The exercise is desigped such that an error earfy in the assignment will not adversely impact later grading. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline & & & & & & & DIII & & & \\ \hline & & & - & 2021 & 2022 & 2023E & 2 & Relationship & & Notes \\ \hline \multicolumn{2}{|c|}{ Income Statement } & at & & & 78 & 4 & & & & . \\ \hline 4 & Revenues & t & & 10,004 & 11,004 & +1 & & Business & . & Revenues is ditiven b \\ \hline \multirow[t]{2}{*}{4} & \multicolumn{2}{|l|}{ Growth Rate } & & & 10% & 10% & & Driver & & \\ \hline & \multicolumn{2}{|l|}{ Cost of Revenues } & & 6,002 & 6,713 & & & Accounting & & \\ \hline & Gross Profits & & & & & & & Business & . & Gross Profits is calcul \\ \hline & \multicolumn{2}{|l|}{ Gross Margin } & 1 & & & on & & Drtver & & \\ \hline & \multicolumn{2}{|c|}{ Operating Expenses (OpEx) } & & 1500 & 1700 & & & Business & & OpEx is calculated as \\ \hline & \multicolumn{2}{|c|}{ OpEx Percent of Revenues } & & 1 & + & ONG & . & Driver & & \\ \hline4 & EBIT & & & & {[} & 4 & & Accounting & (3) & EBIT is calculated as C \\ \hline 2 & \multicolumn{2}{|c|}{ Net Interest Income (Expense) } & & 50 & 50 & +1 & & Business & & Interest Income is ca \\ \hline & \multicolumn{2}{|c|}{ Interest Rate } & & 5% & 5% & 5% & 11 & Driver & & 4 \\ \hline & Pretaxincome & & & & & & & Accounting & & Pretaxincome is calcu \\ \hline & Taxes & & & + & & & & Business & & \multirow[t]{2}{*}{ Taxes is calculated as } \\ \hline & Taxpate & & & & & 0NG & (1) & Driver & & \\ \hline & Net Income & 5 & & & & & & & & \\ \hline & & 8 & & & & & & 7. & (9) & \\ \hline \multicolumn{2}{|c|}{ Balance Sheet } & & & & & & & & & \\ \hline & Cash & & & 1,008 & & & 5. & Accounting & & Cash is previous year C \\ \hline & \multicolumn{2}{|c|}{ Accounts Receivable } & & 1,500 & 1,600 & & & & 4 & \multirow{2}{*}{ Accounts Receivable is } \\ \hline & \multicolumn{2}{|c|}{ Days of Sales Outstanding (DSO) } & & & {[} & z & & & & \\ \hline & PP\&E & & & 15,005 & & {[} & 7 & Accounting & & PP\&E in a year is calcul \\ \hline & \multicolumn{2}{|l|}{ Accounts Payable } & & 1,000 & 1,200 & & (1) & Business & & Accounts Payable is cal \\ \hline & \multicolumn{2}{|c|}{ Days of Payables Outstanding (OPO) } & & & & & & Drver & & Days of Payables Outst \\ \hline & Equity: & & & 12,500 & & 1 & Tir & x & & Equity in a year is calcul \\ \hline \end{tabular} Hints for Working on this Assignment This exercises is a bit like solving a puzzle. First, you do the easy formulas to fill in the box. So, first solve for the Revenues in the forecast year in column F by growing the prior year by the growth rate provided in red. The formula in cell F57 should calculate the 2023 Revenues based on the 2022 Revenues and the 2022 Growth Rate. We did this for you in the Revenue Box without shading: Again, solving the puzzle we fill in the blanks we know for sure. So, your next steps it calculate the historical Gross Profits (in D57 and E57) and the historical Gross Margin (in 058 and E58). Once you know these answers, you can apply the historical model to the forecast. This means you will forecast the Gross Margin and use that information to forecast the Gross Profits. Easy, right? Now you have leamed how to bulld this model and can proceed with the rest of the exercise
