When it comes to financial modeling, there are two main approaches to tab structure: vertical and horizontal. Some professionals also use a hybrid of the two.

Ultimately, the choice of structure depends on the specific needs of the model and the preferences of the financial professional.

Regardless of the approach selected, it’s important to apply best practices and follow a clear tab structure to ensure an effective and efficient modeling process.

Vertical Tab Structure:

• Cover - one tab
• Summary - one tab, may include multiple tables
• Assumptions - one tab, multiple assumptions can be stacked vertically
• Scenarios - one tab, which includes the key drivers of the business
• Model - One tab, which includes all financial statements and schedules, can be more than one tab for multiple business units
• Outputs - includes all output calculations in the model, such as ratios and valuation calculations

Horizontal Tab Structure:

• Cover - one tab
• Summary - may include more than one tab if there are multiple tables
• Assumptions - can be one tab or multiple tabs for the different categories
• Scenarios - one tab, which includes the key drivers of the business
• Schedules - each supporting schedule is built on its own tab
• Financial Statements - each statement can be built on its own tab OR created vertically on one tab
• Outputs - one or multiple tabs, and includes all outputs calculations in the model, such as ratios and valuation calculations.

Hybrid Tab Structure:

• Cover: A single tab for the model's cover page
• Executive Summary: One tab summarizing the model with tables and graphs
• Assumptions: All assumptions are grouped in one tab, organized for easy adjustment.
• Scenarios: One tab dedicated to key business drivers and scenario analysis
• Financial Statements: Compiled vertically on a single tab for a comprehensive financial overview
• Schedules: All schedules are also placed vertically on one tab, streamlining detail review
• Outputs: One or more tabs for output calculations like ratios and valuations, depending on complexity