| name | model-review |
| description | 7-pass review of financial models — assumptions, mechanics, integrity (BS balances, CF reconciles), hardcodes, error-checks, scenarios, documentation. Used by `financial-modeler` (primary) and `valuation-analyst` for DCF integrity checks. |
Skill: model-review
Purpose: 7-pass review pattern for financial models. Used by financial-modeler (primary) and valuation-analyst for DCF integrity checks.
When to use
- Reviewing a model built by someone else before relying on it
- Pre-publication review of a model going to a board, lender, or external party
- Triaging a model that "doesn't tie" or produces unexpected results
- Periodic refresh check on a long-lived model
The 7 passes (in order)
Don't skip ahead. Each pass depends on the prior ones being clean.
Pass 1 — Assumptions
- Is there a dedicated Assumptions / Inputs tab?
- Are inputs color-coded (blue) and visually distinct from formulas (black) and links (green)?
- Does every load-bearing input have a documented source? (Cite: where, when, who.)
- Are inputs labeled with units (%, $, x, days)?
- Are growth-rate / margin / ratio assumptions reasonable vs. history?
Pass fails if: any load-bearing input has no source, OR inputs are scattered across multiple tabs.
Pass 2 — Mechanics
- Do the three statements tie? (Net income flows to retained earnings; cash flow ties to BS cash; FCF reconciles.)
- Working capital mechanics: do DSO / DPO / DIO drivers produce the AR / AP / inventory balances they should?
- Debt schedule: principal amortization + interest expense + ending balance all tie?
- Tax: effective rate applied? Loss carryforward / NOL mechanics?
- Equity: share count + stock-comp + buybacks all reconciled?
Pass fails if: the three statements don't tie, OR any major mechanical relationship is broken.
Pass 3 — Integrity checks
- Is there a balance-check row on the BS (= A − L − E, should equal 0)?
- Is there a cash tie-out (ending cash on BS = ending cash on CF)?
- Are there debug rows / consistency checks anywhere else (sum of segments = consolidated, etc.)?
- Are there any
#REF!, #NAME?, #DIV/0!, #VALUE! errors in the model?
Pass fails if: any integrity check is missing or returns non-zero, OR any error value exists.
Pass 4 — Hardcodes
- Are there hardcoded numbers buried inside formulas? (Search for digit patterns inside formulas —
*0.21, +12000, /365.)
- Are there hardcoded dates that should be driven from a date schedule?
- Are there hardcoded sheet references that should use named ranges?
Pass fails if: any hardcode is material (drives the answer) and isn't justified.
Pass 5 — Error-checks (IFERROR audit)
- Are there
IFERROR wrappers masking actual errors?
- Are there
IF statements that silently route bad data to a default?
- Are there
0 defaults where the right behavior is to fail visibly?
Pass fails if: any error-suppression wrapper hides a real bug.
Pass 6 — Scenarios
- Is there a scenario switch? (A single input that drives the whole model's scenario.)
- Are there at least three scenarios (base / upside / downside)?
- Do all three actually flow through the model end-to-end?
- Is there a sensitivity table on the top 2-3 drivers (revenue growth, margin, WACC for DCF)?
Pass fails if: scenarios exist but don't actually switch the model, OR sensitivity tables are missing on a model going external.
Pass 7 — Documentation
- Is there a Documentation / Cover tab?
- Does it state: version, last refresh date, owner, purpose, scope, key assumptions, known limitations?
- Are the tabs in a sensible order (Cover / Inputs / P&L / BS / CF / DCF / Outputs)?
- Are circular references either eliminated or documented (e.g., interest-on-cash-sweep)?
- Is the model self-explanatory to a new reader?
Pass fails if: there's no documentation tab, OR the model has undocumented circulars.
The deliverable
After running all 7 passes, the review produces:
| Pass | Status (✅ / ⚠️ / 🔴) | Findings | Severity (P0 / P1 / P2) |
|---|
Plus:
- Top 3 fixes (the highest-leverage corrections)
- Reasonableness check on key outputs (do they pass the smell test?)
- Recommendation (use as-is / use with caveats / do not use)
Severity guide
- P0 — model produces a wrong answer; fix before use.
- P1 — model is fragile / opaque, not currently wrong; fix before next refresh.
- P2 — model is correct but improvable (documentation, polish, structure); fix during next major rebuild.
See also
