Company XYZ

Income statement 2014 2015 2016 2017E

Sales 2,409 2,563 3,268 3,741
Cost of Goods Sold -1,862 -1,965 -2,437 -2,786
Gross Profit (clean) 548 598 831 956
Lease Payments 0 0 0 0
R&D -11 -7 -7 -8
SG&A -260 -249 -397 -451
Other Operating Income (Expense) 7 27 28 26
EBITDA (clean) 283 369 456 523
Depreciation -45 -46 -68 -80
EBITA (clean) 238 322 387 442
Goodwill Amortisation 0 0 0 0
Other Amortisation 0 0 0 0
EBIT (clean) 238 322 387 442

Interest Received 79 113 113 145

Interest Paid -67 -144 -197 -223
Net Interest 12 -31 -84 -79
Income from Investments 0 0 0 0
Other Financial Income (Expenses) -30 -24 -60 -19
Gains from Disposals (only if recurrent) 0 0 0 0
Net Financial Items -18 -55 -144 -98

Pre-Tax Profit 219 267 244 344

Tax -24 -30 -42 -59
Tax Rate % 11% 11% 17% 17%

Profit after tax 196 236 202 286

Minorities -19 -20 -10 -23

Group Share of Net Earnings 176 217 192 263

1. Match the balance sheet for 2017E by filling in the missing items.

Net debt (USD mn)

2. Calulate net debt for the company XYZ.
- Find the correlation between net interest 2014 2015 2016 2017
and net debt.
- Plot the graph showing net interest and net
debt over time. Indicate the R-square
between the two series
Correlation >>

3. Analyst has missed entering a bond issuance of USD 600mn (5% coupon bond) in 2017
financial statements. Describe the major changes to the respective statements (Income
statement, Balance Sheet, Cash flow statement) in 2017.
Cash flow 2014 2015 2016 2017E Balance sheet
Cash Flow from Operations Cash and Cash Equivalents
Net Income 176 217 192 Accounts Receivable
Minority Interest add-back 19 20 10 Inventory
Depreciation and Amortisation 45 46 68 Interest-bearing assets
Other Operating Cash Flow Items 8 52 160 64 Other
Cash Flow from Operations 249 335 430 Other Receivables
Total Current Assets
Working Capital Cash Flow -42 -101 30
Net PP&E
Cash Flow from Investments Net Intangible Assets
Capital Expenditures -80 -140 -215 -145 Equity Method Investments
Acquisitions -167 0 0 0 Investment in Securities
Disposals 31 2 3 0 Other Long-Term Assets
Other Investing Cash Flow 61 -7 -18 0 Total Fixed Assets
Cash Flow from Investments -154 -145 -229 -145
Total Assets
Cash Flow from Financing
Dividends -116 -83 -96 -53 Accounts Payable
Equity Issue (Repurchase) 0 0 0 0 Short-Term Debt
Other Financing Cash Flow 0 47 40 -64 Other Current Liabilities
Borrowing 127 -105 -352 0 Total Current Liabilities
Cash Flow from Financing 11 -140 -407 -117
Long-Term Debt
Total cash flow 64 -52 -176 -262 Other Long-Term Liabilities
Non-Current Liabilities
Working Capital Cash Flow
Inventory 177 195 302 345 Total Common Equity
Accounts Receivable 503 540 644 737 Minority Interest
Other Receivables 155 180 164 187 Total Shareholders' Equity
Accounts Payable 426 395 532 609
Other Payables 45 55 142 163 Total Liabilities and Equity
Net Working Capital 364 465 435 498 Check
Change in Working Capital -101 30 -63

<< show formulas >> Plot chart here

2014 2015 2016 2017E
862 1,099 1,808
503 540 644
177 195 302
1 1 1 1
155 180 164
156 181 164 1
1,698 2,016 2,918 1

483 575 872 937

1 1 1 1
0 0 0 0
441 638 774 774
34 42 39 39
959 1,256 1,687 1,751

2,657 3,272 4,605 1,752

426 395 532

76 94 1,967 1,967
45 55 142
548 545 2,641 1,967

1,036 1,308 321 321

48 53 98 98
1,084 1,361 419 419

948 1,082 1,179

77 284 367 390
1,025 1,366 1,545 390

2,657 3,272 4,605 2,775

0 0 0 -1,023