1 K M N 0 Q R Notes Revenues is driven by the growth rate Gross Protits is calculated as Ravenues multiplied by Gross Margin 1700 Opex is calculated as Revenues multiplied by OpEx Percent Revenues . EBIT is calculated as Gross Profils minus Operating Expenses (OpEx) Interest Income is calculated as Interest Hate multiplied by Cash (as there is no Debt) Pretax Income is calculated as EBIT plus Net Interest Income (Expenses Taxes is calculated as Pretak Profits multiplied by Tax Rate A B D H 53 The exercise is designed such that an error carly in the assignment will not adversely Impact later grading. 54 55 2019 2020 2001F Relationship 56 Income Statement 57 Revenues 10,000 11,000 Business 5B Growth Rate 106 105 Driver 59 Cost of Revenues G.000 G, 710 Accounting 60 Grass Profits Business 61 Gross Margin 03 Driver 62 Operating Expenses (Ope:] 1.500 Business 63 OpCX Percent of Revenues 0% Driver 64 EBIT Accounting 65 Net Interest Income (Expense) 50 50 Business 66 Interest Hate 5 020 3% 5 Driver 67 Pretax Income Accounting 68 Taxes Business 69 Tax Rata 0% Driver 70 Net Income 71 72 Balance Sheet 73 Cash 1.000 Accounting 74 Accounts Receivable 1.300 1,600 75 Days of Sales Outstanding (DSO) 76 PPRF 15.000 Accounting 77 Accounts Payable 1.000 1,200 Business 78 Days of Payables Outstanding (DPOI Driver 79 Equity 12.500 80 81 Hints for Working on the Cash Flow Statement 82 Cash Flow Statements always aggregate (sum up) all the inflows and Outflows of Cash Flow during a period. 83 Intlows of Cash ane positive numbers and Outflows at Cash are negative numbers on the Cash Flow Statement. 84 To help you, we show the Outflows intoks. 85 You should remember that increases in Assets, actually decrease Cash so you are subtracting an increase 86 In contrast, increases in Liabilitics, Debt and Equity increase Cosho you are adding an increase. 87 Capital Expenditures (Copa) are investments of Cash and an Outflow of Cash on the Cash Flow Statement BB As an Investment, CapEx isn't loss than zero, but it is shown as a negative number because it is an Outflow. 89 Dividends are an Outflow of Cast and also shown as a negative number, but Dividends are never less than cero 90 91 Cash Flow Statement 92 Accounting 93 +Depreciation 1.500 Accounting 94 Increase in Accounts Receivable 95 + Increase in Accounts Payable Accounting 96 - Capital Expenditures (Cap) 1800) (1,000) Accounting 97 - Dividends Accounting 98 Payout Ratio Business 99 - Increase Decrease in Cash 700 Accounting 100 Cash is previous year Cash plus Incrosso (Decrcase) in Cash Accounts Receivable is calculated as Revenues multiplied by Days of Sales Outstanding IDSO/365 Days of Sales Outstanding (OSO) is calculated as Accounts Receivable / Revenues 365 PP&E in a year is calculated as PPME in the previous year plus Capex in the current year minus Depreciation in the current year. Accounts Payable is calculated as Cost of Revenues multiplied by Days of Payables Outstandine (DPO)/365 Days of Payables Outstanding (DPO) is calculated as Accounts Payable/Cost of Revenues 365 Equity in a year is calculated as Equity in the previous year plus Net Income minus Dividends ALERT: Because the value of the Dividends are shown as a negative on the Cash Flow Statement the value should be added to subtract Dividends Net Income The company uses 10 year straight line depreciation (10% of PP&E in the previous year Minus the increase in Accounts Receivable (the Accounts Receivable in the current year minus that in the previous year) Increase in Accounts Payable (the Accounts Payable in the current year minus that in the previous year 11.000 Dividends is the negative of the Net Income multiplied by Payout Ratio 1 K M N 0 Q R Notes Revenues is driven by the growth rate Gross Protits is calculated as Ravenues multiplied by Gross Margin 1700 Opex is calculated as Revenues multiplied by OpEx Percent Revenues . EBIT is calculated as Gross Profils minus Operating Expenses (OpEx) Interest Income is calculated as Interest Hate multiplied by Cash (as there is no Debt) Pretax Income is calculated as EBIT plus Net Interest Income (Expenses Taxes is calculated as Pretak Profits multiplied by Tax Rate A B D H 53 The exercise is designed such that an error carly in the assignment will not adversely Impact later grading. 54 55 2019 2020 2001F Relationship 56 Income Statement 57 Revenues 10,000 11,000 Business 5B Growth Rate 106 105 Driver 59 Cost of Revenues G.000 G, 710 Accounting 60 Grass Profits Business 61 Gross Margin 03 Driver 62 Operating Expenses (Ope:] 1.500 Business 63 OpCX Percent of Revenues 0% Driver 64 EBIT Accounting 65 Net Interest Income (Expense) 50 50 Business 66 Interest Hate 5 020 3% 5 Driver 67 Pretax Income Accounting 68 Taxes Business 69 Tax Rata 0% Driver 70 Net Income 71 72 Balance Sheet 73 Cash 1.000 Accounting 74 Accounts Receivable 1.300 1,600 75 Days of Sales Outstanding (DSO) 76 PPRF 15.000 Accounting 77 Accounts Payable 1.000 1,200 Business 78 Days of Payables Outstanding (DPOI Driver 79 Equity 12.500 80 81 Hints for Working on the Cash Flow Statement 82 Cash Flow Statements always aggregate (sum up) all the inflows and Outflows of Cash Flow during a period. 83 Intlows of Cash ane positive numbers and Outflows at Cash are negative numbers on the Cash Flow Statement. 84 To help you, we show the Outflows intoks. 85 You should remember that increases in Assets, actually decrease Cash so you are subtracting an increase 86 In contrast, increases in Liabilitics, Debt and Equity increase Cosho you are adding an increase. 87 Capital Expenditures (Copa) are investments of Cash and an Outflow of Cash on the Cash Flow Statement BB As an Investment, CapEx isn't loss than zero, but it is shown as a negative number because it is an Outflow. 89 Dividends are an Outflow of Cast and also shown as a negative number, but Dividends are never less than cero 90 91 Cash Flow Statement 92 Accounting 93 +Depreciation 1.500 Accounting 94 Increase in Accounts Receivable 95 + Increase in Accounts Payable Accounting 96 - Capital Expenditures (Cap) 1800) (1,000) Accounting 97 - Dividends Accounting 98 Payout Ratio Business 99 - Increase Decrease in Cash 700 Accounting 100 Cash is previous year Cash plus Incrosso (Decrcase) in Cash Accounts Receivable is calculated as Revenues multiplied by Days of Sales Outstanding IDSO/365 Days of Sales Outstanding (OSO) is calculated as Accounts Receivable / Revenues 365 PP&E in a year is calculated as PPME in the previous year plus Capex in the current year minus Depreciation in the current year. Accounts Payable is calculated as Cost of Revenues multiplied by Days of Payables Outstandine (DPO)/365 Days of Payables Outstanding (DPO) is calculated as Accounts Payable/Cost of Revenues 365 Equity in a year is calculated as Equity in the previous year plus Net Income minus Dividends ALERT: Because the value of the Dividends are shown as a negative on the Cash Flow Statement the value should be added to subtract Dividends Net Income The company uses 10 year straight line depreciation (10% of PP&E in the previous year Minus the increase in Accounts Receivable (the Accounts Receivable in the current year minus that in the previous year) Increase in Accounts Payable (the Accounts Payable in the current year minus that in the previous year 11.000 Dividends is the negative of the Net Income multiplied by Payout Ratio