From the course: Excel for Finance: Building a Three-Statement Operating Model

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Forecasting the variable expenses

Forecasting the variable expenses - Microsoft Excel Tutorial

From the course: Excel for Finance: Building a Three-Statement Operating Model

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Forecasting the variable expenses

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- [Instructor] So now let's move on to our operating expenses. These are expenses that are often called below the line, the line being the gross profit, right? This is the profit we make from directly selling our product, but we have all kinds of administrative expenses to keep the business going. It's, you know, hiring people. We have rent, professional fees, insurance, all, you know, what's called the administrative expenses. And we need to model those out as well. Big picture speaking, these expenses are normally broken down into two buckets. We have variable expenses, which means they move contingent upon something else, typically revenue or labor, or something like that. And then we have fixed expenses, which means they're just going to grow or stay steady regardless of what the business does above the line or above gross profit. And I can see that here in the notes from the CFL. A few variable ones. I've got 18%…

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