3 Statement Model - Blank

Table of Contents
3 Statement Model

Notes
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© Corporate Finance Institute. All rights reserved. Historical --> Forecast -->
3 Statement Model
USD millions, except per share data 2018 2019 2020 2021 2022 2023
Balance Sheet Check OK OK OK OK OK OK

Please complete the forecast model for year 2021-2023 based on the historical financial information and the provided assumptions.
Use the completed model to answer the questions 1-7 in this skill assessment.

Assumptions & Drivers

Days in Period 365 365 365 365 365 365 Here are some useful formulas for the three
statements calculations:
Income Statement
Sales YoY Growth N/A 6.5% 7.4% 6.9% 6.9% 6.9% Accounts Receivable Days = Accounts
Gross Margin 53.2% 56.5% 57.4% 55.7% 55.7% 55.7%
Receivable / Revenue x 365
Depreciation and Amortization Expense (% of Revenue) 3.6% 3.2% 3.1% 3.3% 3.3% 3.3% Inventory Days = Inventory / COGS x 365
General and Administration Expense (% of Revenue) 7.2% 7.4% 6.6% 7.1% 7.1% 7.1%
Marketing and Promotion Expense (Fixed Cost) 15,750 17,801 20,656 18,069 19,876 21,863 Accounts Payable Days = Accounts Payable /
Other Operating Expenses (% of Revenue) 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% COGS x 365
Long-term Debt Interest (% of Average Debt) 6.2% 6.2% 6.2% 6.2% 6.2% 6.2%
Tax Rate (% of Income Before Taxes) 34.7% 24.3% 15.3% 24.8% 24.8% 24.8% Capital Asset Turnover = Revenue / End of
Period PP&E
Balance Sheet
Operating Cash Flow = Net Income + All Non-
Capital Asset Turnover Ratio 4.23 4.26 4.40 4.29 4.29 4.29 Cash Expenses + Net Increase in Working
Receivable Days (Sales Basis) 57 59 58 58 58 58 Capital
Inventory Days (COGS Basis) 69 74 74 72 72 72
Payable Days (COGS Basis) 96 102 102 100 100 100 (Note that an increase in current assets causes
Other Current Liabilities (% of Revenue) 1.3% 1.0% 0.6% 1.0% 1.0% 1.0% a reduction in cash, while an increase in current
Long-term Debt 13,400 13,400 13,400 20,000 25,000 28,000 liabilities cases an increase in cash.)
Common Share Capital 5,110 5,110 5,110 5,110 5,110 5,110
Dividend Payout Ratio 83.2% 55.8% 33.7% 57.5% 57.5% 57.5%

NOTE: Calculate PP&E ending balance based on capital asset turnover ratio
18535.12
185.3512
Income Statement

Revenues 54,553 58,088 62,368 66,671 71,271 76,189

Cost of Goods Sold 25,541 25,297 26,558 29,535 31,573 33,751
Gross Profit 29,012 32,791 35,810 37,136 39,698 42,438

Operating Expenses
Depreciation and Amortization 1,983 1,878 1,948 2,200 2,352 2,514
General and Administration 3,942 4,302 4,131 4,733 2,242 2,396
Marketing and Promotion 15,750 17,801 20,656 18,069 19,876 21,863
Other Operating Expenses 1,182 1,294 1,357 1,467 1,568 1,676
Total Operating Expenses 22,857 25,275 28,092 26,469 26,038 28,450

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EBIT (Operating Profit) 6,155 7,516 7,717 10,667 13,661 13,988
Interest 831 831 831 831 831 831
Income Before Taxes 5,324 6,685 6,886 9,836 12,830 13,157
Taxes 1,850 1,627 1,052 2,439 3,182 3,263
Net Income 3,474 5,058 5,834 7,397 9,648 9,894

Common Dividends 2,889 2,820 1,964 4,253 5,548 5,689 -

Balance Sheet

ASSETS
Current Assets
Cash 3,544 3,965 6,806
Accounts Receivable 8,499 9,430 9,863
Inventories 4,803 5,153 5,384
Total Current Assets 16,845 18,548 22,054
Non-Current Assets
Property Plant and Equipment 12,906 13,649 14,187
TOTAL ASSETS 29,751 32,196 36,241

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Accounts Payable 6,701 7,038 7,422
Other Current Liabilities 729 599 389
Total Current Liabilities 7,430 7,637 7,811
Non-Current Liabilities
Long-term Debt 13,400 13,400 13,400
Shareholder's Equity
Common Stock and Additional Paid-In Capital 5,110 5,110 5,110
Retained Earnings 3,812 6,049 9,920
Total Shareholders' Equity 8,922 11,160 15,030
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 29,751 32,196 36,241

Check 0.000 0.000 0.000 0.000 0.000 0.000

Cash Flow Statement

Cash Flows from Operating Activities

Net Income 3,474 5,058 5,834 7,397 9,648 9,894
Depreciation 1,983 1,878 1,948 2,200 2,352 2,514
Changes in Net Working Capital
Accounts Receivables (858) (931) (434)
Inventories (315) (350) (231)
Accounts Payables 328 337 384
Other Current Liabilities 34 (130) (210)
Net Cash Provided by Operating Activities 4,646 5,862 7,291

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Investing Activities
Net Addition to PP&E (2,013) (2,620) (2,486)
Cash Flows from Investing Activities (2,013) (2,620) (2,486)

Financing Activities
Issuance of Common Stock - - -
Payment of Dividends (2,889) (2,820) (1,964)
Net Addition to Long-term Debt - - -
Cash Flows from Financing Activities (2,889) (2,820) (1,964)

Increase/(Decrease) in Cash and Equivalents (256) 421 2,841

Cash and Equivalents, Beginning of the Year 3,800 3,544 3,965
Cash and Equivalents, End of the Year 3,544 3,965 6,806

Supporting Schedules

Property Plant and Equipment (PP&E)

Net PP&E
Beginning of Period 12,876 12,906 13,649
Capital Expenditures/Additions (Disposals) 2,013 2,620 2,486
Depreciation Expense 1,983 1,878 1,948
Net PP&E, End of Period 12,906 13,649 14,187

Retained Earnings (RE)

Beginning of Period 3,227 3,812 6,049
Net Income 3,474 5,058 5,834
Dividends 2,889 2,820 1,964
RE, End of Period 3,812 6,049 9,920

Long-term Debt
Beginning of Period 13,400 13,400 13,400
Additions (Repayments) - - -
LTD, End of Period 13,400 13,400 13,400

Long-term Debt Interest 831 831 831

Total Interest 831 831 831

© Management Development Associates (NA) Inc. - 21317