Financial Models – How much detail?

We’ve been reworking our financial models in preparation for 2010 and beyond (three year planning). One of the questions that has come up is related to how much detail should we put into them. Detail, both in the number of assumptions and amount of variables, as well as projecting out out a certain time period. In terms of time periods, here are some common options:

  • The first six months on a month by month basis, followed by quarters for the remainder of the year, and then just a yearly columns
  • The 12 months on a month by month basis, followed by quarters for year two, and then just a yearly columns
  • The first 24 months a month by month basis, followed by yearly columns

I’m leaning toward keeping them fairly simple and using the first option for the time period details.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.