> For the complete documentation index, see [llms.txt](https://help.modelreef.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://help.modelreef.io/use-cases/portfolio-funds-vc-pe-and-family-offices/portfolio-company-forecasting.md).

# Portfolio Company Forecasting

This guide explains how to build consistent, comparable portfolio company forecasts for funds, VC, PE and family offices in Model Reef.

You will:

* Represent each portfolio company as its own model or scenario.
* Standardise structure, drivers and outputs across companies.
* Create fund level rollups for revenue, EBITDA, cash and valuation.
* Use scenarios for portfolio cases, exits and downside planning.

Model Reef is not a fund accounting or registrar system. It is a modelling and scenario engine for portfolio companies and consolidated portfolio views.

## When to use this pattern

Use this pattern when:

* You hold multiple operating companies in a fund or family office.
* You need consistent forward views across diverse businesses.
* Investment decisions depend on comparable KPIs and valuations.
* You want a shared structure for IC packs, board reporting and LP updates.

It combines well with:

* Build a Full Financial Model from Scratch
* Build a Multi Entity Group Model
* Build a Multi Scenario Valuation Pack
* LP Reporting Dashboard

## Architecture overview

Portfolio company forecasting uses:

* Company level models
  * One model per portfolio company.
  * Company specific branches, variables and drivers.
  * Standardised outputs (P\&L, Balance Sheet, Cashflow, Waterfall, valuation).
* Templates and structure
  * A core template for SaaS, services, manufacturing, etc.
  * Standard categories, KPIs and valuation metrics.
* Portfolio rollup
  * Aggregate company level outputs into a portfolio view.
  * Compare companies on a like for like basis.

{% stepper %}
{% step %}

### Create or import company level models

For each portfolio company:

* Create a new model using an appropriate template (for example SaaS, services, capital intensive).
* Or import from PDF, Excel or Xero QuickBooks to build a model automatically.
* Clean mapping so that P\&L, Balance Sheet and Cashflow reconcile and the Cash Waterfall and valuation are working.

Make sure that each company model:

* Uses a clear branch structure (divisions, regions, product lines).
* Has the same period range or aligned dates where possible.
* Has valuation enabled with FCFF or FCFE depending on use.

Each company model then serves as the atomic forecast for that portfolio asset.
{% endstep %}

{% step %}

### Standardise metrics and reporting layout

Define a standard reporting and KPI layout to apply to each company, for example:

* Revenue and growth by segment.
* Gross margin, EBITDA, EBIT and NPAT.
* Cash runway and net cash position.
* Key unit economics (for example ARR, ARPU, CAC, LTV, utilisation).
* Valuation metrics such as NPV, IRR and money multiple.

Implement this as:

* A standard custom report template.
* A standard dashboard pack (for example IC dashboard).

Apply the same template to each company model so that:

* Structure is consistent across the portfolio.
* KPIs are comparable without manual manipulation in spreadsheets.
  {% endstep %}

{% step %}

### Build portfolio level aggregation

Use a consolidating model or an external portfolio rollup (for example imported series) to combine outputs from company models, by:

* Importing key outputs (revenue, EBITDA, cash, valuation) as Data Library series into a Portfolio model.
* Or exporting CSV outputs from each model and reimporting them into a Portfolio model.

In the Portfolio model, create variables such as:

* Portfolio - Revenue by Company.
* Portfolio - EBITDA by Company.
* Portfolio - Cash and Net Debt by Company.
* Portfolio - NPV and IRR by Company.

Use branches to represent:

* Funds.
* Sub portfolios (for example Fund I, Fund II, Co investment, Direct holdings).

Aggregate these into portfolio level P\&L style views and summary dashboards.
{% endstep %}

{% step %}

### Incorporate holding periods, entry prices and exit assumptions

For each company, track:

* Entry Date and Entry Valuation or Price.
* Ownership percentage.
* Additional follow on capital injections.
* Target exit window and exit valuation assumptions.

You can represent these in either the company model or in the Portfolio model. In the Portfolio model, create variables for:

* Invested capital by company and by fund.
* Realised and unrealised value.
* Cashflows to and from the fund.

Use these to compute:

* Deal level IRR and money multiple.
* Fund level IRR and money multiple where you include all portfolio cashflows.
* Remaining value and upside under different scenarios.
  {% endstep %}

{% step %}

### Use scenarios for company and portfolio cases

Scenarios are separate models. Clone the base version of each company model into:

* Management Case.
* Base Case.
* Downside or Covid Case.
* Upside or stretch Case.

For each company model, adjust assumptions in each case, then refresh portfolio level series and compare:

* Revenue, EBITDA and cash projections.
* Enterprise value and equity value by company.
* Portfolio value, IRR and money multiple.
* Downside, base and upside outcomes at fund level.

This allows you to explore:

* Concentration risk.
* Dependency on specific companies or segments.
* Portfolio level resilience under stress.
  {% endstep %}
  {% endstepper %}

{% hint style="success" %}

### Check your work

* Each company model reconciles correctly and uses consistent accounting rules.
* Reporting templates and KPIs are applied consistently.
* Portfolio aggregation is aligned with ownership and fund structures.
* Scenario outcomes are used in IC, board and LP reporting.
  {% endhint %}

## Troubleshooting

<details>

<summary>Companies are hard to compare</summary>

Tighten the common reporting template and ensure that all models map to it, even if internal management formats differ.

</details>

<details>

<summary>Aggregation does not match fund level numbers</summary>

Confirm ownership percentages, capital flows and any off model items such as fees or SPVs.

</details>

<details>

<summary>Too many scenarios make portfolio views noisy</summary>

Restrict portfolio level reporting to a small number of named scenarios (for example Base, Downside, Upside) and keep experimental scenarios separate.

</details>

## Related guides

* [Build a Terminal Value Model](/how-tos/valuation/build-a-terminal-value-model.md)
* [Build a Variance Analysis Model](/how-tos/dashboards-and-reporting/build-a-variance-analysis-model.md)
* [Variable Auto Creation](/help/xero-integration/variable-auto-creation.md)
* [Period Toggle Rules](/syntax/chart-and-table-syntax/period-toggle-rules.md)