3 Statement Model Strictly Confidential

Table of Contents
3 Statement Model

Notes
This Excel model is for educational purposes only and should not be used for any other reason.
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© 2019 CFI Education Inc.

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© Corporate Finance Institute®. All rights reserved. Historical Results Forecast Period
FINANCIAL STATEMENTS 2012 2013 2014 2015 2016 2017 2018 2019 2020
Balance Sheet Check OK OK OK OK OK OK OK OK OK

Assumptions

Income Statement
© Corporate Finance Institute®. All rights reserved. Historical Results Forecast Period
FINANCIAL STATEMENTS 2012 2013 2014 2015 2016 2017 2018 2019 2020
Balance Sheet Check OK OK OK OK OK OK OK OK OK

Balance Sheet
© Corporate Finance Institute®. All rights reserved. Historical Results Forecast Period
FINANCIAL STATEMENTS 2012 2013 2014 2015 2016 2017 2018 2019 2020
Balance Sheet Check OK OK OK OK OK OK OK OK OK

Cash Flow Statement

© Corporate Finance Institute®. All rights reserved. Historical Results Forecast Period
FINANCIAL STATEMENTS 2012 2013 2014 2015 2016 2017 2018 2019 2020
Balance Sheet Check OK OK OK OK OK OK OK OK OK

Supporting Schedules
Working Capital Schedule
Accounts Receivable 5,100 5,904 6,567 7,117 7,539 7,807 8,158 8,485 8,782
Inventory 7,805 9,601 9,825 10,531 11,342 11,715 12,242 12,388 12,821
Accounts Payable 3,902 4,800 4,912 5,265 5,671 5,938 6,205 6,279 6,498
Net Working Capital (NWC) 9,003 10,705 11,480 12,382 13,210 13,584 14,196 14,594 15,105
Change in NWC 9,003 1,702 775 903 827 375 611 398 511

Depreciation Schedule
PPE Opening 50,000 45,500 42,350 40,145 38,602 37,521 37,513 32,508 44,505
Plus Capex 15,000 15,000 15,000 15,000 15,000 15,000 10,000 25,000 10,000
Less Depreciation 19,500 18,150 17,205 16,544 16,080 15,008 15,005 13,003 17,802
PPE Closing 45,500 42,350 40,145 38,602 37,521 37,513 32,508 44,505 36,703

Debt & Interest Schedule

Debt Opening 50,000 50,000 50,000 30,000 30,000 30,000 30,000 30,000 10,000
Issuance (repayment) - - (20,000) - - - - (20,000) -
Debt Closing 50,000 50,000 30,000 30,000 30,000 30,000 30,000 10,000 10,000
Interest Expense 2,500 2,500 1,500 900 900 900 900 900 300
2021
OK
2021
OK
2021
OK
2021
OK

9,045
12,839
6,507
15,377
272

36,703
15,000
14,681
37,022

10,000
-
10,000
300
© Corporate Finance Institute®. All rights reserved.

DCF Model

Assumptions
Tax Rate 25% Cash Flow
Discount Rate 12% $50,000 $4
$43,510
Perpetural Growth Rate 3% $45,000 $41,501
$40,000 $37,715
EV/EBITDA Mulltiple 7.0x $35,000
Transaction Date 12/31/2017 $30,000
Fiscal Year End 6/30/2018 $25,000
$20,000 $17,747
Current Price 25.00
$15,000
Shares Outstanding 20,000 $10,000
Debt 30,000 $5,000
$0
Cash 239,550 2018 2019 2020 2021 2
Capex 15,000

Discounted Cash Flow Entry 2018 2019 2020 2021

Date 12/31/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021
Time Periods 0 1 2 3
Year Fraction 0.50 1.00 1.00 1.00
EBIT 47,814 51,095 55,861 58,693
Less: Cash Taxes 11,954 12,774 13,965 14,673
Plus: D&A 15,008 15,005 15,003 15,002
Less: Capex 15,000 15,000 15,000 15,000
Less: Changes in NWC 375 611 398 511
Unlevered FCF 35,494 37,715 41,501 43,510
(Entry)/Exit (290,450)
Transaction CF - 17,747 37,715 41,501 43,510
Transaction CF (290,450) 17,747 37,715 41,501 43,510

Intrinsic Value Market Value

Enterprise Value 462,983 Market Cap
Plus: Cash 239,550 Plus: Debt
Less: Debt 30,000 Less: Cash
Equity Value 672,532 Enterprise Value

Equity Value/Share 33.63 Equity Value/Share

Instructions
Step 1: Get EBIT and D&A from the income statement
Step 2: Calculate the net working capital
There are two ways to find NWC:
1. NWC = Current Assets (less cash) - Current Liabilities (less debt)
2. NWC = Accounts Receivable + Inventory - Accounts Payable
 This chart isn't available in your version of Excel.
sh Flow
$47,008 Editing this shape or saving this workbook into a
$41,501
$43,510 different file format will permanently break the chart.

2020 2021 2022

2022 Exit Terminal Value

6/30/2022 6/30/2022 Perpetural Growth 537,981
4 EV/EBITDA 546,278
1.00 Average 542,129
63,039
15,760
15,001
15,000
272
47,008
542,129
47,008 542,129
47,008 542,129

Rate of Return
500,000 Target Price Upside 35%
30,000 Internal Rate of Return (IRR) 26%
239,550
290,450 Market Value vs Intrinsic Value
Market Value 25.00
25.00 Upside 8.63
Intrinsic Value 33.63
This file is for educational purposes only. E&OE

Corporate Finance Institute®

https://corporatefinanceinstitute.com/