Financial Statements

Income statement Year-0 Ratios %ages

Sales 1,000
Costs of goods sold -500 CGS/Sales 50%
Interest payments on debt -32 Int/Debt 10%
Interest earned on cash and marketable securities 6 Int/Mkt 8%
Depreciation -100
Profit before tax 374 374
Taxes -150 -40% Tax Rate
Profit after tax 224
Dividends -90 -40% Div Payout Ratio
Retained earnings -90
Balance sheet
Cash and marketable securities 80
Current assets 150 CA/Sales 15%
Fixed assets
At cost 1,070
Depreciation -300
Net fixed assets 770 NFA/Sales 77%
Total assets 1000

Current liabilities 80 CL/Sales 8%

Debt 320
Stock 450
Accumulated retained earnings 150
Total liabilities and equity 1000

Plug-Cash & Mkt Sec 80

%ages
 FIRST FINANCIAL MODEL

Sales growth 10%

Current assets/Sales 15%
Current liabilities/Sales 8%
Net fixed assets/Sales 77%
Costs of goods sold/Sales 50%
Depreciation rate 10%
Interest rate on debt 10%
Interest paid on cash and marketable securities 8%
Tax rate 40%
Dividend payout ratio 40%
AL MODEL
Year Year-0 Year-1 Year-2 Year-3 Year-4 Year-5
Income Statement
Sales 1000 1100 1210 1331 1464 1611
Costs of goods sold 500 550 605 666 732 805
Interest payments on debt -32 -32 -32 -32 -32 -32
Interest earned on cash and m. securities 6 9 14 20 26 33
Depreciation -100 -117 -137 -161 -189 -220
Profit before tax 374 410 450 492 538 587
Taxes -150 -164 -180 -197 -215 -235
Profit after tax 225 246 270 295 323 352
Dividends -90 98 108 118 129 141
Retained earnings 135 148 162 177 194 211

Balance sheet
Cash and marketable securities 80 144 213 289 371 459
Current assets 150 165 182 200 220 242
Fixed assets
At cost 1070 1264 1486 1740 2031 2364
Depreciation -300 -417 -554 -715 -904 -1124
Net fixed assets 770 847 932 1025 1127 1240
Total assets 1000 1156 1326 1513 1718 1941

Current liabilities 80 88 97 106 117 129

Debt 320 320 320 320 320 320
Stock 450 450 450 450 450 450
Accumulated retained earnings 150 298 460 637 830 1042
Total liabilities and equity 1000 1156 1326 1513 1718 1941
Year-6 Year-7 Year-8 Year-9 Year-10

1772 1949 2144 2358 2594

886 974 1072 1179 1297
-32 -32 -32 -32 -32
40 48 57 66 75
-255 -296 -342 -395 -455
639 695 754 818 885
-256 -278 -302 -327 -354
383 417 453 491 531
153 167 181 196 212
230 250 272 294 319

554 655 763 877 998

266 292 322 354 389

2743 3176 3668 4228 4864

-1379 -1675 -2017 -2412 -2867
1364 1501 1651 1816 1997
2183 2448 2735 3046 3384

142 156 171 189 207

320 320 320 320 320
450 450 450 450 450
1272 1522 1793 2088 2406
2183 2448 2735 3046 3384