Financial Model Assumptions
Make the assumptions in a financial model explicit, testable, and easier to challenge.
What you'll need
- Financial model or projections
- Historical data for benchmarking
- Industry comparables
- Market research
- Strategic plan inputs
Put it to work
Save these instructions in a Claude Skill or Project, or in a ChatGPT Project or Custom GPT. Add your context, run the sample prompt, and check the result against your team's standards before anyone relies on it.
Reusable playbook
Learn the method, adapt the details, then put it to work.
Start here
Reusable instruction — Claude: save as a skill file at ~/.claude/skills/finance/modeling-assumptions.md · ChatGPT: paste into a Custom GPT's instructions or a Project.
Give the AI a clear role
You are a financial-planning assistant who documents and stress-tests assumptions from authorized sources for review by the accountable finance owner. You do not provide investment, tax, accounting, or fiduciary advice or approve a model.
Bring the right context
- {{historical_data_path}} - Historical performance data
- {{industry_benchmarks_path}} - Industry comparables (optional)
- Financial model or projections
- Historical data for benchmarking
- Market research and industry comparables
- Strategic plan inputs
Run the method
Given a financial model
- 1
Assumption Extraction
- Identify all explicit assumptions
- Surface implicit assumptions
- Categorize by type (growth, cost, timing)
- 1
Validation
- Compare to historical performance
- Benchmark against industry
- Check internal consistency
- Assess reasonableness
- 1
Sensitivity Analysis
- Identify high-impact assumptions
- Model bull/bear scenarios
- Calculate break-even points
- 1
Documentation
- Source each assumption
- Note confidence level
- Flag for review cycle
04Preview the deliverableSee the shape of a strong answer before you run the workflow.
Financial Model Assumptions
Model: [Name] Version: [Number] As of: [Date]
Assumption Register
Revenue Assumptions
- #
- R1
- Assumption
- YoY growth rate
- Value
- 25%
- Source
- Historical + pipeline
- Confidence
- High
- Sensitivity
- High - $1M per 5%
- #
- R2
- Assumption
- New customer ACV
- Value
- $50K
- Source
- Sales data
- Confidence
- Medium
- Sensitivity
- Medium
- #
- R3
- Assumption
- Churn rate
- Value
- 8%
- Source
- Historical
- Confidence
- High
- Sensitivity
- High
| # | Assumption | Value | Source | Confidence | Sensitivity |
|---|---|---|---|---|---|
| R1 | YoY growth rate | 25% | Historical + pipeline | High | High - $1M per 5% |
| R2 | New customer ACV | $50K | Sales data | Medium | Medium |
| R3 | Churn rate | 8% | Historical | High | High |
Validation Notes:
- R1: Historical growth was 22% with less investment; 25% achievable with planned sales hires
- R2: Current ACV is $45K, trending up with enterprise focus
- R3: Consistent with SaaS benchmarks; assumes no major product issues
Cost Assumptions
- #
- C1
- Assumption
- Headcount growth
- Value
- +15 FTEs
- Source
- Hiring plan
- Confidence
- Medium
- Sensitivity
- Medium
- #
- C2
- Assumption
- Average salary increase
- Value
- 4%
- Source
- Comp benchmarks
- Confidence
- High
- Sensitivity
- Low
| # | Assumption | Value | Source | Confidence | Sensitivity |
|---|---|---|---|---|---|
| C1 | Headcount growth | +15 FTEs | Hiring plan | Medium | Medium |
| C2 | Average salary increase | 4% | Comp benchmarks | High | Low |
Scenario Analysis
- Scenario
- Base
- Key Assumption Changes
- As modeled
- Revenue Impact
- $12M
- Profit Impact
- $2M
- Scenario
- Bull
- Key Assumption Changes
- R1: 30%, R3: 6%
- Revenue Impact
- $14M
- Profit Impact
- $3.5M
- Scenario
- Bear
- Key Assumption Changes
- R1: 18%, R3: 12%
- Revenue Impact
- $9.5M
- Profit Impact
- ($0.5M)
| Scenario | Key Assumption Changes | Revenue Impact | Profit Impact |
|---|---|---|---|
| Base | As modeled | $12M | $2M |
| Bull | R1: 30%, R3: 6% | $14M | $3.5M |
| Bear | R1: 18%, R3: 12% | $9.5M | ($0.5M) |
High-Risk Assumptions
- 1
R1: Growth rate - Most sensitive; monitor pipeline weekly
- 2
R3: Churn - Leading indicator: NPS and support tickets
Assumption Review Schedule
- Assumption
- Growth rate
- Review Frequency
- Monthly
- Owner
- Sales Ops
- Assumption
- Churn
- Review Frequency
- Monthly
- Owner
- Customer Success
- Assumption
- Headcount
- Review Frequency
- Quarterly
- Owner
- HR
| Assumption | Review Frequency | Owner |
|---|---|---|
| Growth rate | Monthly | Sales Ops |
| Churn | Monthly | Customer Success |
| Headcount | Quarterly | HR |
Try this prompt
Document and validate the assumptions in our 2025 budget: Key projections: - Revenue: $12M (25% growth) - Gross margin: 72% - Headcount: Growing from 45 to 60 - Marketing spend: $1.5M (12.5% of revenue) - Net income: $1.2M (10% margin) Historical context: - 2024: $9.6M revenue, 22% growth, 70% GM, 8% churn - Industry benchmark: SaaS companies our size average 20-30% growth, 70-75% GM Flag any assumptions that seem aggressive or need more support.
Before you trust the output
- Update assumptions as actuals come in
- Document the "why" not just the "what"
- Require qualified finance review before a model informs a filing, forecast, investment, or fiduciary decision
Your next step
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