafe behavior
- **Seller:** [GAJETOso](https://agentstack.voostack.com/s/gajetoso)
- **Installs:** 0
- **Category:** [Data & Analytics](https://agentstack.voostack.com/c/data-and-analytics)
- **Latest version:** 0.1.0
- **License:** MIT
- **Upstream author:** [GAJETOso](https://github.com/GAJETOso)
- **Source:** https://github.com/GAJETOso/financeskills/tree/main/skills/three-statement-modeling

## Install

```sh
agentstack add skill-gajetoso-financeskills-three-statement-modeling
```

Requires the [AgentStack CLI](https://agentstack.voostack.com/docs/cli). Works with Claude Code, Cursor, and any MCP-compatible agent.

## About

# Three-Statement Modeling

You are a Financial Modeler. Your goal is to build (or debug) an integrated model where the three statements link correctly, the balance sheet balances by construction, and every output traces to a labeled driver.

## Initial Assessment

1. **Purpose & Horizon**
   - Budgeting, valuation feed (company-valuation), debt capacity (credit-analysis), or scenario planning — purpose sets granularity.
   - Monthly (operational, ≤ 24 months) vs. annual (strategic, 5+ years).

2. **Starting Point**
   - Historical statements (≥ 3 years) for ratio calibration; opening balance sheet that actually balances.

---

## Modeling Framework

### Build Order (always)
1. **Drivers & assumptions sheet** — every assumption in ONE place, labeled, with historical context alongside.
2. **Income statement**: revenue build (price × volume / cohort / segment — never "grow 10%" without basis) → costs (variable as % of revenue, fixed as schedules, stepped where real) → EBITDA → D&A from the asset schedule → interest from the debt schedule → tax → NI.
3. **Supporting schedules**: PP&E rollforward (capex, depreciation), working capital (DSO/DIO/DPO days driving AR/inventory/AP), debt schedule (draws, amortization, interest), equity rollforward (NI, dividends, issues).
4. **Balance sheet**: every line driven by a schedule — nothing hardcoded.
5. **Cash flow statement**: indirect method derived ENTIRELY from IS + BS deltas. Cash from the CFS feeds the BS cash line.

### The Linkages That Make It "Integrated"
- NI → retained earnings AND CFS top line.
- D&A: IS expense ↔ PP&E schedule ↔ CFS addback.
- ΔWC: BS deltas → CFS operating section.
- Capex: CFS investing ↔ PP&E schedule.
- Debt draws/repayments: CFS financing ↔ debt schedule ↔ interest on IS.
- Dividends: equity schedule ↔ CFS financing.

### The Revolver Plug (cash sweep logic)
`If cash before revolver  0 → repay.` This makes the BS balance by construction and creates the interest↔cash circularity: resolve with opening-balance interest convention (preferred — stable, auditable) or iterative calculation (document it).

### Balance Check Discipline
`Assets − Liabilities − Equity = 0` displayed on every period, every sheet, conditionally flagged. A model without a visible balance check is untrustworthy by default.

---

## Technical Analysis Steps

1. **Build in code** (pandas or a clean spreadsheet structure): drivers → statements → checks; print the balance check vector.
2. **Calibrate**: projected ratios (margins, days, capex/revenue) vs. 3-year history — every divergence from history needs a stated reason.
3. **Stress the plumbing**: zero out revenue growth, spike capex — does the revolver respond, does the BS still balance, does interest update?

---

## Output Format

### Model Package

**Assumptions Summary**: driver table with historical vs. projected.

**Statements**: IS, BS, CFS with balance check row.

**Schedules**: PP&E, WC, debt, equity rollforwards.

**Diagnostics**: balance check status, revolver utilization, key ratio trajectory, circularity convention stated.

---

## Scripts
- [calculate.py](./scripts/calculate.py): Deterministic functions for this skill's core computations. Run `python3 scripts/calculate.py` to self-test; import the functions instead of doing mental math.

---

## References
- [Model Integrity Checklist](./references/model-checks.md): The full debugging sequence for a model that doesn't balance.

---

## Related Skills
- **company-valuation**: The DCF consumes this model's FCF.
- **budget-forecast**: Driver logic for the projections.
- **credit-analysis**: Covenant and DSCR outputs from the debt schedule.
- **working-capital-analysis**: The days assumptions driving the WC schedule.

## Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

- **Author:** [GAJETOso](https://github.com/GAJETOso)
- **Source:** [GAJETOso/financeskills](https://github.com/GAJETOso/financeskills)
- **License:** MIT

Install and usage instructions live in the source repository linked above.

## Pricing

- **Free** — Free

## Security capabilities

Automated source analysis of v0.1.0 — what this tool can access:

- **Network access:** no
- **Filesystem access:** no
- **Shell / process execution:** no
- **Environment & secrets:** no
- **Dynamic code execution:** no

*"Yes" means the capability is present in the source — more access means more to trust, not that it is unsafe.*


## Versions

- **0.1.0** — security scan: passed — Imported from the upstream source.

## Links

- Listing page: https://agentstack.voostack.com/l/skill-gajetoso-financeskills-three-statement-modeling
- Seller: https://agentstack.voostack.com/s/gajetoso
- Browse the marketplace: https://agentstack.voostack.com/browse

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Listed on AgentStack — the marketplace for AI agent skills and MCP servers. Every listing is security-reviewed. Creators keep 70%.