SOURCE: Pignataro, P. (2013) Financial Modeling and Valuation.

Wiley Finance Series

Finance Series
 How to Project Financial Statements - Step-by-step Standard Modellin
x STEP 1: Project the Income Statement
1. Project revenues (quantity and price separately)
2. Project expenses (usually related to revenues)
3. Leave depreciation and amortization expenses empty (to come from PPE Schedule)
4. Leave other non-cash income/expenses empty (to come from their respective schedules)
5. Leave interest income and expenses empty (to come from Debt/Financing Schedule)
6. Do not project other non-recurrent income or expenses (they are not recurrent)
7. Build to net income

x STEP 2: Project CFO (Indirect Method)

8. Pull in net income from calculations in step 1
9. Leave depreciation and amortization expenses empty (to come from PP&E Schedule and R&D Schedule)
10. Leave other non-cash income/expenses empty (to come from their respective schedules)
11. Leave interest income and expenses empty (to come from Debt/Financing Schedule)
12. Leave changes in operating working capital empty (to come from OWC Schedule)
13. Leave deferred taxed empty (to come from Tax Schedule)
14. Project other items if necessary

x STEP 3: Project Operating Working Capital (OWC) Schedule

15. Pull in average turnover ratios from historical financial statements (Receivables, Inventories, Payables, etc)
16. Project efficiencies in these turnover ratios (ad-hoc)
17. Pull in items from step 1 associated with the OWC (sales, expenses)
18. Using these items, calculate the new accounts for the projected OWC (Receivables, Inventories, Payables, etc)
19. Using the projected OWC, calculate their corresponding non-cash accounts (provisions, expected credit loss, etc) as balances and exp

x STEP 4: Project PP&E Schedule

20. Project CAPEX (usually related to sales, but check first if the firm's PP&E are at full capacity or if it has upcoming investment plans)
21. Project depreciation expenses from this new CAPEX in point 20
22. Project depreciation expenses from the already existing PP&E
23. Calculate the gross PP&E (remember the stock-flow identity) from point 20
24. Calculate the Accumulated Depreciation (remember the stock-flow identity) from point 21 and point 22

x STEP 5: Project R&D Schedule

25. Follow all points in step 4, but for R&D (amortization is analogous to the depreciation)

x STEP 6: Project CFI

26. Pull in CAPEX from step 4
27. Pull in R&D investments from step 5
28. Project other investment expenses

x STEP 7: Debt/Financing Schedule (Part I)

29. Pull in debt from historical financial statements
 30. Project interest rates for each type of debt from the existing debt contracts or market forecasts if applicable
31. Calculate projected interest expenses using point 29 and point 30. Tip: calculate interests from beginning debt balances to avoid circula

x STEP 8 Adjust Income Statement, Balance Sheet and Cash Flow Statement (Part I)
32. Income statement: include the projected non-cash expenses related to OWC from step 3
33. Income statement: include the projected depreciation expenses from step 4
34. Income statement: include the projected amortization expenses from step 5
35. Income statement: include the projected interest expenses from step 7
36. Income statement: calculate the projected EBT

37. Cash flow statement (CFO): include the projected depreciation expenses from step 4
38. Cash flow statement (CFO): include the projected amortization expenses from step 5
39. Cash flow statement (CFO): include the projected change in OWC from step 3
40. Cash flow statement (CFO): include the projected non-cash expenses related to OWC from step 3
41. Cash flow statement (CFO): include the projected CAPEX from step 4

42. Balance sheet: include the projected OWC accounts from step 3
43. Balance sheet: include the projected PP&E from step 4 (recall the stock-flow identitiy)
44. Balance sheet: include the projected R&D from step 5 (recall the stock-flow identitiy)

x STEP 9: Tax Schedule (Differences in Depreciation Accounting)

45. Calculate the projected tax expense according to the Company's accounting policies
46. Replicate all accounts in projected EBT from step 8, except for the depreciation expense
47. Calculate the new depreciation expense according to the accounting policies from the Tax Authority and then calculate the correspondi
48. Calculate the projected tax expense according to the Tax Authority's accounting policies
49. If the tax expense according to the Company's policies is greater than the tax expense according to the Tax Authority, this is an increas
50. If the tax expense according to the Company's policies is less than the tax expense according to the Tax Authority, this is an increase in

x STEP 10: Adjust Income Statement, Balance Sheet and Cash Flow Statement (Part II)
51. Income statement: register the projected tax expense according to the Company's accounting policies
52. Income statement: register the projected net income

53. Cash flow statement (CFO): include the projected deferred taxes from step 9
54. Cash flow statement (CFO): using the new information from point 52 and 53, calculate the CFO using the indirect method

55. Balance sheet: Register the corresponding DTA/DTL from the deferred taxes in step 9

x STEP 11: Project Dividend Payments

56. Project a common dividend-to-net income payout ratio, based on the historical dividend payments or the Company's dividend policies
57. Using this ratio, calculate the projected dividend payments

x STEP 12: Calculate the Cash Available for Debt Payments

58. Pull in beginning cash balances from historical financial statements
59. Calculate the projected FCFF
60. Calculate the Cash Available for Debt Payments: Substract dividends and interest payments (net of tax shield) from FCFF, and then ad

x STEP 13: Debt/Financing Schedule (Part II)

 61. Pull in debt balances from historical financial statements
62. Project the required debt amortization payments
63. Calculate the Cash surplus/Cash deficit after substracting the debt amortization payments from the Cash Availabe for Debt Payments. E
64. Calculate the projected debt balances after the required amortizations have been paid

x STEP 14: Adjust Income Statement, Balance Sheet and Cash Flow Statement (Part III)
65. Cash flow statement (CFF): include the dividend payments from step 11
66. Cash flow statement (CFF): include the debt amortization payments
67. Cash flow statement: calculate the change in cash (CFO + CFI + CFF)

68. Balance sheet: include the projected debt balances from step 13
69. Balance sheet: include the projected change in cash from point 67 in the cash balances
70. Balance sheet: include the projected net income minus the projected dividend payments as an increase in Retained Earnings
71. Balance sheet: If there is a remaining asset/liability, check their nature (financing or operating) and forecast its corresponding cash flow
72. Check that the balance sheet is balanced

The model is complete. You are welcome

tep Standard Modelling Guide

Payables, etc)

es, Payables, etc)

cted credit loss, etc) as balances and expenses

or if it has upcoming investment plans)

m beginning debt balances to avoid circularity in the formulas later on

thority and then calculate the corresponding EBT

ding to the Tax Authority, this is an increase in DTL

g to the Tax Authority, this is an increase in DTA

FO using the indirect method

ents or the Company's dividend policies

(net of tax shield) from FCFF, and then add the beginning cash balances
m the Cash Availabe for Debt Payments. Evaluate need for new debt

n increase in Retained Earnings

) and forecast its corresponding cash flow/income statement account in order to project it or either do not project it
This guide was made by Javier Barrantes. All intelect
made by Javier Barrantes. All intelectual work is exclusively attributed to Javier Barrantes. Sources used: Pignataro
 Operating Model

Forecast horizon
x Income Statement

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Sales revenue – 1,580,684.0 1,578,074.0
COGS, net of non-cash entries – (1,308,533.0) (1,345,745.0)
Inventories write-offs (986.0) –
Depreciation – (44,673.0) (70,061.0)
Other devaluations (304.0)
COGS – (1,354,496.0) (1,415,806.0)
Gross profit – 226,188.0 162,268.0
Sales and distribution (ex. depreciation) – (16,770.0) (18,833.0)
Depreciation – (74.0) (616.0)
Sales and distribution expenses – (16,844.0) (19,449.0)
Administrative expenses (ex. Depreciation and amortization) – (29,560.0) (29,605.0)
Depreciation – (1,514.0) (1,924.0)
Amortization – – (8.0)
Administrative expenses – (31,074.0) (31,537.0)
Expected credit losses – (446.0) (223.0)
Other income (ex. Revaluation income) 10,338.0 24,508.0
Revaluation income – 651.0
Other income – 10,338.0 25,159.0
Other expenses (ex. Loss on asset disposal) – (7,350.0) (2,619.0)
Loss on asset disposal – (1,073.0) –
Other expenses – (8,423.0) (2,619.0)
Operating income (EBIT) – 179,739.0 133,599.0
Term deposits 6,991.0 12,489.0
Commercial accounts payable 477.0 356.0
Financial income – 7,468.0 12,845.0
Financial expenses – (4.0) (671.0)
Exchange rate effects – 4,668.0 (8,653.0)
Earnings before tax (EBT) – 191,871.0 137,120.0
Tax expenses – (59,527.0) (47,963.0)
Net income – 132,344.0 89,157.0
EBITDA
PP&E depreciation (46,261.0) (69,823.0)
Leased property (2,778.0)
Depreciation – (46,261.0) (72,601.0)
Amortization – (8.0)
Operating income (EBIT) – 179,739.0 133,599.0
EBITDA – 226,000.0 206,208.0

x Balance Sheet

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Assets

Cash and cash equivalents 227,520 560,344 579,929

Commercial accounts receivable (ex. Expected losses) 212,986 235,254 260,546
Expected credit losses (11,097.0) (10,879.0) (10,890.0)
Commercial accounts receivable 201,889 224,375 249,656
Other accounts receivable 169,286 108,154 84,855
Inventories (ex. Inventories write-off) 418,901 407,188 420,130
Inventories write-off (1,082.0) (2,068.0) (1,082.0)
Inventories 417,819 405,120 419,048
Total current assets 1,016,514 1,297,993 1,333,488
Other accounts receivable 23,596 912 912
Property, plant and equipment, gross 1,441,837 1,454,172 1,479,227
Accumulated depreciation (882,341.0) (926,816.0) (996,542.0)
Property, plant and equipment, net 559,496 527,356 482,685
Leased properties, gross 11,050
Accumulated depreciation (2,778.0)
Leased properties 8,272
Deferred tax asset 2,789
Intangibles 1,616 1,255 1,422
Total non-current assets 587,497 529,523 493,291
Total assets 1,604,011 1,827,516 1,826,779

Liabilities and equity

Commercial accounts payable 132,339 172,505 145,799

Related parties accounts payable 113,093 138,598 188,398
Other accounts payable 39,713 52,412 54,207
Lease liability 2,229
Total current liabilities 285,145 363,515 390,633
Deferred tax liability 12,791 14,814
Lease liability 6,332
Total non-current liabilities 12,791 21,146
Total liabilities 285,145 376,306 411,779

Common equity 1,227,918 1,227,918 1,227,918 1,227,918 1,227,918 1,227,918 1,227,918 1,227,918
Additional paid-in capital 83,000 83,000 83,000 83,000 83,000 83,000 83,000 83,000
Other capital reserves 995 995 14,925 14,925 14,925 14,925 14,925 14,925
Retained earnings 6,953 139,297 89,157
Total shareholder's equity 1,318,866 1,451,210 1,415,000 1,325,843 1,325,843 1,325,843 1,325,843 1,325,843

Balances? yes yes yes 1,325,843 1,325,843 1,325,843 1,325,843 1,325,843

x Cash Flow Statement

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Operating activities

Net income 132,344.0 89,157.0

Expected credit losses (446.0) (223.0)
Inventories write-offs (986.0)
Other devaluations (304.0)
Exchange rate effect 4,668.0 (8,653.0)
Revaluation income 651.0
Loss on asset disposal (1,073.0)
Depreciation (46,261.0) (72,601.0)
Amortization – (8.0)
Non-cash accounts in income statement (44,402.0) (80,834.0)
Δ Commercial accounts receivable, net 22,268.0 25,292.0
Δ Other accounts receivable (83,816.0) (23,299.0)
Δ Inventories (11,713.0) 12,942.0
Δ Commercial accounts payable 40,166.0 (26,706.0)
Δ Related parties accounts payable 25,505.0 49,800.0
Δ Other accounts payable 12,699.0 1,795.0
Change in net operating working capital (151,631.0) (9,954.0)
Δ Deferred tax liabilities 12,791.0 2,023.0
Δ Deferred tax assets (2,789.0) –
Tax adjustments (15,580.0) (2,023.0)
Cash flow from operating activities 343,957.0 181,968.0

Investing activities

CAPEX – (15,194.0) (25,210.0)

Cash flow from investing activites – -15,194.0 -25,210.0

Financing activities

Dividend payments – – -125,367.0

Lease payments – – -3,153.0
Cash flow from financing activities – – -128,520

Change in cash and cash equivalents .0 328,763.0 28,238.0

Exchange rate effect .0 4,668.0 -8,653.0 .0 .0 .0 .0 .0

Cash and cash equivalents (beginning balance) .0 227,520.0 560,344.0

Cash and cash equivalents (end balance) .0 560,951.0 579,929.0

x Revenue, COGS and SG&A Schedule

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Revenue - by client sector

Construction 1,311,840.0 1,347,988.0 1,414,823.3 1,484,972.4 1,545,262.3 1,609,576.1 1,678,208.5

Industrial 220,891.0 196,400.0 199,999.9 203,816.4 207,596.4 211,319.4 215,270.9
Mining 47,953.0 33,686.0 34,664.8 36,209.4 37,379.7 38,618.3 39,961.0
Revenue .0 1,580,684.0 1,578,074.0 1,649,488.0 1,724,998.3 1,790,238.4 1,859,513.9 1,933,440.4

crecimiento de ventas - construccion 5.0% 5.0% 4.1% 4.2% 4.3% =+O165*O169

crecimiento de ventas - industrial 1.8% 1.9% 1.9% 1.8% 1.9% =+O166*O170
crecimiento de ventas - mining 2.9% 4.5% 3.2% 3.3% 3.5% =+O167*O171

Crecimiento PBI nominal - construccion 9.9% 9.9% 8.1% 8.3% 8.5% =+(1+O173)*(1+O$177)-1
Crecimiento PBI nominal - industrial 6.1% 6.4% 6.2% 6.0% 6.2% =+(1+O174)*(1+O$177)-1
Crecimiento PBI nominal - mining 3.6% 5.6% 4.0% 4.1% 4.3% =+(1+O175)*(1+O$177)-1

Nominal GDP elasticity of sales - construction - - - 0.5 0.5 0.5 0.5 0.5
Nominal GDP elasticity of sales - industrial - - - 0.3 0.3 0.3 0.3 0.3
Nominal GDP elasticity of sales - mining - - - 0.8 0.8 0.8 0.8 0.8

Construction real GDP growth (%) 2.2% 9.0% 7.8% 7.8% 7.8% 6.0% 6.2% 6.4%
Industrial real GDP growth (%) -2.5% 3.7% 3.6% 4.0% 4.3% 4.1% 3.9% 4.2%
Mining real GDP growth (%) 4.2% 2.2% 2.4% 1.6% 3.5% 2.0% 2.1% 2.3%

WPI - Inflation (%) 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Expenses

COGS (net of non-cash entries)/Sales (%) 83% 85% 84% 84% 84% 84% 84%
COGS (net of non-cash entries) (1,308,533.0) (1,345,745.0) 1,386,068.0 1,449,519.4 1,504,340.9 1,562,553.2 1,624,673.7

Sales and distribution (ex. depreciation)/Sales (%) 1.06% 1.19% 1.1% 1.1% 1.1% 1.1% 1.1%
Sales and distribution (ex. depreciation) (16,770.0) (18,833.0) 18,592.6 19,443.7 20,179.1 20,960.0 21,793.3

Administrative expenses (ex. Depreciation and amortization)/Sales (%) 1.87% 1.88% 1.9% 1.9% 1.9% 1.9% 1.9%
Administrative expenses (ex. Depreciation and amortization) (29,560.0) (29,605.0) 30,895.7 32,310.1 33,532.0 34,829.6 36,214.3

x Operating Working Capital Schedule

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Operating working capital

Commercial accounts receivable (ex. Expected credit losses) 212,986 235,254 260,546
Other accounts receivable 192,882 109,066 85,767
Inventories (ex. Write-offs) 418,901 407,188 420,130
OWC assets 824,769 751,508 766,443
Commercial accounts payable 132,339 172,505 145,799
Related parties accounts payable 113,093 138,598 188,398
Other accounts payable 39,713 52,412 54,207
OWC liabilities 285,145 363,515 388,404
Net operating working capital 539,624 387,993 378,039

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Working capital drivers

Sales revenues – 1,580,684.0 1,578,074.0

COGS, net of non-cash entries – (1,308,533.0) (1,345,745.0)
SG&A, net of non-cash entries – (46,330.0) (48,438.0)

Commercial receivables turnover – 7.1 6.4

Inventories turnover – 3.2 3.3
Commercial payables turnover – 8.6 8.5
Related parties payables turnover – 10.4 8.2
Other accounts payables turnover – 1.0 0.9

Efficiency improvement in receivables collection – – – 0.0% 0.0% 0.0% 0.0% 0.0%

Efficiency improvement in production – – – 0.0% 0.0% 0.0% 0.0% 0.0%
Efficiency improvement in payments – – – 0.0% 0.0% 0.0% 0.0% 0.0%
Efficiency improvement in wages and marketing expenses paymen – – – 0.0% 0.0% 0.0% 0.0% 0.0%

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Provisions and write-offs

Commercial accounts receivable (ex. Expected credit losses) 212,986 235,254 260,546
Expected credit loss -11,097 -10,879 -10,890
Expected credit loss / Receivables (%) -5.2% -4.6% -4.2% -5.0% -4.5% -5.5% -5.5% -6.5%
Expected credit loss expense

Inventories (ex. Write-offs) 418,901 407,188 420,130

Inventories write-offs -1,082 -2,068 -1,082
Write-offs / Inventories (%) -0.3% -0.5% -0.3% -0.3% -0.3% -0.3% -0.3% -0.3%
Inventory write-off expense

x Property, Plant & Equipment Schedule

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
CAPEX

CAPEX/Sales (%) – 1.0% 1.6% 1.3% 1.3% 1.3% 1.3% 1.3%

CAPEX – (15,194.0) (25,210.0)

Land – (3,476.0) –
Works in progress – (8,156.0) (15,667.0)
Non-depreciable CAPEX – (11,632.0) (15,667.0)
Buildings – – (456.0)
Machinery – (2,417.0) (5,946.0)
Transport units – (92.0) (143.0)
Furniture and fixtures – – (295.0)
Equipments – (1,053.0) (2,703.0)
Depreciable CAPEX – (3,562.0) (9,543.0)

Land/CAPEX (%) – 22.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Works in progress/CAPEX (%) – 53.7% 62.1% 62.1% 62.1% 62.1% 62.1% 62.1%
Buildings/CAPEX (%) – 76.6% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8%
Machinery/CAPEX (%) – 0.0% 23.6% 23.6% 23.6% 23.6% 23.6% 23.6%
Transport units/CAPEX (%) – 15.9% 0.6% 0.6% 0.6% 0.6% 0.6% 0.6%
Furniture and fixtures/CAPEX (%) – 0.6% 1.2% 1.2% 1.2% 1.2% 1.2% 1.2%
Equipments/CAPEX (%) – 0.0% 10.7% 10.7% 10.7% 10.7% 10.7% 10.7%

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Existing CAPEX depreciation expenses (straight line)

Estimated total life of existing PP&E (yrs)

Estimated consumed life of existing PP&E (yrs)
Estimated remaining useful life of existing PP&E (yrs)

Existing CAPEX depreciation

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
New CAPEX depreciation expenses (straight line)

Useful life (yrs)

Buildings 19
Machinery 15
Transport units 5
Furniture and fixtures 10
Equipments 7

Buildings .0 – – – – –
Machinery .0 – – – – –
Transport units .0 – – – – –
Furnitute and fixtures .0 – – – – –
Equipments .0 – – – – –
2020 CAPEX depreciation .0 – – – – –
Buildings .0 – – – –
Machinery .0 – – – –
Transport units .0 – – – –
Furnitute and fixtures .0 – – – –
Equipments .0 – – – –
2021 CAPEX depreciation .0 – – – –
Buildings .0 – – –
Machinery .0 – – –
Transport units .0 – – –
Furnitute and fixtures .0 – – –
Equipments .0 – – –
2022 CAPEX depreciation .0 – – –
Buildings .0 – –
Machinery .0 – –
Transport units .0 – –
Furnitute and fixtures .0 – –
Equipments .0 – –
2023 CAPEX depreciation .0 – –
Buildings .0 –
Machinery .0 –
Transport units .0 –
Furnitute and fixtures .0 –
Equipments .0 –
2024 CAPEX depreciation .0 –

New CAPEX depreciation .0 – – – – –

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Projected PP&E and depreciation expenses

Property, plant & equipment, gross 1,479,227

Total depreciation expenses (69,823.0)
Accumulated depreciation (996,542.0)
Property, plant & equipment, net 482,685

x Leased Properties
(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Depreciation (straight line) - Company's accounting policies

Leased properties, gross 11,050.0

Depreciation expenses (2,778.0)
Accumulated depreciation (2,778.0)
Leased properties, net 8,272.0

Depreciation (Accelerated) - Tax authorities's accounting policies

Leased properties, gross 11,050.0

Depreciation expenses (2,778.0)
Accumulated depreciation (2,778.0)
Leased properties, net 8,272.0

x Depreciation Allocation
(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Depreciation expenses

COGS - depreciation (%) 96.5% 96.5% 96.5% 96.5% 96.5% 96.5%

Sales and distribution expenses - depreciation (%) 0.8% 0.8% 0.8% 0.8% 0.8% 0.8%
Administrative expenses - depreciation (%) 2.7% 2.7% 2.7% 2.7% 2.7% 2.7%

COGS - depreciation (70,061.0)

Sales and distribution expenses - depreciation (616.0)
Administrative expenses - depreciation (1,924.0)
Total depreciation expenses (72,601.0)

x Debt/Financing Schedule

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Cash Available to Pay Debt

FCFF
Interest expenses
Interest cash tax shield
Dividend payments
Cash flow available for debt service
Beginning cash balance
Minimum cash balance 0 0 0 0 0
Total cash available for debt service
( – ) Mandatory payments (Short-term lease)
( – ) Mandatory payments (Long-term lease)
Cash budget surplus / cash budget deficit

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Debt

Short-term lease obligations

Beginning balance – 2,229.0 – – – –
( – ) Mandatory payments – (2,229.0) – – – –
( – ) Optional payments –
Ending balance – – – – – – –
Interest rate 7.5% 7.5% 7.5% 7.5% 7.5%
Interest expense
Page 13 of 15
 Operating Model
Long-term lease obligation
Beginning balance – 6,332 6,332 5,306 4,280 3,255
( – ) Mandatory payments (1,025.8) (1,025.8) (1,025.8) (1,025.8)
( – ) Optional payments –
Ending balance – – 6,332 5,306 4,280 3,255 2,229
Interest rate 8.0% 8.0% 8.0% 8.0% 8.0%
Interest expense

x Tax Schedule

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Tax rate
Tax rate 29.50% 29.50% 29.50% 29.50% 29.50%

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Income statement for tax purposes

EBIT - Company's accounting policies

Depreciation expense - Company's accounting policies
EBITD
PP&E depreciation - Tax authority's accounting policies
Leased properties depreciation - Tax authority's accounting policies
Depreciation expense - Tax authority's accounting policies
Financial income
Financial expenses
EBT - Tax authority's accounting policies

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Tax expense

Cash tax expense - Tax authority's accounting policies

Tax expense - Company's accounting policies
Difference in tax expenses

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Deferred taxes schedule

Deferred tax liability

Beginning balance
Increase in deferred taxes
Ending balance

Deferred tax asset

Beginning balance – – – –
Increase in tax benefit
Ending balance

x Dividends Schedule

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Dividend payments

Payout ratio (as % of net income) 33% 33% 33% 33% 33%
Dividend payments

Retained earnings, beginning balance

Net income
Dividend payments
Retained earnings, end balance

x Free Cash Flows to the Firm (FCFF)

(in S/ thousands, unless otherwise stated) 2017 2018 2019 2020 2021 2022 2023 2024
Free Cash Flows to the Firm (FCFF)

Operating income (EBIT) 179,739.0 133,599.0

Tax expense -59,527.0 -47,963.0
Δ Deferred tax liabilities 12,791.0 2,023.0
Δ Deferred tax assets -2,789.0 .0
Cash tax expense -43,947.0 -45,940.0
Earnings before taxes (EBT) 191,871.0 137,120.0
Implicit cash tax rate (t*) 23% 34%
EBIT*(1-t*) 138,570.8 88,838.7
Expected credit losses -446.0 -223.0
Inventories write-offs -986.0 .0
Other revaluations 304.0 .0
Exchange rate effect 4,668.0 -8,653.0
Revaluation income .0 651.0
Loss on asset disposal -1,073.0 .0
Depreciation -46,261.0 -72,601.0
Amortization – (8.0)
Non-cash accounts in income statement (43,794.0) (80,834.0)
Δ Commercial accounts receivable, net 22,268.0 25,292.0
Δ Other accounts receivable (83,816.0) (23,299.0)
Δ Inventories (11,713.0) 12,942.0
Δ Commercial accounts payable 40,166.0 (26,706.0)
Δ Related parties accounts payable 25,505.0 49,800.0
Δ Other accounts payable 12,699.0 1,795.0
Change in net operating working capital (151,631.0) (9,954.0)
CAPEX (15,194.0) (25,210.0)
Free cash flow to the firm 318,801.8 154,416.7

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 Operating Model

This model was made by Javier Barrantes for the course Corporate Finance II. All intelectual work is attributable to Javier Barrantes. Sources that helped in the creation of this model: Pignataro, Macabacus

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