## Let's break down the components of a formula

Formulas involve three components:

**Variables**– Variables are the inputs or metrics your financial model is built on. Whether it’s your number of customers, cost of goods sold (COGS), salaries, or any other metrics, they’re all variables that determine the current and future financial performance of your business. You can use custom variables and/or system variables in your Finmark formulas. Variables are calculated at a monthly level.

**Offsets**– If you are building a formula to a past or future month, you can use offsets to shift the formula timeline. Add or subtract up to 60 months in either direction using a positive or negative number (of months) within a set of square brackets. For example, you can suffix a variable with “[3]” to tailor a formula to the third month in the future with respect to the current month. Or, use “[-3]” to tailor it to the third previous month in the past.**Operators**– You can use basic arithmetic operators, such as addition “+”, subtraction “-”, multiplication “*”, and division “/”. You can also use parentheses “(...)” to further customize your formulas. If you use multiple sets of parenthetical combinations in a single formula, then they are calculated from left to right (PEMDAS).

**Build a formula **

Now, let’s walk through building a formula step by step.

1. **Determine your variable**

First, determine your variable. You can pick from standard system variables curated by Finmark, or create custom variables.

2. **Set your timeframe**

3. **Add an operator**

Additional resources:

Variables & Formulas Blog Post