Financial Analysis & Forecasting
Prepared by Sumit Kumar Jain CA,CS,B.coPurpose of Spreadsheet:
Revised:11/22/2002
active
To illustrate concepts related to financial analysis and forecasting.The financial analysis uses a combination of ratios and industry averages toevaluate the financial performance of the company. Trend line graphs are alsogenerated, comparing the company's performance with the industry averages.Finally, the historical information is used to prepare a set of pro formafinancial statements using both linear and non-linear functions.Required Inputs:You will need to collect financial statements for several reporting periods. If youwant to benchmark the performance against the industry, then you will also needto collect industry averages. The spreadsheet is setup to capture five reportingperiods (annual, quarterly, monthly). All input fields are highlighted in yellow.For best results, SEC Filings are suggested since these reports provide moredetail than published financial statements.Note: A small red triangle in the upper right corner of a cell indicates that a comment hasbeen inserted. Point your mouse over the cell and the comment will appear.If a cell appears in red, this indicates a warning concerning a calculation.Worksheets:This spreadsheet consists of the following worksheets, divided into three sections:
A) Input Worksheets for financial analysis using historical data:WorksheetTitlePurpose
2Enter general information here - used on sever 3Enter comparative balances sheets for up to fiv4Enter comparative income statements for up to5Enter comparative cash flow statements for up
Caution: If you enter less than five years of historical information, certain wor formulas may have to be revised.B) Output Worksheets for evaluating financial performance:
6Calculates key financial information for further 7Calculates a series of ratios for further analysis8Compare ratio analysis to industry averages.9Horizontal analysis with corresponding trend lin10Common size financials in percentages and gr
C) Pro Forma / Forecasted Financials for Budgeting:
11Set of pro forma financials using simple assum
12Set of pro forma financials using linear trending13Set of pro forma financials using exponential s14Example of Scenario Analysis and Goal Seek15Preliminary budget analysis16Set of budgets per various assumptions and fo
Note: Some additional worksheets (Answer Reports 1 & 2) may appear in the spreadsheet due to the running of Solver.
Macros:No macros have been used in this spreadsheet to give everyone some assurance that no virusesare contained in the spreadsheet. However, you are free to add your own macros to save time.
Tools > Macro > Record New Macro
Excel Functions:This spreadsheet uses certain financial functions (such as =TREND) which might not befound in your version of Microsoft Excel. To take full advantage of financial and statisticalfunctions, you should install the Add On package titled: Analysis TookPak. Go to the maintool bar, select Tools => Add-Ins => check the Analysis TookPak option, insert your Excel CD and install the Analysis ToolPak. Also, you might want to install the Solver Add-in since this is useful for solving special forecasting issues (such as finding theoptimal exponential factor).Compatibility:This spreadsheet was created with Microsoft Excel 2000. Older versions of Excel (such as 97)may not be compatible with this spreadsheet.Corrections:With any “attempt” to build an Excel Model, I can easily make some mistakes.So if you have suggestions to make the model better, drop me an emailand I’ll be glad to improve the financial model. My email address is:Pro Forma - RegressionPro Forma - ExponentialScenario AnalysisBudget AnalysisFinal Budgetsmatt@exinfm.com
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