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1: Modeling Best Practices 2: Reven

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33 "Simple"
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1:
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Important
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3:
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 Case Studies
on Our Client:
Shark Virtual Reality
 Templates: 7 Steps for Modeling, Financial Statement Creation and Valuation, which we will cov

1: Modeling Best Practices 2: Revenue Forecast 3: Income Statement

Welcome to Financial Modeling and Valuation Step 2 of 7!

Change only the BLUE fonts, then go to Step 3 on the next tab.
Orange Shaded Cells = Sparklines (for trend analysis)
Blue Fonts = hard coded (not calculated)
Click to Watch a Video on How to Navi
REVENUE BREAKDOWN (feeds into Income Statement on
the next tab) $ Value in 000's
1Q13 2Q13 3Q13
Venue 88 Hotel & Events Place
Total Revenue $ 191,900 $ 221,300 $ 254,500
YOY change N/A N/A N/A
QOQ change N/A 15.3% 15.0%
Quarterly Total Revenue Seasonality Sparkline (click + to see it)
ROOMS 75,000.0 86,500.0 99,500.0
YOY change N/A N/A N/A
QOQ change N/A 15.3% 15.0%
% of total 39.1% 39.1% 39.1%
Quarterly Revenue Line Item 1 of 2 Seasonality Sparkline (click + to see it)
FOOD AND BEVERAGE 116,900.0 134,800.0 155,000.0
YOY change N/A N/A N/A
QOQ change N/A 15.3% 15.0%
% of total 60.9% 60.9% 60.9%
Quarterly Revenue Line Item 2 of 2 Seasonality Sparkline (click + to see it)

Next Step: Please click on the tab called Step 3 Income Statement (or use the b
tion, which we will cover in Sections 39 through 52 as part of our Shark Virtual Reality Client Case Studies.

: Income Statement 4: Balance Sheet 5: Cash Flow Statement 6: DCF Valuation 7: Other Valua

Video on How to Navigate Step 2

2013 2014

4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15

$ 293,100 $ 960,800 $ 337,099 $ 388,400 $ 447,000 $ 514,099 ### $ - $ -

N/A 75.7% 75.5% 75.6% 75.4% 75.5% (100.0%) (100.0%)
15.2% 15.0% 15.2% 15.1% 15.0% -100.0% N/A

114,400.0 $ 375,400.0 131,599.0 151,400.0 174,500.0 200,599.0 $ 658,098.0 0.0 0.0

N/A N/A 75.5% 75.0% 75.4% 75.3% 75.3% (100.0%) (100.0%)
15.0% 15.0% 15.0% 15.3% 15.0% -100.0% N/A
39.0% 39.1% 39.0% 39.0% 39.0% 39.0% 39.0% N/A N/A

178,700.0 $ 585,400.0 205,500.0 237,000.0 272,500.0 313,500.0 1028500.00 0.0 0.0

N/A 75.8% 75.8% 75.8% 75.4% 75.7% (100.0%) (100.0%)
15.3% 15.0% 15.3% 15.0% 15.0% -100.0% N/A
61.0% 60.9% 61.0% 61.0% 61.0% 61.0% 61.0% N/A N/A

ment (or use the buttons at the top). Please remember to only change blue shaded text
nt Case Studies.
What We Will Case Studies
Learn in Other on Our Client:
7: Other Valuations Excel Exercises Shark Virtual Reality

2015 2016

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

$ - $ - $ - $ - $ - $ - $ - $ - $ -
(100.0%) (100.0%) -100.0% N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 $ - 0.0 0.0 0.0 0.0 $ - 0.0

(100.0%) (100.0%) -100.0% N/A N/A N/A N/A N/A N/A
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N/A N/A N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 $ - 0.0 0.0 0.0 0.0 $ - 0.0

(100.0%) (100.0%) -100.0% N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A N/A

lue shaded text. Thanks

 2017 2018

2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

$ - $ - $ - $ - 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A N/A
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0.0 0.0 0.0 $ - $ - $ - $ - $ - 0.0

N/A N/A N/A N/A 0.0% 0.0% 0.0% 0.0% N/A
N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 $ - $ - $ - $ - $ - 0.0

N/A N/A N/A N/A 0.0% 0.0% 0.0% 0.0% N/A
N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A N/A
2019 2020 2021 2022

0.0 0.0 0.0 0.0

N/A N/A N/A N/A

0.0 0.0 0.0 0.0

0.0% 0.0% 0.0% 0.0%

N/A N/A N/A N/A

0.0 0.0 0.0 0.0

0.0% 0.0% 0.0% 0.0%

N/A N/A N/A N/A

View Tips: For more space on your screen, please minimize the ribbon by clicking on the "^"
on the top right-hand corner of your screen or zoom out using the view controls on the
bottom-right hand corner of your screen.

2013 - 2022 Annual TREND Sparklines

Note from Chris: Please make sure to close the groups by clicking on "1" to the left and
slightly above column A or you will see quarterly numbers in this sparkline column.

Annual Total Revenue Sparkline (top line in $ change and bottom line in % change):

Annual Revenue Line 1 of 2 Sparkline (top line in $ change and bottom line in % change):

Annual Revenue Line 2 of 2 Sparkline (top line in $ change and bottom line in % change):
 Templates: 7 Steps for Modeling, Financial Statement Creation and Valuation, which we will cov

1: Modeling Best Practices 2: Revenue Forecast 3: Income Statement

Welcome to Financial Modeling and Valuation Step 3 of 7!

Change only the BLUE fonts, then go to Step 4 on the next tab.
Orange Shaded Cells = Sparklines (for trend analysis)
Blue Fonts = hard coded (not calculated)
Green = links to data from another tab
Click to Watch a Video on How to Na
INCOME STATEMENT $ Value in 000's 1Q13 2Q13 3Q13
Revenue 191,900.0 221,300.0 254,500.0
YOY change N/A N/A N/A
QOQ change N/A 15.3% 15.0%
Quarterly Revenue Sparkline (click '2' above A1 to see it).

COGS 57,500.0 66,390.0 76,350.0

% of Revenue 30.0% 30.0% 30.0%
Gross profit 134,400.0 154,910.0 178,150.0
Gross margin 70.0% 70.0% 70.0%

Sales and Marketing 19200.00 22,130.0 25,450.0

% of Revenue 10.0% 10.0% 10.0%
YOY change
QOQ change 15.3% 15.0%
Quarterly Sales and Marketing Sparkline (click '2' above A1 to see it).

Research and Development 19,190.0 22,130.0 25,450.0

% of Revenue 10.0% 10.0% 10.0%
YOY change
QOQ change 15.3% 15.0%
Quarterly Research and Development Sparkline (click '2' above A1 to see it).

General and Administrative 19,190.0 22,130.0 25,450.0

% of Revenue 10.0% 10.0% 10.0%
YOY change
QOQ change 15.3% 15.0%
Quarterly General and Administrative Sparkline (click '2' above A1 to see it).

Depreciation 0.0 0.0 0.0

% of Revenue 0.0% 0.0% 0.0%
YOY change
QOQ change N/A N/A
Quarterly Depreciation Sparkline (click '2' above A1 to see it).

Total Expenses 115,080.0 132,780.0 152,700.0

% of Revenue 60.0% 60.0% 60.0%
 Yoy Change
Income (loss) from operations 76,820.0 88,520.0 101,800.0
% of Revenue 40.0% 40.0% 40.0%
EBITDA 76,820.0 88,520.0 101,800.0
======
% of Revenue 40.0% 40.0% 40.0%
ID#AAAAKTogcNg
Other income (expense),
(2020-09-23net 0.0 0.0 0.0
06:34:50)
% of Revenue 0.0% 0.0% 0.0%
Non-GAAP
GAAP Income EPS isincome taxes
(loss) before 76,820.0 88,520.0 101,800.0
also called
% of Revenue
"Pro Forma" EPS 40.0% 40.0% 40.0%
and it
GAAP Provision excludes
(benefit) for income taxes 0.0 31,867.2 36,648.0
non-recurring
Tax Rate
items (like a 0.0% 36.0% 36.0%
1x lawsuit) and
non cash items
like
GAAP Net depreciation.
income (loss) , $ 76,820.0 $ 56,652.8 $ 65,152.0
% of RevenueFor
etc. 40.0% 25.6% 25.6%
simplicity,
GAAP EPS*let's just N/A N/A N/A
exclude
YOY change N/A N/A N/A
depreciation
GAAP Shares (in 000's) 0.0 0.0 0.0
for our
Non_GAAP EPS
Non-GAAPestimate.
EPS (excludesSomedepreciation) N/A N/A N/A
YOY changecompanies N/A N/A N/A
adjust many
expense line
items,
Next Step:including Please
S&M click on the tab called Step 4 Balance Sheet (or use the butto
etc when
reconcilling
the difference
between GAAP
and Non-GAAP
and stock based
compensation,
among other
items.
on, which we will cover in Sections 39 through 52 as part of our Shark Virtual Reality Client Case Studies.

Income Statement 4: Balance Sheet 5: Cash Flow Statement 6: DCF Valuation 7: Other Valuati

Video on How to Navigate Step 3

4Q13 2013 1Q14 2Q14 3Q14 4Q14 2014 1Q15 2Q15
293,100.0 960,800.0 337,099.0 388,400.0 447,000.0 514,099.0 ### 0.0 0.0
N/A 75.7% 75.5% 75.6% 75.4% 75.5% (100.0%) (100.0%)
15.2% 15.0% 15.2% 15.1% 15.0% -100.0% N/A

87,930.0 288,170.0 101,129.7 116,520.0 134,100.0 154,229.7 505,979.4 0.0 0.0

30.0% 30.0% 30.0% 30.0% 30.0% 30.0% 30.0% N/A N/A
205,170.0 672,630.0 235,969.3 271,880.0 312,900.0 359,869.3 1,180,618.6 0.0 0.0
70.0% 70.0% 70.0% 70.0% 70.0% 70.0% 70.0% N/A N/A

29,310.0 96,090.0 33,709.9 38,840.0 44,700.0 51,409.9 168,659.8 0.0 0.0

10.0% N/A 10.0% 10.0% 10.0% 10.0% 10.0% N/A N/A
N/A 75.6% 75.5% 75.6% 75.4% 75.5% (100.0%) (100.0%)
15.2% 15.0% 15.2% 15.1% 15.0% -100.0% N/A

29,310.0 96,080.0 33,709.9 38,840.0 44,700.0 51,409.9 168,659.8 0.0 0.0

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% N/A N/A
N/A 75.7% 75.5% 75.6% 75.4% 75.5% (100.0%) (100.0%)
15.2% 15.0% 15.2% 15.1% 15.0% -100.0% N/A

29,310.0 96,080.0 33,709.9 38,840.0 44,700.0 51,409.9 168,659.8 0.0 0.0

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% N/A N/A
N/A 75.7% 75.5% 75.6% 75.4% 75.5% (100.0%) (100.0%)
15.2% 15.0% 15.2% 15.1% 15.0% -100.0% N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

175,860.0 576,420.0 202,259.4 233,040.0 268,200.0 308,459.4 ### 0.0 0.0

60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% N/A N/A
 N/A 75.8% 75.5% 75.6% 75.4% 75.6% -100.0% -100.0%
117,240.0 384,380.0 134,839.6 155,360.0 178,800.0 205,639.6 674,639.2 0.0 0.0
40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% N/A N/A
117,240.0 384,380.0 134,839.6 155,360.0 178,800.0 205,639.6 674,639.2 0.0 0.0
40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% N/A N/A
117,240.0 384,380.0 134,839.6 155,360.0 178,800.0 205,639.6 674,639.2 0.0 0.0
40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% N/A N/A
42,206.4 110,721.6 40,451.9 46,608.0 53,640.0 61,691.9 202,391.8 0.0 0.0
36.0% 28.8% 30.0% 30.0% 30.0% 30.0% 30.0% N/A N/A

$ 75,033.6 ### $ 94,387.7 ### ### ### ### $ - $ -

25.6% 28.5% 28.0% 28.0% 28.0% 28.0% 28.0% N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A N/A N/A N/A

(or use the buttons at the top). Please remember to only change blue shaded text. Tha
Case Studies.
What We Will Case Studies
Learn in Other on Our Client:
7: Other Valuations Excel Exercises Shark Virtual Reality

3Q15 4Q15 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
(100.0%) (100.0%) -100.0% N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A N/A
(100.0%) (100.0%) -100.0% N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A N/A
(100.0%) (100.0%) -100.0% N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A N/A
(100.0%) (100.0%) -100.0% N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A N/A
 -100.0% -100.0% -100.0% N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A N/A

$ - $ - $ - $ - $ - $ - $ - $ - $ -
N/A N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A N/A N/A N/A N/A

haded text. Thanks

2Q17 3Q17 4Q17 2017 1Q18 2Q18 3Q18 4Q18
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A 0.0% 0.0% 0.0% 0.0%
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A 0.0% 0.0% 0.0% 0.0%
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A 0.0% 0.0% 0.0% 0.0%
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A
 N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A 0.0% 0.0% 0.0% 0.0%

$ - $ - $ - $ - $ - $ - $ - $ -
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A N/A N/A N/A
2018 2019 2020 2021 2022
0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0

N/A 0.0% 0.0% 0.0% 0.0%
0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0

N/A 0.0% 0.0% 0.0% 0.0%
N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0

N/A 0.0% 0.0% 0.0% 0.0%
N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0

N/A 0.0% 0.0% 0.0% 0.0%
N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0

N/A 0.0% 0.0% 0.0% 0.0%
N/A N/A N/A N/A N/A

0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A
 N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0
N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0
N/A 0.0% 0.0% 0.0% 0.0%

$ - $ - $ - $ - $ -
N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A
N/A N/A N/A N/A N/A
0.0 0.0 0.0 0.0 0.0

N/A N/A N/A N/A N/A

N/A N/A N/A N/A N/A
View Tips: For more space on your screen, please minimize the ribbon by clicking on the "^" on the top
right-hand corner of your screen or zoom out using the view controls on the bottom-right hand corner of
your screen.

2013 - 2022 Annual TREND Sparklines

Note from Chris: Please make sure to close the groups by clicking on "1" to the left and slightly above
column A or you will see quarterly numbers in this sparkline column.

Annual Revenue Sparkline (top line in $ change and bottom line in % change):

Annual COGS Sparkline (top line in $ change and bottom line in % of revenue):

Annual Sales and Marketing Sparkline (top line in $ change and bottom line in % of revenue):

Annual Research and Development Sparkline (top line in $ change and bottom line in % of revenue):

Annual General and Administrative Sparkline (top line in $ change and bottom line in % of revenue):

Annual Depreciation Sparkline (top line in $ change and bottom line in % of revenue):

Annual Total Expenses Sparkline (top line in $ change and bottom line in % of revenue):
 Annual EBITDA Sparkline (top line in $ change and bottom line in % of revenue):

Annual Tax Rate Sparkline:

Annual GAAP Net income (loss) Sparkline (top line in $ change and bottom line in % of revenue):

Annual Non-GAAP EPS (excludes depreciation) Sparkline (Share Count)

 Templates: 7 Steps for Modeling, Financial Statement Creation and Valuation, which we will cov

1: Modeling Best Practices 2: Revenue Forecast 3: Income Statement

Welcome to Financial Modeling and Valuation Step 4 of 7!

Change only the BLUE fonts, then go to Step 5 on the next tab.
Orange Shaded Cells = Sparklines (for trend analysis)
Blue Fonts = hard coded (not calculated)
Click to Watch a Video on How to Na
Green = links to data from another tab
BALANCE SHEET $ Value in 000's ======
======
1Q13 2Q13 3Q13
ID#AAAAKTogcOU
ID#AAAAKTogcN4
(2020-09-23
(2020-09-23
Current assets 06:34:50)
06:34:50)
Cash and cash equivalents Inventory
You can also
76,820.0 is
133,472.8 198,624.8
not
make used
this for
a 0.0
Short-term investments 0.0 companies
all 0.0
percent of
Accounts receivable 0.0 course
(of
COGS. 0.0
Pleaseones 0.0
Accounts Receivable as a % of revenue that
0.0% don't
remember that have
0.0% 0.0%
Inventory inventory
all
0.0 companiescan
0.0 0.0
ignore
are this
different
Inventory as a % of revenue 0.0%
line 0.0% 0.0%
when item).
it comes
Total Current Assets 76,820.0 133,472.8
to modeling. 198,624.8
Long Term Assets Thanks
======
**Equipment we own, net of accumulated depreciation and inclusive of capex. ID#AAAAKTogcNk
0.0 0.0 0.0
Here is How We Calculate Capex (same as Purchase of Equipment) (2020-09-23
06:34:50)
Depreciation (linked to the Income Statement) 0.0 you received
If 0.0 0.0
Capex (we need to calculate this here as it feeds into the C.F. Statement 0.0
payment for 0.0 0.0
Capex as a % of revenue items that 0.0%
0.0% you 0.0%
sell before you
deliver the
Total Long Term Assets 0.0
items to the0.0 0.0
TOTAL ASSETS customer,133472.8
76820.0 then 198624.8
you can have
"deferred
revenue" as a
Current liabilities liability….whi
Accounts payable ch
0.0 decreases0.0as 0.0
Accounts Payable as a % of revenue 0.0% deliver0.0%
you the 0.0%
item to the
Short-term debt 0.0
customer in 0.0 0.0
Total Current Liabilities future
0.0 0.0 0.0
Long Term Liabilities quarters.
Long-term debt 0.0 0.0 0.0
Total Long Term Liabilities 0.0 0.0 0.0
TOTAL LIABILITIES 0.0 0.0 0.0

Retained Earnings 76,820.0 133,472.8 198,624.8

Common Shares 0.0 0.0 0.0
Additional Paid-in-Capital 0.0 0.0 0.0
TOTAL SHAREHOLDER'S EQUITY 76,820.0 133,472.8 198,624.8

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 76,820.0 133,472.8 198,624.8

Do Assets = Liabilities + Equity? YES YES YES
- - -
** The equipment that we own is equal to the amount of equipment we owned
in the previous quarter minus the amount that the equipment has depreciated
since the previous quarter PLUS the capex we spent to buy more equipment.
Please see the math/logic in the cells in the Equipment section above under Long
Term Assets. Thanks

Next Step: Please click on the tab called Step 5 Cash Flow Statement (or use th
n, which we will cover in Sections 39 through 52 as part of our Shark Virtual Reality Client Case Studies.
======
ncome Statement 4: Balance Sheet 5: Cash Flow Statement
ID#AAAAKTogcOE 6: DCF Valuation 7: Other Valuatio
(2020-09-23
06:34:50)
Remember that a View Tips: For more space on your screen,
Balance Sheet minimize the ribbon by clicking on the "^"
is a "snapshot" right-hand corner of your screen or zoom
and, as a view controls on the bottom-right hand co
result, the screen.
Video on How to Navigate Step 4year end
results are
2013 always the same 2014
4Q13 1Q14 2Q14
as Q4 of that 3Q14 4Q14 1Q15 2Q15
year (unlike
the Income
273,658.4 273,658.4 Statement).
368,046.1 476,798.1 601,958.1 745,905.8 745,905.8 745,905.8 745,905.8
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
0.0 0.0 33,709.9 38,840.0 44,700.0 51,409.9 51,409.9 0.0 0.0
0.0% 0.0% 10.0% 10.0% 10.0% 10.0% 10.0% N/A N/A
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% N/A N/A
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- - - - - - - - -
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3Q15 4Q15 2015 1Q16 2Q16 3Q16 4Q16 2016 1Q17

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2013 - 2022 Annual TREND Sparklines

Note from Chris: Please make sure to close the groups by clicking
on "1" to the left and slightly above column A or you will see
quarterly numbers in this sparkline column.
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avigate Step 5

2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 3Q18

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0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

blue shaded text. Thanks

 Case Studies
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4Q18 2018 2019 2020 2021 2022

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4Q18 2018 2019 2020 2021 2022

0.0 0.0 0.0 0.0 0.0 0.0
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of your screen or zoom out using the view controls on the
bottom-right hand corner of your screen.

2013 - 2022 Annual TREND Sparklines

Note from Chris: Please make sure to close the groups by

clicking on "1" to the left and slightly above column A or
you will see quarterly numbers in this sparkline column.

2011 - 2020 Annual Sparklines

 Templates: 7 Steps for Modeling, Financial Statement Creation and Valuation, which we will cov

1: Modeling Best Practices 2: Revenue Forecast

Welcome to Financial Modeling and Valuation Step 6 of 7!

Change only the BLUE fonts, then go to Step 7 on the next tab.
Blue Fonts = hard coded (not calculated)
Green = links to data from another tab
Discounted Cash Flow Price Target Model $ Value in 000's

DCF Calculation Step 1: Get FCF from Cash Flow Statement Tab.

2018 2019
Free Cash Flow (FCF): $0 $0

Step 2: Calculate the Weighted Average Cost of Capital (which is the discount rate we will use to discount our FCFs).

Weighted Average Cost of Capital:

=
Cost of Equity x % of the Capital Structure that is Equity (Market Cap)
+
Cost of Debt x % of the Capital Structure that is Debt
=
7.3%
+
N/A
=
N/A

Step 2.1: Calculate Cost of Equity.

Cost of Equity:
=
Risk Free Rate
+
Beta * (Stock Market Return - Risk Free Rate)
=
14.5%

Step 2.2: Calculate Cost of Debt.

 Step 2.2: Calculate Cost of Debt.

Cost of Debt:
=
Cost of Debt * (1-tax rate)
=
N/A

Step 3: Calculate Net Present Value.

NPV = N/A

Step 4: Calculate Terminal Value.

Long Term Growth =

Terminal Value =
TV Discounted =

Step 5: Calculate Target Firm Value.

Target Equity Value = N/A

Less Debt = $0
Target Value = N/A
Shares = -
Target Price Per Share N/A

Extra Step: Sensitivity Analysis Value.

N/A
1% N/A
Growth

2% N/A
3% N/A

Green = Bullish

Next Step: Please click on the tab called Step 7 Other Valuations+Compare (o
tion and Valuation, which we will cover in Sections 39 through 52 as part of our Shark Virtual Reality Client C

ue Forecast 3: Income Statement 4: Balance Sheet 5: Cash Flow Statement 6: DCF Valuation

Click to Watch a Video on How

2020 2021 2022

$0 $0 $0

we will use to discount our FCFs).

ty (Market Cap)

% of Capital Structure that is Equity 50%

% of Capital Structure that is Debt 50%

Market Cap today = $0

Stock Price today = $30

Assume Risk Free Rate = 2.5%

Assume Beta= 2.00 Assume Stock Market Return = 8.5%

 Assume Cost of Debt = 5.0% Tax Rate = N/A

2%
N/A Assume Long Term Growth = 2%
NA
WA
CC

N/A N/A N/A N/A

N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A

Orange = Base Case Red = Bearish Case

Other Valuations+Compare (or use the buttons at the top). Please remember to only ch
 irtual Reality Client Case Studies.
What We Will Case Stud
Learn in Other on Our Clie
6: DCF Valuation 7: Other Valuations Excel Exercises Shark Virtual Rea

Watch a Video on How to Navigate Step 6

 Bearish Case

member to only change blue shaded text. Thanks

 Case Studies
on Our Client:
Shark Virtual Reality
 ======
ID#AAAAKTogcNw
(2020-09-23
Templates: 7 Steps for Modeling, Financial Statement Creation and Valuation, which 06:34:50)
we will cov
If you are
doing an IPO
and there is no
1: Modeling Best Practices 2: Revenue Forecast 3: Income Statement
share price,
you can enter
in what you
Welcome to Financial Modeling and Valuation Step 7 of 7 think the IPO
price will be
Nothing to do here except enter the current share price here: 30.00 (note: IPOs are
usually priced
Green = links to data from another tab at a 30% or so
Additional Valuation Methodologies discount to
fair value)

Price to Revenue Multiple Valuation

VALUATION METHODOLOGY 1 OF 3: P/R
2018 2019 2020
Revenue $0 $0 $0
Yearly Growth % N/A N/A N/A

Bulllish Price Target

@ 10x's Revenue
Price Target that Year N/A N/A N/A
Market Cap Target that Year $0 $0 $0
Bearish Price Target
@ 5x's Revenue
Price Target that Year N/A N/A N/A
Market Cap Target that Year $0 $0 $0
'Just Right' Price Target
@ 7.5x's Revenue
Price Target that Year N/A N/A N/A
Market Cap Target that Year $0 $0 $0
Discount 2022 'Just Right' Price Target to Today's Target Price N/A

VALUATION METHODOLOGY 3 OF 3: DCF DCF Valuation Price Per Share Target $

Bullish Case N/A
Bearish Case N/A
Just Right Case N/A

% to
BOTTOM LINE - HERE IS OUR TARGET PRICE Price Target Target
VALUATION METHODOLOGY 1 OF 3 (P/R) N/A N/A
VALUATION METHODOLOGY 2 OF 3 (P/E) N/A N/A
VALUATION METHODOLOGY 3 OF 3 (DCF) N/A N/A
AVERAGE OF ALL 3 'JUST RIGHT' PRICE TARGETS N/A N/A OU
O

Congratulations; you are finished with your modeling and valuation!

 ======
ID#AAAAKTogcNw
(2020-09-23
06:34:50)
n, which we will cover in Sections 39 through 52 as part of our Shark Virtual Reality Client Case Studies.
If you are
doing an IPO
and there is no
ncome Statement
share price, 4: Balance Sheet 5: Cash Flow Statement 6: DCF Valuation 7: Other Valuatio
you can enter
in what you
think the IPO
price will be
Implied
(note: IPOs are Market Cap. 0.0
usually priced
at a 30% or so Click to Watch a Video on How to Navigate Step
discount to
fair value)

nue Multiple Valuation Price to Earni

VALUATION METHODOLOGY 2 OF 3: P/E
2021 2022 2018
$0 $0 EPS N/A
N/A N/A Yearly Growth % N/A

Bulllish Price Target

@ 2x PEG that year
N/A N/A Price Target that Year N/A
$0 $0 Market Cap Target that Year N/A
Bearish Price Target
@ 1x PEG that year
N/A N/A Price Target that Year N/A
$0 $0 Market Cap Target that Year N/A
'Just Right' Price Target
@ 1.5x PEG that year
N/A N/A Price Target that Year N/A
$0 $0 Market Cap Target that Year N/A
Discount 2022 'Just Right' Price Target to Today's Target Price N/A

Price Per Share Target $

N/A
N/A
N/A

OUR
OURTARGET
TARGETPRICE
PRICE
nt Case Studies.
What We Will Case Studies
Learn in Other on Our Client:
7: Other Valuations Excel Exercises Shark Virtual Reality

How to Navigate Step 7

Price to Earnings Multiple Valuation

2019 2020 2021 2022
N/A N/A N/A N/A
N/A N/A N/A N/A

N/A N/A N/A N/A

N/A N/A N/A N/A

N/A N/A N/A N/A

N/A N/A N/A N/A

N/A N/A N/A N/A

N/A N/A N/A N/A
e Studies
r Client:
al Reality
Templates: 7 Steps for Modeling, Financial Statement Creation and Valuation, which we will cov

1: Modeling Best Practices 2: Revenue Forecast

Exercise #
Exercise #2
Exercise #3
Exercise #4
Exercise #5
Exercise #6
Exercise #7
Exercise #8
Exercise #9
Exercise #10
tement Creation and Valuation, which we will cover in Sections 39 through 52 as part of our Shark Virtual Re

2: Revenue Forecast 3: Income Statement 4: Balance Sheet 5: Cash Flow Statement

What Finance Concepts Are Covered?

GDP & IMF Data
World Bank & Inflation Data
Unemployment
Portfolio Dashboarding: Your Finance Radar
Screen!

Dashboard
Portfolio Help &
Dashboard
Data Builder
Stock Markets, Indexes, Valuation, Recessions
and Bull Markets
Stock Market Sector Analysis, Market Caps, Risk
Management Concepts
Stock Portfolio Creation and Accessing Domestic
and International Stock Information.
Foreign Exchange Impact on a Portfolio, Share
Counts, Research Analyst Tracking.
 Identifying Sector Drivers, Populating Stock
Market Tables, Calculating Sector Exposure (for
Risk Management). Investing Position Sizing
Analysis.
 Beta (measures stock volatility), Additions to
our Portfolio Management Dashboard, including
48 types of data inputs.
39 through 52 as part of our Shark Virtual Reality Client Case Studies.
What
Learn
5: Cash Flow Statement 6: DCF Valuation 7: Other Valuations Excel E

What Excel Concepts are Covered?

Basics, Charting, Filtering and Forecasting, Making Cool Navigation
Icons / Buttons in Excel the incredibly easy way!
More Advanced Charting & Filtering
Formulas Intro & Additional Charting
Advanced Formatting, Adding Buttons, Dashboard Navigation Ideas
and More (Your Manager & Clients Will Love this!)

Dashboard
Help & Find Correct
Data Builder Ticker Help
Advanced Formulas, Conditional Formatting, If Statements, Naming
Inputs in Complex Formulas and More Advanced Charting & Filtering
Accessing Live Stock Market Data Feeds, Pivot Tables, Advanced
Conditional Formatting and Filtering, Excel Add-Ins, Data Analysis etc.
Introducing the Yahoo Finance API! Don't worry, I will explain exactly
how to use this unbelievable FREE resource over the next few lectures.
Spinners (very cool feature), Goal Seek, Advanced Formatting, Misc.
Portfolio Calculation Using Excel Formulas
Vlookup Function, Arrays, Automatic Data Insertion, More Advanced
Conditional Formatting.
Grouping, Paste Special, Summary Formulas,
 What We Will Case Studies
Learn in Other on Our Client:
Excel Exercises Shark Virtual Reality
 Templates: 7 Steps for Modeling, Financial Statement Creation and Valuation, which we will cov

1: Modeling Best Practices 2: Revenue Forecast 3: Income Statement

Please only do theses cases when asked to do so in the course (meaning sta
Section # and
Case #
Section Title that the Case # is In
Case #1
Section 40:
"Forecasting Revenue and Case Study #1: Projecting Shark VR’s Revenue"
Case #2
Section 41:

"Intro to the Income Statement & Case #2: Making Shark VR’s Income
Statement"
Case #3
Section 42:

"Intro to the Balance Sheet & Case #3: Making Shark VR’s Balance Sheet"

Case #4
Section 43:

"Intro to the Cash Flow Statement & Case #4: Making Shark VR’s CF
Statement"

Case #5
Section 45:

"The IPO of Shark Virtual Reality Part 1 (Case #5 Modeling Shark VR)"
Case #6
Section 47:
"Valuation Using DCF & Case #6: Valuing Shark VR Using DCF"

Case #7
Section 48:
"Valuation Using Price/Revenue (P/R) & Case #7: Valuing Shark VR Using
P/R"

Case #8
Section 49:
Valuation Using Price/Earnings (P/E) & Case #8: Valuing Shark VR Using
P/E"

Case #9 Section 51:

 How Hedge Funds & Mutual Funds Model and Value Shark VR (Case #9
and #10)"

Case #10
Section 51:
How Hedge Funds & Mutual Funds Model and Value Shark VR (Case #9
and #10)"
ation, which we will cover in Sections 39 through 52 as part of our Shark Virtual Reality Client Case Studies.

3: Income Statement 4: Balance Sheet

urse (meaning starting in

Case Questions Video
Explanation Link
Click HERE for a video explanation of the questions for Case #1
Click HERE for a video explanation of the questions for Case #2
Click HERE for a video explanation of the questions for Case #3

Click HERE for a video explanation of the questions for Case #4

Click HERE for a video explanation of the questions for Case #5

Click HERE for a video explanation of the questions for Case #6

Click HERE for a video explanation of the questions for Case #7

Click HERE for a video explanation of the questions for Case #8

Click HERE for a video explanation of the questions for Case #9

Click HERE for a video explanation of the questions for Case #9

Click HERE for a video explanation of the questions for Case #10
r in Sections 39 through 52 as part of our Shark Virtual Reality Client Case Studies.

Balance Sheet 5: Cash Flow Statement 6: DCF Valuation 7: Other Valuations

Case Questions (please watch the video referenced in the cell to the left before asnwering these
questions. Thanks)

Tony’s uncle Wayne Bruce gave him $100k to start his company in December of 2012. Wayne Bruce
owns 10% of the company, resulting in a valuation of $1 million.
Case Study #1: Completing the Revenue Forecast Tab (called Step 2 Revenue Forecast):

The date is January 1st of 2013. Your friend Tony Shark approaches you and wants you to help him
forecast his revenue estimates from 2013 through 2022. Use the below assumptions to populate
quarterly revenue forecasts for 2013-2018, and annual forecasts from 2019-2022.

1. The two revenue line items should be called License Revenue and Maintenance Revenue.

1.1: Each license comes with a recurring mandatory maintenance revenue portion equal to 20% of the
license contract value.

1.2: Seasonality for license sales is as follows: Q4 accounts for 50% of revenue for the year, Q2 is 30%
of revenue for the year, Q1 and Q3 are at 10% each.

2. Assume no revenue in 2013 as the company is still developing its product.

3. 2014 expects to sell 1,200 licenses at $100 each plus 20% mandatory maintenance every year
(regardless of when the customer buys it in the calendar year). No churn (meaning no customer
turnover in 2014).

4. 2015 expects to sell 700% more licenses than 2014 for $100 each plus the 20% annual maintenance.
Assume churn of 5% of customers from the previous year.

5. 2016 expects to sell 800% more licenses than 2015 for $100 each. Churn of 3% from customers that
bought in previous years.

6. 2017 is a phenomenal growth year and the company expects to sell 900% more licenses than 2016
for $100 each. Churn of 2% from customers now in previous years.
7. In 2018, new competitors are winning/taking away customers from Shark Virtual Reality. The
company expects to sell only 500% more licenses at the new, lower price of $95 each. Churn jumps to
5% of previous years’ customers, given new VR technology vendors for customers to choose from.

8. Forecast 2019 through 2022 by decreasing License revenue growth by 200% annually in 2019 and
another 200% decrease in 2020 and keeping it constant at 50% year over year growth in 2021 and also
50% year over year growth in 2022 (as the company’s growth stabilizes). Keep churn constant at 5% of
previous years’ customers. Keep the new price of $95 constant from 2019-2022.

9. Forecast 2019-2022 Maintenance growth by calculating the % change year-over year in your
quarterly sales allocation chart.

Case Study #2: Completing the Income Statement Forecast Tab (called Step 3 Income Statement Tab):

The date is January 2nd of 2013 and Tony asks you to forecast the income statement.

1. Revenue was already completed in Case #1.

2. COGS Decrease every year from 12% in 2014 to 9% in 2017, where they remain constant.

3. Forecasting costs:

3.1: Sales and Marketing is 30% of revenue in 2014, 32% in 2015, 33% in 2016, and then decreases
annually by 1%

3.2: General and Administrative increases from 10% of revenue in 2014, to 15% in 2015, 18% in 2016,
22% in 2017, and then decreases by 1% annually going forward

3.3: Research and Development increases from 33% of revenue in 2014, to 34% in 2015, 35% in 2016,
and then decreases by 1% annually

3.4: Depreciation expense is held constant at 1% of revenue.

4. Assume a tax rate of 30% on GAAP profits.

5. Assume GAAP shares outstanding to remain constant at 200 million from 2013-2017, and add
another 100 million in 1Q18 as the result of the IPO. (The cash proceeds from the IPO, and how to
document them, will be discussed later.)
6. In 2013 make Sales and Marketing, R&D and G&A all have 1 for expenses in Q1-Q3 and then they all
have 2 for expenses in Q4 of 2013.

Case Study #3: Completing the Balance Sheet Forecast Tab (called Step 4 Balance Sheet Forecast
Tab):

The date is January 3rd of 2013 and Tony asks you to forecast the balance sheet.

1. The cash and cash equivalents line item on the balance sheet is the result of the initial $100k cash
investment and each period’s increase or decrease in cash as reported in the Cash Flow statement tab.

2. Tony Shark makes his first equipment purchase in 4Q13A using $80k.

3. Capex is held constant at 2% of revenue.

4. Accounts Receivable is held constant at 15% of revenue, as is Accounts Payable.

5. The company purchases $200k worth of short-term investments spread evenly throughout 2016,
and sells them all in Q1 of 2017.

6. Ensure that the cells in row 44 displays “YES” to ensure that the Assets equals Liabilities and Equity.

Case Study #4: Completing the Cash Flow Statement Forecast Tab (called Step 5 Cash Flow Forecast):

The date is January 4th of 2013 and Tony asks you to forecast the cash flow statement (it's already
done!). Please answer the following questions

1. Using only the Cash Flow Statement, what was the Cash Balance at the beginning and at the ending
of 2016?

2. Using only the Balance Sheet, what was the Cash Balance in 2015 and in 2016?

3. Using only the Cash Flow Statement, what was the Net Income in 2014?

4. Using only the Income Statement, what was the Net Income in 2014?

Case Study #5: The date is now January 1st, 2018 and our firm of Morgan, Haroun Sachs Company is
doing the IPO.

Please find the S-1 on the SharkVirtualReality.com in the Investor Relations portion of the website and
answer the following questions:
1. How many shares are being offered?

2. What are 3 risk factors?

3. What is the background of the CMO and why are they a critical part of the management team?

4. What is a competitive advantage for Shark’s technology?

5. What is the background of the CFO?

6. How much does the company expect to increase headcount by?

Case Study #6: Completing the DCF Tab (called Step 6 DCF Tab):

The date is January 1st, 2018 and Tony asks you to forecast the DCF valuation. This tab is already
complete, and ready for you to analyze. Ensure that cost of capital does not take debt into account, as
there is no debt in the capital structure.

Assume Risk Free Rate = 2.0%

Use the following inputs: Assume Risk Free Rate = 2.0%
Assume Beta= 2
Assume Beta= 2
Assume Stock Market Return = 8.0%
Assume Stock Market Return = 8.0%
Assume Long Term Growth = 2%
Assume Long Term Growth = 2%

Case Study #7: Completing the P/R target (called Step 7 Compare Valuations Tab):

The date is January 1st, 2018 and Tony asks you to forecast the P/R valuation. This tab is already
complete, and ready for you to analyze.

Remember to research where other, similar, software companies are valued at. For example, Splunk
(SPLK) trades at 8X revenue, whereas Workday (WDAY) trades at 11X.

Case Study #8: Completing the P/E target (called Step 7 Compare Valuations Tab):

The date is January 1st, 2018 and Tony asks you to forecast the P/E based valuation. This tab is
already complete, and ready for you to analyze.

Remember: the higher the PEG, the higher the P/E. A higher P/E means greater bullishness in the stock.

Case Study #9: The Date is now January 10th of 2018 and you work for a hedge fund.
Your portfolio manager at the hedge fund that you work at is interested in investing in Shark Virtual
Reality Software as either a short or as a long. She says she is willing to pay a PEG of 1.5x and P/R of
10x on estimated 2019 earnings growth and revenue. Using the Step 7 tab you have already built, what
should be the average target price in 2019? Please don't forget to discount your target price to 2018
using the WACC you used in the DCF Exercise. If the stock is now at $400, how much upside (or
downside) do you predict there is to your target price?

Case Study #10: the date is January 11th of 2018 and you work for a mutual fund.

Your manager is interested in potentially investing in Shark Virtual Reality Software. However, he says
he doesn't know much about the valuation of the company. He is willing to pay a PEG of 1x on
estimated 2022 earnings growth.

Additionally, we know that the mutual fund portfolio manager is more value focused and less
aggressive on the growth forecasts than a hedge fund manager. Change the long-term growth rate
from 2% to 1%. Take the average of the PEG of 1x price target, and the DCF implied price per share.

Using the Step 7 tab you have already built, what should be the target price in 2022? Should he start a
long position?
 What We Will Case Studies
Learn in Other on Our Client:
Excel Exercises Shark Virtual Reality

Case Answer Video

Explanation Link
Click HERE for a video explanation of the answers to Case #1
Click HERE for a video explanation of the answers to Case #2
Click HERE for a video explanation of the answers to Case #3

Click HERE for a video explanation of the answers to Case #4

Click HERE for a video explanation of the answers to Case #5

Click HERE for a video explanation of the answers to Case #6

Click HERE for a video explanation of the answers to Case #7

Click HERE for a video explanation of the answers to Case #8

Click HERE for a video explanation of the answers to Case #9

Click HERE for a video explanation of the answers to Case #9

Click HERE for a video explanation of the answers to Case #10