Financial Modeling In Excel

Open Source Financial Model

Neev Knowledge Management - Pristine www.edupristine.com info@edupristine.com

Pristine is India's largest authorized training provider for CFA , FRM , PRM and Financial Modeling. It has conducted more tha 500,000+ man-hours of finance trainings for individuals and corporates in all the major Indian cities and outside India.

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owledge Management - Pristine

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Income Statement

FY 2009 Assumptions Starting Revenue Revenue Growth COGS as %age of Sales Wages Depreciation Salvage Value Useful Life Interest Expense as %age of Debt Taxe Rate Common Divedend 80,000 15% 40% 5% SLM 10Years 4% 35% 8,500

FY 2010

FY 2011

8,500

8,500

Revenue Expenses/Income COGS wages EBITDA Depreciation EBIT Interest Income from Continuing Operation Gain from sale of Land EBT Provision for Taxes Net Income Commom Dividend

80,000 32,000 4,000 44,000 6,000 38,000 400 37,600 37,600 13,160 24,440 8,500

92,000 36,800 4,600 50,600 6,000 44,600 400 44,200 44,200 15,470 28,730 8,500

105,800 42,320 5,290 58,190 8,500 49,690 600 49,090 10,000 59,090 20,682 38,409 8,500

Debt & Interest Schedule

Debt Schedule Bonds Add: New Issuance Total Bond Issuance 10,000 10,000 10,000 10,000 10,000 5,000 15,000

Interest Schedule Interest Payment (Old Bonds) Interest Payment (New Bonds) Total Interest Payment

400 400

400 400

400 200 600

Asset & Depreciation Schedule

Asset Schedule Gross Plant & Equipment Add: New Total Gross Plant & Equipment

60,000 60,000

60,000 60,000

60,000 25,000 85,000

Depreciation Schedule Gross Plant & Equipment New P&E Total Depreciation Accumulated Depreciation

6,000 6,000 6,000

6,000 6,000 12,000

6,000 2,500 8,500 20,500

Balance Sheet

FY 2009 Assets Current Assets Cash Account Receivable Inventory Total Current Assets Noncurrent Assets Land Gross Plant & Equipment Less: Acc. Depreciation Net Plent & Equipment Goodwill Total Noncurrent Assets Total Assets Liabilities Current Liabilities Account Payable Wages Payable Interest Payable Taxes Payable Dividends Payable Total Current Liabilities Noncurrent Liabilities Bonds Deferred Tax Liability Total Noncurrent Liabilities Total Liabilities Shareholders Equity Common Stock Retained Rearnings Total Equity Total Liabilities & Shareholders Equity * 2008 Retained Earning= 10000 TRUE Retained Earning Opening Balance Add: Net Income Less: Commom Dividend Closing Balance

FY 2010

FY 2011

2,540 8,000 5,000 15,540

28,170 9,000 7,000 44,170

54,579 10,000 5,000 69,579

40,000 60,000 (6,000) 54,000 10,000 104,000 119,540

40,000 60,000 (12,000) 48,000 10,000 98,000 142,170

35,000 85,000 (20,500) 64,500 10,000 109,500 179,078.5000

2,000 8,000 2,600 4,000 2,000 18,600

5,000 8,000 3,000 4,000 1,000 21,000

9,000 4,500 3,500 5,000 6,000 28,000

10,000 15,000 25,000 43,600

10,000 15,000 25,000 46,000

15,000 20,000 35,000 63,000

50,000 25,940 75,940 119,540

50,000 46,170 96,170 142,170

40,000 76,079 116,079 179,079

TRUE

TRUE

10,000

10,000 24,440 (8,500) 25,940

25,940 28,730 (8,500) 46,170

46,170 38,409 (8,500) 76,079

Indirect Method Cash Flow Statement FY 2009 Cash Flow from Operation(CFO) Net Income Gain from sale of Land Depreciation Changes In Working Capital Account Receivable Inventory Account Payable Wages Payable Interest Payable Taxes Payable Deferred Tax Liability CFO Cash Flow from Investments(CFI) Cash from Sale of Land Purchase of Plant & Equipment CFI Cash Flow from Finance(CFF) Sale of Bonds Stock Repurchase Cash Dividend CFF Net Cash Flow Cash Balance Opening Balance Net Change in Cash Flow Closing Balance 15,000 (25,000) (10,000) 28,730 6,000 (1,000) (2,000) 3,000 400 35,130 38,409 (10,000) 8,500 (1,000) 2,000 4,000 (3,500) 500 1,000 5,000 44,909 FY 2010 FY 2011

(9,500) (9,500) 25,630

5,000 (10,000) (3,500) (8,500) 26,409

2,540

2,540 25,630 28,170

28,170 26,409 54,579

Conversion of Cash Flow Indirect-to-Direct Method FY 2009 Cash Flow from Operation(CFO) Cash collection Cash paid to suppliers Cash Wages Cash Interest Paid Cash Taxes Paid CFO FY 2010 91,000 (35,800) (4,600) (15,470) 35,130 FY 2011 104,800 (36,320) (8,790) (100) (14,682) 44,909

Procedure Cash flow from Investing & Financing Activity are same

esting & Financing Activity are same as in the Indirect Method

Ratio Analysis

FY 2009 Liquidity Ratio Current Ratio Quick Ratio Activity Ratio No. of days in a year Recievable Turnover Days of sales Outstanding Inventory Turnover Days in Inventory Total Asset Turnover Working Capital Working Capital Turnover Profitability Ratio Gross Profit Margin EBITDA Margin EBIT Margin Net Profit Margin Return on Total Capital Return on Equity Solvency Ratio Debt-to-Equity Ratio Interest Coverage Ratio 0.8 0.6

FY 2010 2.1 1.8

FY 2011 2.5 2.3

365 10 37 6 57 0.7 (3,060) (26) 11 34 6 60 0.6 23,170 9 11 33 7 52 0.6 41,579 3

0.60 0.55 0.48 0.31 0.44 0.32

0.60 0.55 0.48 0.31 0.42 0.30

0.60 0.55 0.47 0.36 0.38 0.33

0.13 95

0.10 112

0.13 83

DuPont Analysis - The Three Part Approach

FY 2009 Net Profit Margin Asset Turnover Ratio Financial Leverage Return On Equity (ROE)

FY 2010

FY 2011

DuPont Analysis - The Five Part Approach

FY 2009 Tax Burden Interest Burden EBIT Margin Asset Turnover Ratio Financial Leverage Return On Equity (ROE)

FY 2010

FY 2011