<aside> 💡 Put simply, the definition of investor reporting is the act of sharing key qualitative and quantitative data with your financial investors. Investor reporting can look different for different companies, depending on the company stage and vertical.

</aside>

Generally it’s expected that you will provide the following:

• Income Statement
• Balance Sheet
• Cash Flow Statement

This will usually be provided on a quarterly basis.

You can use software like Visible to make this easier.

Step 1 - Build Income Statement

• Build out assumptions
  • Revenue assumptions
  • COGS assumptions
  • OPEX assumptions
    • Leave depreciation blank till balance sheet made
  • Interest payments
    • Leave blank till balance sheet made
• Make headings for income statement
  • Gross Revenue
  • Net revenue
  • COGS
  • Gross Profit
  • OPEX (- depreciation)
    • Depreciation is included as a cost here
  • Operating income (EBIT)
  • EBITDA (Operating income + Depreciation)
  • Interest
  • NI Before taxes
  • Net income

Step 2 - Create CAPEX and depreciation schedules

• Build out Capex
  • Capital expenses for the period (large assets for the benefit of multiple years)
  • Determine the number of useful years per asset
• Depreciate the assets
  • Figure out the depreciation per asset

Step 3 - Build balance sheet

Liabilities + equity = Assets

• Build out balance sheet based off historical
  • Assets
    • Current Asssets (Can be liquidated into cash in < 12 months)
    • Non-current assets
      • Net fixed assets = Fixed assets - Accumulated Depreciation
  • Liabilities
    • Current liabilities
      • E.g. Accounts payable, deferred revenue
    • Non-current liabilities
  • Equity
    • Retained earnings
      • Net income from the balance sheet (added up from last year)
    • Common stock
• Forecast balance sheet
  • Current assets
    • Forecast accounts receivables (using assumptions as a % of revenue from the income statement)
    • Need to build cashflow statement to link cash
  • Net Fixed assets
    • Fixed assets: Take existing assets + forecast CAPEX in the model (Take from Capex and Depreciation schedule)
    • Depreciation: Take from Capex and Depreciation schedule
  • Current Liabilities
    • Forecast payables, deffered revenue(using assumptions as a % of revenue from the income statement)
    • Model out new new debt borrowed vs amount repaid over the period (need to know interest rates and repayment schedules)
      • More assumptions for this one
        • Remember to link interest repayments to the income statement
  • Equity
    • Common stock
      • Assume constant if you don’t issue new equity
  • Retained earnings
    • Take retained earnings + net income from the year