BM2109

Laboratory Exercise
Creating Simple Income Statement Model
using MS Excel
Objectives:

At the end of the exercise, the students should be able to:

 Create a simple income statement model using MS Excel.

Materials:

 MS Excel

Basic Principles:

Simple Income Statement Model

The income statement is one of a company’s core financial statements that shows its profit and loss over a period. The
profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non-operating
activities.

The income statement is divided into periods that logically follow the company’s operations. It requires the least amount
of information from the balance sheet and cash flow statement; thus, it is a great statement to begin a financial model.
The income statement is a predecessor to the other two (2) core statements.

Procedure:

1. Open MS Excel and start a new worksheet.

2. Rename the sheet as 01 Laboratory Exercise 1.
3. Enter the information below following the correct formats.

CELL DATA FORMAT FORMULA

B1 Philippine Peso (P)000 Arial, 10pt, bold
Middle Align, Align left
Row Height: 12.50
Column Height: 12.50
B3 Income Statement Arial, 10pt, bold
Middle Align, Align left
Row Height: 12.50
Column Height: 12.50
B4 Revenues Arial, 10pt, bold
Middle Align, Align left
Row Height: 12.50
Column Height: 12.50
B5 to B12 Cost of Goods Sold (COGS)
Gross Profit
General, Selling, and Administrative Expenses Arial, 10pt, Middle Align,
Earnings Before Interest, Taxes, Depreciation, Align left
and Amortization (EBITDA) Row Height: 12.50
Depreciation Expense Column Height: 12.50
Interest
Earnings Before Taxes (EBT)
Taxes

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CELL DATA FORMAT FORMULA

B13 Net Income Arial, 10pt, bold
Middle Align, Align left
Row Height: 12.50
Column Height: 12.50
I1 2021 Arial, 10pt, Bold
Middle Align, Align
Right
Row Height: 12.50
Column Height: 12.50
For the number format,
go to custom and
encode 0“A”.
Arial, 10pt, Middle Align,
J1 2022 =I1+1
Align Right
Row Height: 12.50
Column Height: 12.50
For the number format,
go to custom and
encode 0 “A”.
K1 to O1 2023 to 2027 Arial, 10pt, Bold
Input =J1+1 on cell K1.
Middle Align, Align
Drag “fill handle” to cell
Right
Row Height: 12.50 O1.
Column Height: 12.50
For the number format,
go to
custom and encode 0
“E”.
I6 to O6 Arial, 10pt, Middle Align,
Input =I4-I5 on cell I6.
Align Right
Row Height: 12.50 Drag “fill handle” to cell
Column Height: 12.50 O6.
I8 to O8 Arial, 10pt, Middle Align,
Align Right Input =I6-I7 on cell I8.
Row Height: 12.50 Then drag “fill handle” to
Column Height: 12.50 cell O8.
I11 to O11 Arial, 10pt, Middle Align,
Align Right Input =I8-SUM(I9:I10) on
Row Height: 12.50 cell I11. Drag “fill handle”
Column Height: 12.50 to cell O11.
I13 to O13 Arial, 10pt, bold
Input =I11-I12 on cell
Middle Align, Align
I13.
Right
Drag “fill handle” to cell
Row Height: 12.50 O13.
Column Height: 12.50
B15 Assumptions Arial, 10pt, bold
Middle Align, Align left
Row Height: 12.50
Column Height: 12.50
B16-B21 Revenue Growth Arial, 10pt
Cost of Goods Sold (COGS) (% of Revenue) General, Middle Align, Align left
Selling, and Administrative Expenses Row Height: 12.50
Depreciation Expense (% of Revenue) Column Height: 12.50
Interest
Tax Rate
J16 Arial, 10pt, Middle Align, =(J4/I4)-1
Align left
Row Height: 12.50
Column Height: 12.50

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CELL DATA FORMAT FORMULA

I17 to J17 Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50
I18 to J18 Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50
I19 to J19
Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50
Input =I5/I4 in cell I17.
Drag “fill handle” to cell
J17.
Input =I7 in cell I18.
Drag “fill handle” to cell
J18.
Input =I9/I4 in cell I19.
Drag “fill handle” to cell
J19.

I20 to J20 Input =I10 in cell I20.

Arial, 10pt, Middle Align,
Drag “fill handle” to cell
Align Right
J20.
Row Height: 12.50
Column Height: 12.50
Input =I12/I11 in cell I21.
Arial, 10pt, Middle Align,
I21 to J21 Drag “fill handle” to cell
Align Right
J21.
Row Height: 12.50
Column Height: 12.50
Input =J16 in cell K16.
Arial, 10pt, Middle Align,
K16 to O16 Drag “fill handle” to cell
Align Right
O16.
Row Height: 12.50
Column Height: 12.50
K17 to O17 36% Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50
K18 to O18 20,000 Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50
K19 to O19 4.5% Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50
K20 to O20 2,000 Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50
K21 to O21 25% Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50
K4 to O4 Input =J4*(1+K16) in cell
Arial, 10pt, Middle Align,
K4. Drag “fill handle” to
Align Right
cell O4.
Row Height: 12.50
Column Height: 12.50
K5 to O5 Input =K4*K17 in cell
Arial, 10pt, Middle Align,
K5. Drag “fill handle” to
Align Right
cell O5.
Row Height: 12.50
Column Height: 12.50

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CELL DATA FORMAT FORMULA

K7 to O7 Input =K18 in cell K7.
Arial, 10pt, Middle Align,
Drag “fill handle” to cell
Align Right
O7.
Row Height: 12.50
Column Height: 12.50
K9 to O9 Input =K4*K19 in cell
Arial, 10pt, Middle Align,
K9. Drag “fill handle” to
Align Right
cell O9.
Row Height: 12.50
Column Height: 12.50
K10 to O10 Arial, 10pt, Middle Align,
Align Right Input =K20 in cell K9.
Row Height: 12.50 Drag “fill handle” to cell
Column Height: 12.50 O10.
K12 to O12 Arial, 10pt, Middle Align,
Align Right Input =K11*K21 in cell
Row Height: 12.50 K12. Drag “fill handle” to
Column Height: 12.50 cell O12.
B23 Cost Analysis Arial, 10pt, bold
Middle Align, Align left
Row Height: 12.50
Column Height: 12.50
B24 to B28 Cost of Goods Sold (COGS) Arial, 10pt, Middle Align,
General, Selling, and Administrative Expenses Align left
Row Height: 12.50
Depreciation Expense Column Height: 12.50
Interest
Taxes
B29 Total Expenses Arial, 10pt, bold
Middle Align, Align left
Row Height: 12.50
Column Height: 12.50
G24 to G28 50 Arial, 10pt, Middle Align,
20 Align Right
10 Row Height: 12.50
10 Column Height: 12.50
10
I24 to O24 Input =I5 in cell I24.
Arial, 10pt, Middle Align,
Drag “fill handle” to cell
Align Right
O24.
Row Height: 12.50
Column Height: 12.50
Input =I7 in cell I25.
I25 to O25 Arial, 10pt, Middle Align, Drag “fill handle” to cell
Align Right O25.

Row Height: 12.50

Column Height: 12.50
Input =I9 in cell I26.
Arial, 10pt, Middle Align,
I26 to O26 Drag “fill handle” to cell
Align Right
O26.
Row Height: 12.50
Column Height: 12.50
I27 to O27 Input I=10 in cell I27.
Arial, 10pt, Middle Align,
Drag “fill handle” to cell
Align Right
O27.
Row Height: 12.50
Column Height: 12.50

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CELL DATA FORMAT FORMULA

Input I=12 in cell I28.
Arial, 10pt, Middle Align,
I28 to O28 Drag “fill handle” to cell
Align Right
O28.
Row Height: 12.50
Column Height: 12.50
G29 to O29 Arial, 10pt, Middle Align,
Align Right Input =SUM(G24:G28) in
Row Height: 12.50 cell G29. Drag “fill
Column Height: 12.50 handle” to cell O27.
B31 to B33 Average Arial, 10pt, Middle Align,
Weighted Average Align left
Median Row Height: 12.50
Column Height: 12.50
I31 to O31 Arial, 10pt, Middle Align, Input
Align Right =AVERAGE(I24:I28) in
Row Height: 12.50 cell I31. Drag “fill handle”
Column Height: 12.50 to cell O31.
I32 to O32 Arial, 10pt, Middle Align, Input
Align Right =SUMPRODUCT(I24:I28
Row Height: 12.50 ,$G$24:$G$28)/$G$29
in cell I32. Drag “fill
Column Height: 12.50
handle” to cell O32.
I33 to O33 Arial, 10pt, Middle Align,
Align Right Input =MEDIAN(I24:I28)
Row Height: 12.50 in cell I33. Drag “fill
Column Height: 12.50 handle” to cell O33.
B35 Total Expenses Arial, 10pt, bold
Middle Align, Align left
Row Height: 12.50
Column Height: 12.50
B36 to B37 If < 200,000 Arial, 10pt, Middle Align,
If >=200,000 Align left
Row Height: 12.50
Column Height: 12.50
G36 to 37 200,000 Arial, 10pt, Middle Align,
200,000 Align left
Row Height: 12.50
Column Height: 12.50
I36 to O36 Input
Arial, 10pt, Middle Align, =IF(I29<$G$36,I29,0) in
Align left cell I36. Drag “fill handle”
to cell O36.
Row Height: 12.50
Column Height: 12.50
I37 to O37 Input
Arial, 10pt, Middle Align, =IF(I29>=$G$37,I29,0) in
Align left cell I37. Drag “fill handle”
to cell O37.
Row Height: 12.50
Column Height: 12.50
I38 to O38 Arial, 10pt, Middle Align, Input =SUM(I36:I37) in
Align left cell I38. Drag “fill handle”
Row Height: 12.50 to O38.
Column Height: 12.50
B40 Error Check Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50

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CELL DATA FORMAT FORMULA

G40 OK Arial, 10pt, Middle Align,
Align Right
Row Height: 12.50
Column Height: 12.50
I40 to O40 Arial, 10pt, Middle Align, Input =IF(I29=I38,
Align Right "OK","") in cell I40.
Row Height: 12.50 Drag ““fill handle”” to
Column Height: 12.50 O40.

4. Use conditional formatting for the formulas in cells I40 to O40. Highlight cells I40 to O40. Go to Conditional
Formatting tab, then choose New Rule. Afterward, choose “Format only cells that contain” then set the condition
to “equal to.” Then choose G40 as your value.

5. See 01 Laboratory Exercise 1.xlsx for the structure of the output.

6. Save the Excel file as “Surname_FMDExer1” and place it on the network drive.

Rubric for grading the output:

CRITERIA PERFORMANCE INDICATORS POINTS
Neatness and The spreadsheet has exceptional formatting, and the information is well-
20
Organization organized.
The spreadsheet formulas are well-developed and will correctly determine the needed
Formulas 30
information.
Titles, Labels, and
The spreadsheet contains clearly labeled rows and columns. 10
Headings
Content The spreadsheet provides clear forecast and analysis of expenses and revenues. 40
TOTAL 100

01 Laboratory Exercise *Property of

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