---
description: Use this skill for financial modeling and valuation analysis — comparable company analysis (comps), DCF valuation, LBO models, 3-statement financial models, competitive landscape analysis, and Excel model auditing. Triggers on: comps, DCF, valuation, LBO, financial model, 3-statement model, comparable companies, discounted cash flow, leveraged buyout, competitive analysis, peer comparison, sensitivity analysis.
---

# Financial Modeling & Valuation Analysis

Institutional-grade financial modeling skills adapted from [Anthropic's Financial Services reference](https://github.com/anthropics/financial-services). Covers comps, DCF, LBO, 3-statement models, competitive analysis, and Excel model auditing.

## Data Source Priority

1. **VisionClaw stock_data tool** — use for real-time quotes, historical prices, and financial statements (A-shares, HK, US markets)
2. **Web search** — SEC EDGAR filings, company investor relations pages, earnings releases
3. **User-provided data** — uploaded documents, spreadsheets, or manually specified inputs
4. **MCP data servers** (if configured) — Morningstar, FactSet, S&P Global, Daloopa, etc.

Never fabricate financial data. If a number cannot be sourced, mark it as `[UNSOURCED]` and flag for the user.

---

## 1. Comparable Company Analysis (Comps)

### When to Use
When valuing a public company via peer multiples, benchmarking performance, pricing IPOs/funding rounds, or identifying valuation outliers.

### Workflow
1. **Define peer set** — 5-10 companies in the same sector/subsector. Confirm with user.
2. **Collect data** for each peer:
   - Market cap, enterprise value, net debt
   - Revenue, revenue growth, gross margin, EBITDA, EBITDA margin
   - Free cash flow, FCF margin (if relevant)
3. **Calculate multiples**:
   - EV/Revenue, EV/EBITDA, EV/EBIT
   - P/E, P/FCF, PEG ratio
   - Sector-specific (EV/subscriber, price/book for financials, etc.)
4. **Statistical summary**: Mean, median, 25th/75th percentile for each multiple
5. **Apply to target**: Implied valuation range using median and interquartile range
6. **Output**: Structured table with all metrics, statistical summary, and implied valuation range

### Key Principles
- Every derived value (margin, multiple) should be a formula, not hardcoded
- Use LTM (last twelve months) or NTM (next twelve months) consistently — state which
- Flag outliers (>2 standard deviations) and consider excluding from statistics
- Blue font = hardcoded inputs, black = formulas (IB convention)

---

## 2. Discounted Cash Flow (DCF)

### When to Use
For intrinsic valuation based on projected free cash flows. Use when the user needs fundamental valuation, intrinsic value, or asks about fair value.

### Workflow
1. **Gather historical data** (3-5 years): revenue, EBITDA, capex, D&A, working capital, tax rate
2. **Project free cash flows** (5-10 years):
   - Revenue growth assumptions (confirm with user)
   - Margin trajectory (operating margins, EBITDA margins)
   - Capex as % of revenue
   - Working capital changes
   - UFCF = EBIT × (1-tax) + D&A - Capex - ΔWC
3. **Calculate WACC**:
   - Cost of equity: Risk-free rate + Beta × Equity risk premium
   - Cost of debt: After-tax
   - Weights: Market cap / (Market cap + Net debt)
4. **Terminal value** (Gordon Growth or Exit Multiple method):
   - Gordon: TV = FCF_final × (1+g) / (WACC - g), where g = 2-3% typically
   - Exit Multiple: TV = EBITDA_final × Exit EV/EBITDA multiple
5. **Discount and sum**: PV of projected FCFs + PV of terminal value = Enterprise Value
6. **Equity bridge**: EV - Net Debt - Minority Interest + Associates = Equity Value
7. **Per-share value**: Equity Value / Diluted shares outstanding
8. **Sensitivity analysis** (5×5 grid, ODD dimensions):
   - WACC vs Terminal Growth Rate → Implied share price
   - WACC vs Exit Multiple → Implied share price
   - Center cell = base case (highlighted with medium blue)

### Critical Rules
- Terminal value often dominates (60-80% of total) — flag this for the user
- WACC inputs must be sourced and documented
- Sensitivity table: ODD dimensions (5×5 or 7×7), center = base case
- Never hardcode projected values — every projection must trace to an assumption

---

## 3. LBO Model

### When to Use
For leveraged buyout analysis in PE transactions, deal materials, or IC presentations.

### Workflow
1. **Sources & Uses**: Equity, debt tranches (senior, mezzanine), transaction fees
2. **Operating Model**: Revenue projections, EBITDA build, margin trajectory
3. **Debt Schedule**: Beginning balance → interest → mandatory amortization → cash sweep → ending balance (per tranche, with priority waterfall)
4. **Returns Analysis**: Entry equity → exit equity, IRR and MOIC calculation
5. **Sensitivity Tables**: Entry multiple vs exit multiple, leverage vs growth

### Key Rules
- Interest uses BEGINNING balance (avoids circular references)
- Debt balances cannot go negative — use MAX/MIN functions
- Cash sweep respects tranche priority (senior first)
- IRR cash flows: investment = negative, proceeds = positive
- Sources must equal Uses exactly (one item is the "plug")
- Sensitivity: ODD dimensions, center = base case

---

## 4. Three-Statement Financial Model

### When to Use
For building or completing integrated IS/BS/CF models that project a company's financials.

### Workflow
1. **Income Statement**: Revenue → COGS → Gross Profit → OpEx → EBIT → Interest → Tax → Net Income
2. **Balance Sheet**: Assets (cash, AR, inventory, PP&E) = Liabilities (AP, debt) + Equity
3. **Cash Flow Statement**: Net Income + D&A - ΔWC - Capex + Debt changes = Change in Cash

### Critical Linkages
- BS Cash = Prior Cash + CF Net Change in Cash
- CF D&A = IS D&A = BS PP&E schedule D&A
- CF ΔWC ties to BS working capital changes
- CF Interest = IS Interest = Debt Schedule interest
- **Balance Check**: Assets = Liabilities + Equity (MUST hold every period)
- **Cash Tie-Out**: CF ending cash = BS cash balance

### Build Order
1. Assumptions/drivers tab first
2. Income Statement projections
3. Working capital and supporting schedules
4. Balance Sheet
5. Cash Flow Statement
6. Verify all checks pass before presenting

---

## 5. Competitive Landscape Analysis

### When to Use
For competitive positioning decks, market maps, peer benchmarking, or strategic reviews.

### Workflow — Two Phases
**Phase 1: Scope** (before any research)
- Single target with competitors, or multi-company side-by-side?
- Which companies are in scope?
- Audience and depth level?
- Investment context needed (bull/bear scenarios)?

**Phase 2: Build** (after outline approval)
1. **Market Overview**: TAM/SAM/SOM, growth rate, key trends
2. **Company Profiles**: Business model, products, revenue breakdown, geographic mix
3. **Comparative Metrics**: Revenue, growth, margins, market share, key KPIs
4. **Positioning Visualization**: 2×2 matrix, radar chart, or tier diagram
5. **Competitive Dynamics**: Moats, switching costs, network effects, regulatory barriers
6. **Strategic Synthesis**: Winner/loser framework, key risks, inflection points

---

## 6. Excel Model Audit

### Checklist
- [ ] No hardcoded values in formula cells
- [ ] All subtotals sum correctly
- [ ] Balance sheet balances (A = L + E) every period
- [ ] Cash tie-out (CF ending = BS cash)
- [ ] No circular references
- [ ] No error values (#REF!, #DIV/0!, #VALUE!, #NAME?)
- [ ] Consistent sign conventions throughout
- [ ] Cell references correct after copy/paste
- [ ] Sensitivity tables show varying values
- [ ] All inputs have source documentation

### Color Convention (IB Standard)
- **Blue (0000FF)**: Hardcoded inputs
- **Black (000000)**: Formulas/calculations
- **Purple (800080)**: Same-tab links
- **Green (008000)**: Cross-tab links

---

## General Principles (All Models)

1. **Formulas over hardcodes** — every derived cell must be a formula
2. **Step-by-step verification** — confirm each section with user before moving on
3. **Source everything** — cite data sources for every input
4. **Sensitivity analysis** — always ODD grid dimensions, center = base case
5. **Professional formatting** — dark blue headers (#1F4E79), light blue column headers (#D9E1F2), light grey inputs (#F2F2F2)
6. **Sanity check outputs** — are margins reasonable? Do growth rates make sense? Are multiples in line with the sector?

*Adapted from Anthropic Financial Services (Apache 2.0). Skills are methodology frameworks — no paid data subscriptions required.*
