The Ultimate Operating & Financial Model Template (Free Spreadsheet)

In a world where 72% of global executives are rethinking cost management, the formula for sustainable growth has changed. Smart players are ditching outdated tactics and industry benchmarks, turning instead to the power of strategic insights. These insights form the backbone of business strategies which are made to impact the bottom line, not waste away in a forgotten folder.

If this reflects your mindset, we are here to help you with a powerful resource: a financial and operating model template. It’s 100% free and built as a spreadsheet template in Google Sheets. 

In this article, you’ll see how to use the template to observe, understand and act on the insights you’ll gain from your financial and operational metrics. And if you choose to integrate the template with Cascade, you’ll unlock additional benefits.

When To Use Our Operating & Financial Model Template? 

This free template is built to simplify your financial and operational analysis, automating profit and loss (P&L) reports and calculating key metrics like gross profit margin, operating profit, and net profit margin. 

More than that, it lets you take a close look at the specific operational metrics that affect your revenue and costs, helping you zero in on improvement areas. 

Here's what this template helps you do and what roles benefit the most from it: 

• Understand your revenue (CEO): Keep your finger on the pulse of your revenue streams by tracking trends over time. This will help you to recognize patterns and make investments and strategic decisions backed by solid data. 
• Streamline operations (COO): Monitor the efficiency of operations by analyzing metrics like throughput and yield. This will make it easier to spot bottlenecks and opportunities to optimize operations.
• Cut costs (CFO): Examine both operating and non-operating expenses. This will allow you to pinpoint opportunities to free up resources and reallocate them to value-generating initiatives. 
• Make better financial forecasts (CFO): By highlighting the historical discrepancies between your actuals and budget, this template complements your financial analysis and helps you make more precise financial plans. 
• Develop effective business strategies (all leaders): Analyze your organization's current state with the template to devise business plans tackling challenges and capitalizing on opportunities.

💡The template helps you compare metrics across different periods, prompting you to ask the right questions to improve your business’s financial performance.

For example: 

• If our operating profit is down, why is this happening? 
• If our gross profit margin is lower than last year, what's causing this drop? 
• If our net profit margin is higher, why is that, and how can we keep this positive trend going? 

What You’ll Get Inside The Financial & Operating Model Template? 

The power of this template lies in its ability to turn your raw data into actionable insights. 

The process is simple. First, replace the pre-filled dummy data, which serves as an example, with your data. Once you do it, the spreadsheet will automatically populate the tabs with vital information that will help guide your decision-making.

Here’s a sneak peek into each tab: 

P&L - Budget vs. actual

This tab compares your actual financial performance against your projected budget, showing key indicators such as gross and net profit margins. For example, if you see your actual gross profit margin falling short of the budgeted figure, it may signal the need to revise your pricing strategy or manage the cost of goods sold (COGS).

P&L - Time comparison 

Elevate your analysis with this tab, which incorporates historical data alongside YoY and QoQ comparisons. Notice a decrease in Q4 net profit margin over three quarters? It’s time to dig deeper into cost increases or revenue dips during that year. 

Financial metrics

This tab calculates key financial metrics monthly, such as revenue growth rate, giving a snapshot of your business's financial health and guiding your strategy to enhance profitability.

Operations metrics

Dive into operational metrics such as operating expenses, operating income (EBIT), and production and distribution KPIs. Identify which operations need tweaking to maximize their efficiency. For example, if you notice a decrease in production efficiency, it might signal that it's time to invest in new equipment, employee training, or process improvements.

Dashboards

This tab delivers a graphical summary of your key financial and operational metrics. With easy-to-read graphs and charts, you can spot trends and patterns quickly.

How To Start Using Operational And Financial Model Template? 

Follow these instructions: 

1. Get access:  Fill out a short form here to gain free access to the Financial and Operating Model Template in Google Sheets.‍

2. Make a copy: Once you have access, create a copy of the file to your Drive. This will allow you to edit the document and share it with your team for collaboration.

3. Input your data: Navigate to the tabs labeled 'Data input - financials' and 'Data input - operations'. Here, you'll need to enter your financial and operational information specific to your business.

4. Auto-populated insights: After inputting your data, four other tabs will automatically populate with insightful data based on your entries. These tabs include:

• 'P&L - Budget vs. Actual'
• 'P&L - Budget vs. Actual (Historical data)'
• 'Financial Metrics'
• 'Operations Metrics'

5. Visualize your data: Switch over to the 'Dashboards' tab to see a visual representation of your business performance. Here, your data will be presented in a series of charts and graphs, offering a clear overview of your financial and operational status.

6. Keep your data fresh: Establish a regular update schedule for your data. Consistently updating your data will ensure that the insights generated by the template remain accurate and up-to-date.

To make the use of the template as simple as possible, we’ve put all of these steps in the ‘How it works’ tab in the spreadsheet as well.

Spreadsheets (Excel/Google Sheets): A Double-Edged Sword

Spreadsheets: they're a staple in many business toolkits, but are they really the best option for tracking your business metrics? Stay with us as we weigh the pros and cons and show you how to take your spreadsheet game to the next level. 

The good: 

• User-friendly: Spreadsheets are intuitive, easy to use, and commonly available, making them a go-to tool for many. 
• Accessibility: Cloud-based platforms like Google Sheets support collaboration, anywhere.  
• Affordability: Spreadsheets are a wallet-friendly option that won't break the bank, especially for small businesses and start-ups. 
• Big databases: Spreadsheets can handle big databases that become extremely powerful when you connect them to a platform like Cascade, which provides insights, visual reports, and performance analysis. 

The not-so-good: 

• Time sink: While they're flexible, spreadsheets can also be time thieves. Managing and updating data can chew up more hours than you'd like. 
• Mistake magnets: A single typo can ripple through a spreadsheet, leading to inaccuracies in your metrics.
• Information overload: Spreadsheets often display a vast amount of data without clear priorities, leading to information overload and difficulty in efficiently identifying key information.
• Limited strategic analysis capabilities: Spreadsheets fall short in analyzing strategic insights and narrating data due to their limited advanced visualization capabilities.
• Isolated metrics: Spreadsheets display data in isolation, stripping away the wider context that's critical for a holistic understanding of your business performance.
• Lack of scalability: Once you've added a custom metric in Google Sheets or Excel spreadsheet, applying it to different models or dashboards can be a laborious process, often requiring you to rebuild it each time.

‍

The lack of context, scalability, and real-time data to make the right decisions at the right time was one of the reasons we built Cascade. 

💡While Cascade is not a replacement for spreadsheets, it can elevate them. Cascade eliminates or at least minimizes 5 of the 6 weaknesses we mentioned above (the only thing Cascade can’t do is correct input mistakes).

The Better Alternative: Meet The Metrics Library In Cascade

Cascade, the world’s leading strategy execution platform, allows you to move beyond the limitations of spreadsheets and into the realm of business observability, offering a comprehensive view of your business’s performance. This interactive platform simplifies tracking key financial and operating metrics, empowering you to make precise and timely strategic decisions.

Using the Metrics Libray, you're no longer dealing with a scattered puzzle of systems, tools, and spreadsheets. Everything you need is in one comprehensive platform, enabling complete visibility into your business's health. This visibility is crucial when planning the next strategic move to improve your business’s bottom line. 

Step-by-step instructions below describe how to import your spreadsheet data into Cascade and make powerful analyses to impact your organization’s bottom line. 

💡To follow these steps, you will need to access our financial & operating model template and fill it out with your data. This will ensure that your data is in the right format before you import it into Cascade.

Step 1: Import your metrics into the Metrics Library

Get your metrics in line with these easy steps:

1. Connect Google Sheets and Cascade.
2. Choose the file and sheet you want to import. Using Cascade’s financial and operating model template, make sure to select this tab: ‘Key Metrics to import!’. Note: This tab is auto-populated when you feed your data to the 'Data input - financials' and 'Data input - operations' tabs. 
3. Select the metrics you need to track. Define the units, tracking period, ascending/descending order, and anything you find relevant.

After this, your metrics will populate the Metrics Library, setting the stage for creating a dynamic dashboard and comprehensive performance analysis. 

💡Still got questions? Watch the video to see the step-by-step process of importing metrics, or visit our support center for a more detailed explanation.

Step 2: Create your dashboards

With your data integrated into Cascade, you have two options to visualize the performance of your metrics. 

Option 1: Single metric performance 

Using the "Performance of Single Metric" widget, you can track how a particular metric is performing over time. Add any metric to your dashboards without rebuilding it from scratch, saving time and effort.

Bear in mind, this widget only presents raw data without any context. To address this, we introduce option 2, as shown below. 👇

Option 2: Deep-dive with measures   

By linking your metrics to measures, you can build interactive dashboards. This not only ties your metrics to a strategic plan, focus area, and objective, but also provides additional context, including deadline, initial and target values, and linked projects.

‍Measures in Cascade are time-bound with a target to achieve. E.g. a metric can be “Achieve an ARR of 100m $”, while a measure derived from this metric is “Target revenue of 15m $ in 2023”.

The cherry on top? With metrics linked to measures, you can track additional parameters such as actual versus target value.

Such tracking allows you to reverse engineer your strategy (or parts of it) around that constant observation and insights you’ll uncover. This is a bottom-up approach that helps you create a metric-based strategy relevant to your business context. 

💡Need assistance? Watch our video tutorial on importing metrics, or visit our support center for detailed instructions. 

Why Choose Cascade? 

Now that you understand how to track your key business metrics and unlock strategic insights with Cascade, let's delve into the additional benefits that make it the perfect choice for businesses.

Achieve business observability

With Cascade, you have a unified, real-time view of your P&L data, financial, and operating metrics. You can start with a panoramic view and then drill down into any layer of your organization. This insightful perspective allows you to spot gaps, mitigate risks, and develop better business roadmaps.

Tear down data silos

Cascade works like a data magician, automatically merging your operational and financial data into a single, centralized powerhouse. With more than 1,000 integrations, we help you minimize manual efforts and maximize data accuracy. You can develop action plans and monitor progress in real-time, without the need to switch between tools or sacrifice visibility.

Enable contextual decision-making

With Cascade, you're not just looking at numbers; you're connecting the dots between key business metrics and your strategic goals. Customizable reports and dashboards let you weave a narrative that truly explains what's happening and why. Be it business analysis, performance reviews, or board updates—we've got your back. 

Foster alignment and collaboration 

Cascade is more than a tool—it's a catalyst for organizational alignment. By focusing on shared goals and KPIs, Cascade fosters faster execution, accountability, and collaboration throughout your organization.

Quickly adapt to changes and boost efficiency

Business disruptions? No problem. With real-time data and customization, Cascade lets you adapt at the speed of change. And it doesn't matter if you're tracking a handful or hundreds of business metrics and goals—Cascade's flexible and scalable framework fits businesses of all sizes. This enables you to stay efficient which is getting harder and harder in an increasingly complex environment full of tools, information, projects, and disruptions.

Deliver Business Value Faster With Cascade 🚀

Cascade is not just another platform; it's your strategic command center. It empowers you to monitor performance and design strategies, all under one roof. This means your strategy execution stays in sync with your metrics, maximizing business efficiency and driving success. 

In a complex business world that's evolving faster than ever, Cascade offers the clarity, alignment, and adaptability needed to keep you ahead of the curve. It's not just about tracking metrics; it's about understanding them, contextualizing them, and using them to fuel strategic decision-making.

Ready to see Cascade in action? Start today for free or book a 1:1 demo.

FAQs

What is the difference between a cash flow and a financial model? 

Cash flow focuses on tracking cash movement in and out of a business, while a financial model is a broader tool that forecasts and analyzes a company's financial performance.

What are the 4 types of financial models? 

The four types of financial models:

• Income Statement Model: Focuses on revenue, expenses, and profitability.
• Balance Sheet Model: Tracks assets, liabilities, and equity.
• Cash Flow Model: Analyzes cash inflows and outflows.
• Discounted Cash Flow (DCF) Model: Estimates the value of an investment using its expected future cash flows.

What is a 3-way financial modeling? 

A comprehensive model that includes three financial statements (income statement, balance sheet, and cash flow statement) to provide a holistic view of a company's financial performance, position, and cash flow.