. J K L L M N 0 Q R B C D E F G H Errors in the model will turn red. The exercise is designed such that an error early in the assignment will not adversely impact later gracing 2018 2019 2020 Relationship Notes 10.755 11.842 Revenues is driven by the growth rate 13,026 10% 106 2,223 6,459 Gross Pratits is calculated as Revenues multiplied by Grass Margin Income Statement Revenues Growth Rate Cost of Revenues Grass Profits Gross Margin Operating Expenses (Opex OpFx Percent of Revenues EBIT Net interest Income (Expense) Interest Rate Pretax income Tans Business Driver Accounting Business Driver Business Driver Accounting NA 1500 1700 OpEx is calculated as Revenues multiplied by OpEx Percent Revenues a% EBIT is calculated as Gross Profits minus Operating Expenses (Opbx Interest Income is calculated as interest Rate multiplied by Cash as there is no Debt) 58 68 5% 5% 5% Driver Accounting Business Pretax income is calculated as EBIT plus Net Interest Income (Expenses) Tames is calculated as Pretax Profits multiplied by Tax Rate 0% Driver Tax Rate Net Income Balance Sheet Cash 1,365 1.500 Accounting 1,600 Accounts Receivable Days of Sales Outstanding (DSOI PPE Accounts Payable Days of Payables Outstanding (DPO) Equity 15,079 1,000 Accounting Business Cash is previous year Cash plus Increase (Decrease) in Cash Accounts Receivable is cala.lated as Revenues multiplied by Days of Sales Outstanding 1050)/365 Days of Sales Outstanding (DSOis calculated as Accounts Receivable / Revenues 365 PP&E in a year is calculated as PP&E in the previous year plus CapEx in the current year minus Depredation in the current year. Accounts Payable is calculated as Cost of Revenues multiplied by Days of Payables Outstanding (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 1,200 Driver 12,500 Hints for Working on the Cash Flow Statement Cash Flow Statements always aggregate sum up) all the inflows and Outfiows of Cash Flow during a period. Inflows of Cash are positive numbers and Outflows of Cash are negative numbers on the Cash Flow Statement. To help you, we show the Outflows in italics. You should remember that increases in Assets, actually decrease Cash so you are subtracting an increase In contrast, increases in Liabilities, Debt and Equity increase Cash so you are adding an increase Capital Expenditures (Capex) are investments of Cash and an Outflow of Cash on the Cash Flow Statement. As an investment, Capex isn't less than zero, but it is shown as a negative number because it is an Outflow. Dividends are an Outflow of Cash and also shown as a negative number, but Dividends are never less than zero Accounting Acounting 1,500 Cash Flow Statement Net Income + Depredation - Increase in Accounts Receivable - Increase in Accounts Payable - Capital Expenditures (copex) - Dividends Payout Ratio - Increase (Decrease) in Cash The company uses 10 year straight line depredation (10% of PPRE 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) (800) (1,000) (1.000 Accounting Accounting Accounting Business Accounting Divicends is the negative of the Net Income multiplied by Payout Ratio 708 . J K L L M N 0 Q R B C D E F G H Errors in the model will turn red. The exercise is designed such that an error early in the assignment will not adversely impact later gracing 2018 2019 2020 Relationship Notes 10.755 11.842 Revenues is driven by the growth rate 13,026 10% 106 2,223 6,459 Gross Pratits is calculated as Revenues multiplied by Grass Margin Income Statement Revenues Growth Rate Cost of Revenues Grass Profits Gross Margin Operating Expenses (Opex OpFx Percent of Revenues EBIT Net interest Income (Expense) Interest Rate Pretax income Tans Business Driver Accounting Business Driver Business Driver Accounting NA 1500 1700 OpEx is calculated as Revenues multiplied by OpEx Percent Revenues a% EBIT is calculated as Gross Profits minus Operating Expenses (Opbx Interest Income is calculated as interest Rate multiplied by Cash as there is no Debt) 58 68 5% 5% 5% Driver Accounting Business Pretax income is calculated as EBIT plus Net Interest Income (Expenses) Tames is calculated as Pretax Profits multiplied by Tax Rate 0% Driver Tax Rate Net Income Balance Sheet Cash 1,365 1.500 Accounting 1,600 Accounts Receivable Days of Sales Outstanding (DSOI PPE Accounts Payable Days of Payables Outstanding (DPO) Equity 15,079 1,000 Accounting Business Cash is previous year Cash plus Increase (Decrease) in Cash Accounts Receivable is cala.lated as Revenues multiplied by Days of Sales Outstanding 1050)/365 Days of Sales Outstanding (DSOis calculated as Accounts Receivable / Revenues 365 PP&E in a year is calculated as PP&E in the previous year plus CapEx in the current year minus Depredation in the current year. Accounts Payable is calculated as Cost of Revenues multiplied by Days of Payables Outstanding (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 1,200 Driver 12,500 Hints for Working on the Cash Flow Statement Cash Flow Statements always aggregate sum up) all the inflows and Outfiows of Cash Flow during a period. Inflows of Cash are positive numbers and Outflows of Cash are negative numbers on the Cash Flow Statement. To help you, we show the Outflows in italics. You should remember that increases in Assets, actually decrease Cash so you are subtracting an increase In contrast, increases in Liabilities, Debt and Equity increase Cash so you are adding an increase Capital Expenditures (Capex) are investments of Cash and an Outflow of Cash on the Cash Flow Statement. As an investment, Capex isn't less than zero, but it is shown as a negative number because it is an Outflow. Dividends are an Outflow of Cash and also shown as a negative number, but Dividends are never less than zero Accounting Acounting 1,500 Cash Flow Statement Net Income + Depredation - Increase in Accounts Receivable - Increase in Accounts Payable - Capital Expenditures (copex) - Dividends Payout Ratio - Increase (Decrease) in Cash The company uses 10 year straight line depredation (10% of PPRE 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) (800) (1,000) (1.000 Accounting Accounting Accounting Business Accounting Divicends is the negative of the Net Income multiplied by Payout Ratio 708