How to: P&L drivers

Step-by-step

1. 1. Open the P&L tab and confirm your base year

   Your model typically starts from the last actual year. That base year anchors your forecast. For very early-stage startups without meaningful actuals, the base year can effectively be your first forecast year.

2. 2. Choose a revenue driver (Basic or Advanced)

   Start simple and add detail only when you need it.

   Basic revenue driver

   Use a single revenue driver (e.g. growth %) for fast onboarding and early drafts.

   • • Revenue baseline in base year
   • • Growth assumptions per year
   • • Quick sensitivity testing

   Advanced revenue driver

   Model revenue by product (or stream) using price and volume. This unlocks more realistic scenarios.

   • • Price × Volume per product
   • • Separate growth per product line
   • • Cleaner pricing scenarios

   If you’re unsure, start with Basic — you can refine later once the baseline is stable.

3. 3. Define COGS (Basic % of revenue, or Advanced per product)

   COGS drives your gross margin and is one of the most important levers for profitability.

   Basic COGS driver

   Set COGS as a percentage of revenue. This is the fastest way to get a stable gross margin baseline.

   • • COGS % in base year
   • • Adjust % for forecast years if needed
   • • Gross margin updates automatically

   Advanced COGS driver

   Set COGS (or gross margin) per product. This matches product-level price/volume and makes margin scenarios much more realistic.

   • • Different margins per product line
   • • Better unit economics visibility
   • • Cleaner impact on overall gross margin
4. 4. Set employee expenses (Basic or Advanced)

   Employee expenses are handled differently for base year vs forecast years.

   Base year

   Enter employee expenses as the actual total for the last actual year. This anchors your cost base.

   Basic payroll driver (forecast)

   Forecast employee expenses as a percentage of revenue. This keeps the model lightweight and scales naturally with growth.

   • • Payroll % for forecast years
   • • Good for quick planning cycles
   • • Easy to scenario-test

   Advanced payroll driver

   Plan headcount with departments and roles. Model FTE counts, cost per FTE, and wage inflation.

   • • Departments + roles
   • • FTE count per role (per year)
   • • Cost per FTE (fully-loaded)
   • • Wage inflation (annual %)

   Advanced payroll is best for hiring scenarios (“hire now vs delay”), while basic payroll is great for a fast baseline.

5. 5. Set other operating expenses as % of revenue

   For a clean, scalable model, define other operating expenses (marketing, tools, G&A, etc.) as a percentage of revenue. This makes costs scale with growth and keeps assumptions simple.

6. 6. Enter depreciation & interest (base year only)

   Depreciation and interest are entered only for the base year (last actual year). For startups without meaningful actuals, enter them in the first forecast year.

   Forecast depreciation and interest are calculated automatically once you complete the Balance Sheet inputs (next step). This keeps statements consistent and avoids manual guesswork.

7. 7. Enter tax in base year, then set the tax rate

   Enter the tax value for the base year, then adjust the tax rate for forecast years. The default is 25%.

8. 8. Review the Profit & Loss statement at the bottom

   The P&L statement updates as you enter drivers. Use it as a sanity check:

   • – Do revenue levels and growth look realistic?
   • – Is gross margin in line with your unit economics?
   • – Do payroll and opex scale as expected?
   • – Does the EBITDA trajectory make sense?
9. 9. Press Save — then move on to the Balance Sheet

   When the P&L is “good enough” for a baseline, save your changes. Then continue with the Balance Sheet inputs to complete working capital, assets and financing — which drives forecast depreciation, interest, and cash flow accuracy.