634185658.

xlsx
Info

###
r
Concepts
◦ Integration of IS and BS and Cash Flow Statements
◦ Use of back up calculations
◦ Basics of building a forecast

© 2016 Page 1 of 14
 634185658.xlsx
Simple 1

Modeling Hist. Hist. Proj. Proj. Proj.

Exercise 1

Assumptions
Revenue growth 10.0% 5.0% 4.0% 3.0%
Costs % revenues 64.0% 64.0% 60.0% 60.0% 60.0%
Accounts receivable/Sales 8.9% 10.1% 10.0% 10.0% 10.0%
Investments ($ amount) 75.0 90.0 90.0 90.0 90.0
Accounts payable % costs 10.4% 11.4% 11.5% 11.5% 11.5%
Long term debt increase (decrease) 0.0 (10.0) (10.0) 5.0

Income statement
Revenues 225.0 247.5
Costs 144.0 158.4
Net income

Balance sheet
Cash 15.0 18.0
Accounts receivable 20.0 25.0
Financial Investments 75.0 90.0
Total assets 110.0 133.0

Accounts payable 15.0 18.0

Long term debt 30.0 30.0
Total liabilities 45.0 48.0

Equity 65.0 85.0

Total liabilities and equity 110.0 133.0

© 2016 Page 2 of 14
 634185658.xlsx
Simple 1

Check 1.0 1.0 1.0 1.0 1.0

Cash flow statement

Net income
(Increae)/decrease in accounts receivables
Increase (decrease) in accounts payable
Cash flow from operations

(Increase) decrease in investments

Cash flow from investing activities

Inc (dec) in long term debt

Cash flow from financing activities

Beginning cash
Net cash flow
Ending cash

Exercise 2

Hist. Hist. Proj. Proj. Proj.

Assumptions
Revenue growth 27.0% 10.0% 7.0% 7.0%
Costs % revenues 55.0% 55.4% 55.0% 55.0% 55.0%
Accounts receivable/Sales 8.9% 8.8% 9.0% 9.0% 9.0%
Investments ($ amount) 157.5 189.0 100.0 100.0 100.0
Accounts payable % costs 12.1% 11.4% 11.5% 11.5% 11.5%
Long term debt increase (decrease) 0.0 (25.0) (25.0) 10.0
2.1

© 2016 Page 3 of 14
 634185658.xlsx
Simple 1

Income statement
Revenues 472.5 600.0
Costs 259.9 332.6
Net income

Balance sheet
Cash 31.5 37.8
Accounts receivable 42.0 52.5
Financial Investments 157.5 189.0
Total assets

Accounts payable 31.5 37.8

Long term debt 63.0 63.0
Total liabilities

Equity 136.5 178.5

Total liabilities and equity

Check 1.0 1.0 1.0 1.0 1.0

Cash flow statement

Net income
(Increae)/decrease in accounts receivables
Increase (decrease) in accounts payable
Cash flow from operations

(Increase) decrease in investments

Cash flow from investing activities

Inc (dec) in long term debt

Cash flow from financing activities

© 2016 Page 4 of 14
 634185658.xlsx
Simple 1

Beginning cash
Net cash flow
Ending cash

© 2016 Page 5 of 14
 634185658.xlsx
Simple 2

Modeling Hist. Hist. Proj. Proj. Proj. Proj.

Exercise 1 (Assuming no interest expense)

Assumptions
Revenue growth % 10.0% 8.0% 5.0% 6.0% 3.0%
COGS % revenues 50.0% 50.0% 50.0% 50.0% 50.0% 50.0%
SG&A costs % revenues 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%
Tax expense % EBT 28.3% 28.4% 28.4% 28.4% 28.4% 28.4%
Accounts receivable % revenues 8.0% 8.2% 8.2% 8.2% 8.2% 8.2%
Inventories % COGS 8.0% 8.0% 8.0% 8.0% 8.0% 8.0%
Capex % revenues 4.0% 0.0% 6.0% 6.0% 6.0% 6.0%
Depreciation % beginning net PP&E 13.3% 13.0% 13.0% 13.0% 13.0%
Accounts payable % COGS 6.0% 6.1% 6.0% 6.0% 6.0% 6.0%
Other current liabilities as a % of revenues 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Increase (decrease) in long term debt 0.0 10.0 (10.0) (5.0) 10.0
Issuance of equity 0.0 10.0 0.0 0.0
Dividends % net income 39.5% 36.1% 40.0% 40.0% 40.0% 40.0%
Shares outstanding 15.0 15.0 15.0 15.0

Calculations
Net PP&E
Beginning 67.5 69.4 71.6 74.2
Capital expenditure 6.0 10.7 11.2 11.9 12.3
(Depreciation) (8.8) (9.0) (9.3) (9.6)
Ending 67.5 69.4 71.6 74.2 76.8

Equity
Beginning 94.1 121.0 159.2 189.3
Net income 44.8 47.1 50.1 51.6
(Dividends) (15.0) (15.0) (17.9) (18.9) (20.1) (20.6)

© 2016 Page 6 of 14
 634185658.xlsx
Simple 2

Issuance (repurchases) 0.0 0.0 10.0 0.0 0.0

Ending 121.0 159.2 189.3 220.3

Operating Working Capital

Accounts receivable 12.0 13.5 14.6 15.3 16.3 16.8
Inventories 6.0 6.6 7.1 7.5 7.9 8.2
Accounts payable 4.5 5.0 5.3 5.6 6.0 6.1
Other current liabilities 6.0 9.0 7.1 7.5 7.9 8.2
Operating working capital 7.5 6.1 9.3 9.7 10.3 10.6

Income statement
Revenues 150.0 165.0 178.2 187.1 198.3 204.3
COGS (75.0) (82.5) (89.1) (93.6) (99.2) (102.1)
Depreciation (7.0) (8.0) (8.8) (9.0) (9.3) (9.6)
Gross profit 68.0 74.5 80.3 84.5 89.9 92.5

SG&A costs (15.0) (16.5) (17.8) (18.7) (19.8) (20.4)

Earnings Before Tax 53.0 58.0 62.5 65.8 70.0 72.1

Tax expense (15.0) (16.5) (17.8) (18.7) (19.9) (20.5)

Net income 38.0 41.5 44.8 47.1 50.1 51.6

Shares outstanding 15.0 15.0 15.0 15.0 15.0 15.0

Earnings per share 2.5 2.8 3.0 3.1 3.3 3.4

Balance sheet
Cash 15.0 50.5 82.3 107.9 129.8 167.8
Accounts receivable 12.0 13.5 14.6 15.3 16.3 16.8
Inventories 6.0 6.6 7.1 7.5 7.9 8.2
Current assets 33.0 70.6 104.0 130.7 154.0 192.8

Net PP&E 60.0 67.5 69.4 71.6 74.2 76.8

© 2016 Page 7 of 14
 634185658.xlsx
Simple 2

Total assets 93.0 138.1 173.4 202.3 228.2 269.6

Accounts payable 4.5 5.0 5.3 5.6 6.0 6.1

Other current liabilities 6.0 9.0 7.1 7.5 7.9 8.2
Current liabilities 10.5 14.0 12.5 13.1 13.9 14.3

Long term debt 30.0 30.0 40.0 30.0 25.0 35.0

Total liabilities 40.5 44.0 52.5 43.1 38.9 49.3

Equity 52.5 94.1 121.0 159.2 189.3 220.3

Total liabilities and equity 93.0 138.1 173.4 202.3 228.2 269.6

Check 0.0 0.0 0.0 0.0 0.0 0.0

Cash flow statement

Net income 44.8 47.1 50.1 51.6
+ Depreciation 8.8 9.0 9.3 9.6
(Increase) decrease in operating working capital (3.2) (0.5) (0.6) (0.3)
Cash flow from operations 50.4 55.7 58.9 60.9

(Capital expenditure) (10.7) (11.2) (11.9) (12.3)

Cash flow from investing activities (10.7) (11.2) (11.9) (12.3)

Increase (decrease) in long term debt 10.0 (10.0) (5.0) 10.0

(Dividends) (17.9) (18.9) (20.1) (20.6)
Issuance of equity 0.0 10.0 0.0 0.0
Cash flow from financing activities (7.9) (18.9) (25.1) (10.6)

Beginning cash 50.5 82.3 107.9 129.8

Net cash flow 31.8 25.6 21.9 38.0
Ending cash 82.3 107.9 129.8 167.8

© 2016 Page 8 of 14
 634185658.xlsx
Simple 2

End

Exercise 2 (Assuming no interest expense)

Assumptions
Revenue growth % 10.0% 15.0% 5.0% 4.0% 1.0%
COGS % revenues 64.0% 64.0% 64.0% 64.0% 64.0% 64.0%
SG&A costs % revenues 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%
Tax expense % EBT 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%
Accounts receivable % revenues 29.6% 30.3% 30.0% 30.0% 30.0% 30.0%
Inventories % COGS 23.1% 23.1% 23.0% 8.0% 8.0% 8.0%
Capex % revenues 4.0% 4.6% 4.5% 4.5% 4.5% 4.5%
Depreciation % beginning net PP&E 11.9% 12.0% 12.0% 12.0% 12.0%
Accounts payable % COGS 19.4% 19.6% 19.6% 19.6% 19.6% 19.6%
Other current liabilities as a % of revenues 16.6% 22.6% 15.0% 15.0% 15.0% 15.0%
Increase (decrease) in long term debt 0.0 20.0 (5.0) (10.0) (15.0)
Issuance of equity 0.0 10.0 0.0 0.0
Dividends % net income 24.7% 22.7% 23.0% 23.0% 23.0% 23.0%
Shares outstanding 49.5 49.5 49.5 49.5

Calculations
Net PP&E
Beginning
Capital expenditure 20.0 25.0 249.8
(Depreciation)
Ending 249.8

Equity
Beginning
Net income
(Dividends) (15.0) (15.0)
Issuance (repurchases) 0.0
Ending

© 2016 Page 9 of 14
 634185658.xlsx
Simple 2

Operating Working Capital

Accounts receivable
Inventories
Accounts payable
Other current liabilities
Operating working capital

Income statement
Revenues 495.0 544.5 626.2
COGS (316.8) (348.5) (400.8)
Depreciation (23.1) (26.4)
Gross profit 155.1 169.6

SG&A costs (74.3) (81.7)

Earnings Before Tax 80.9 87.9

Tax expense (20.2) (22.0)

Net income 60.6 66.0

Shares outstanding 49.5 49.5

Earnings per share 1.2 1.3

Balance sheet
Cash 183.2 314.6
Accounts receivable 146.5 164.8
Inventories 73.3 80.6
Current assets 402.9 560.0

Net PP&E 222.0 249.8

Total assets 624.9 809.8

© 2016 Page 10 of 14
 634185658.xlsx
Simple 2

Accounts payable 61.6 68.5

Other current liabilities 82.1 123.2
Current liabilities 143.7 191.7

Long term debt 111.0 111.0

Total liabilities 254.7 302.7

Equity 370.2 507.1

Total liabilities and equity 624.9 809.8

Check 0.0 0.0

Cash flow statement

Net income
+ Depreciation
(Increase) decrease in operating working capital
Cash flow from operations

(Capital expenditure)
Cash flow from investing activities

Increase (decrease) in long term debt

(Dividends)
Issuance of equity
Cash flow from financing activities

Beginning cash
Net cash flow
Ending cash

End

© 2016 Page 11 of 14
 634185658.xlsx
Simple 2

1 Command+, Excel Preferences

Edit Remove Selection Remove Edit in Cells

Calculation Turn off Iterative Calculation
Error Check Turn off background check

© 2016 Page 12 of 14
 634185658.xlsx
Simple 2

1.5

© 2016 Page 13 of 14
 634185658.xlsx
Simple 2

3.7

© 2016 Page 14 of 14