Three-Statement Financial Models, built on the Leontief Method
The Modeling FrameworkEvery model Simion Advisory delivers is built on the Input-Output framework developed by Dr. Wassily Leontief, the structural approach that won the 1973 Nobel Prize in Economics. Here's what that means in practice, and why it produces forecasts that hold up under investor scrutiny.
About Dr. Wassily Leontief
Wassily Leontief (1905–1999) was a Russian-born American economist who changed the field by creating Input-Output analysis, a method of mapping the interdependencies within an economy: how the output of every industry becomes an input for others. The work earned him the 1973 Nobel Prize in Economics.
His influence carried through his students. Four of his doctoral students went on to win Nobel Prizes of their own: Paul Samuelson, Robert Solow, Thomas Schelling and Vernon Smith. Few methodologies in economics have that kind of lineage.
What Leontief built, and what I borrow from it
Honest framing first: Leontief applied Input-Output analysis to national economies, not to startups. What I borrow is the structure of his idea, not the subject of it.
His insight was that an economy is a matrix of dependencies, and that once you map the dependencies, you can trace exactly how a change in one place carries through everywhere else. A model of a single business deserves the same discipline. So every operational driver in my models, pipeline, churn, headcount, pricing, payment terms, enters a system of explicit dependencies. Change one driver and the change carries mathematically through the P&L, the balance sheet and the cash flow at the same time, instead of being patched by hand in three places.
Most spreadsheets are a collection of calculations. A Leontief-structured model is a single system. That is the whole difference, and it is the difference a diligence team notices.
From Economic Theory to Business Strategy
Leontief applied his logic to nations. Simion Advisory applies it to a single business: every operational driver in, three linked financial statements out, the entire model updating in real time when any assumption moves.
- InputsSTEP 01
Every operational driver is captured as a structured input.
- CalculationSTEP 02
A linked three-statement calculation layer carries every change through the math.
- OutputsSTEP 03
P&L, Balance Sheet, and Cash Flow update in real time.
Every operational driver (Input) is mathematically linked to P&L, Balance Sheet, and Cash Flow (Output). If one lever moves, the entire model updates in real time.
The models are dynamic, designed for advanced scenario testing. Variables are categorized by sensitivity (High, Medium, Low), letting you run "what-if" simulations that prepare the business for any market condition.
The mathematics stays under the hood; what reaches your board and your investors is a clear set of visuals they can read without a walkthrough.
Watch one assumption move
Drop churn by two points. Revenue falls. The collections curve shifts. Working capital tightens. The cash runway shortens by four months. The DCF moves.
One change, five consequences, zero manual rework. That is what a dependency-mapped model does in a live meeting: the investor asks "what if", and the answer is on the screen before the discussion moves on.
The Input-Output diagram, applied to your business
Drivers on the left enter the calculation layer in the middle, which carries every change into a linked set of financial outputs on the right: every output traceable back to a driver, every driver testable under scenario.
Input Drivers
Scenario-Specific Parameters
Financial Outputs
Income Statement
P&L Dynamics
Balance Sheet
Asset/Liab Mapping
Cash Flow
Liquidity Forecasts
Distribution Waterfall
Investor Payouts
Scenario Testing
What-If Analysis
Free Model Review
See it on your own modelSend Gabriel your existing model. He'll review the structure, assumptions, and outputs against the Leontief Input-Output framework, and reply with the three changes that matter most.
Ready to commission a model on this framework?
Pricing and engagement options live on the Financial Modeling services page. Greenfield to Series A, simple to complex: transparent fixed-price packages.
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