<ul><li>Building financial models always comes back to the 3 financial statements - Income Statement, Balance Sheet, and Cash Flow Statement. Understanding the impact of business changes on these statements is crucial.</li><li>The Matching Principle states that Revenue Earned must match Expenses Incurred. Understanding this principle helps in accurately reflecting the impact of expenses over time.</li><li>EBITDA is not part of GAAP, but it is used as a proxy for profitability in valuing the business. It includes discretionary adjustments that can significantly influence valuation.</li><li>To avoid errors and enhance clarity, it is important to explain the model and consolidate error checks in a dedicated tab. This helps in quickly identifying and fixing errors.</li></ul>

9 Financial Modeling Tips I Wish I Had When I First Started

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