Course : FINC - 6006

Financial Modelling Laboratory

Effective Period: February 2017

The Basic Financial Statement

Session 2
 Acknowledgement
If you are using PowerPoint from textbook, please
use this slide to give information about the source
of the slides.

Example:

These slides have been adapted from:

Timothy R. Mayes, Todd M. Shank. (2014). Financial

Analysis with Microsoft Excel. 05. CENGA. ISBN:
9781111826246.

Chapter 2
 Chapter 2
The Basic Financial Statements

Objective:
1.Explain the purpose and understand the
format of the firm’s three basic financial
statements: the income statement, the balance
sheet, and the statement of cash flows
2.Construct each of these statements in Excel
with data for any company
3. Link worksheet together so that formulas in one
worksheet can reference data in another and
update automatically when changes are made

4. Use Excel’s Outline tool to selectively display or

hide parts of a financial statement
Exhibit 2-1 EPI’s income Statement for 2014 and 2013
 Building an Income Statement in Excel

See Exhibit 2-1

EPI’s Income
Statement For
2014 and 2013
1.Titles in A1:A3
2.In A1 type:
Elvis Product
International
3.In A2 type:
Income Statement
3. In A3 type:
For the year Ended
Dec. 31,2014

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 Exhibit 2-1
Note: The year in
cell B4 is the one
which all of years
in this workbook
depend on. To
change all dates,
change B4 to
another year. This
will also be
reflected in the text
in these workbooks.
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 Exhibit 2-4
The Balance Sheet
with a Custom
Number Format
1.In cell A3: For
The Year Ended
Dec.31, 2014 ($
in 000’s)
2.Note: All of the
values on this
sheet reference
the original
values from the
Balance Sheet.
The only purpose
of this sheet is to
show the effect
of the custom
number format.
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 Exhibit 2-5 (p.55)
EPI’s Common-Size Income
Statements

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 To Create The common –
1. Create a copy of Incom
Statement worksheet
rename worksheet as
“Common-Size Incom
Statement”
2. Income statement, in
type:
=‘IncomeStatement’!
B5/’Income Stateme
B5

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 Exhibit 2-5
EPI’s Common-Size Income
Statements
1.Create a copy of Balance She
worksheet and rename workshe
as
“Common-Size Balance She
2. In B5 enter:
=‘Balance Sheet’!B5/ ‘Balance
Sheet’!B$12

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 Stateme
nt of
Cash
Flow
Exhibit
2-7
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 Building a Statement of Cash Flow

Table 2-2
Determining The Change In The Cash Balance
Beginning Cash Balance
+ Cash inflows (sources)
- Cash outflow (uses)
= Ending Cash Balance
 In B5 enter the
formula:
=‘Income
Statement’!B15
In B6 type:
=‘Income
Statement ‘!B10
In B7 type:
=‘Balance Sheet’!
C6-’Balance
Sheet’!B6
In B9:
=‘Balance Sheet’!
B14-’BalanceShe
et’!C14
In B10 type:
=‘Balance Sheet’!
B16-’Balance
Sheet’!C16
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 Cash Flow from Opera
In C11 type:
=SUM(B5:B10)

Cash Flow from Invest

in B13 type:
=‘Balance Sheet’!C9-
Balance Sheet’!B9
Total cash flow from
investing C14:
=B13

In B16 enter:
=‘Balance Sheet’!
B15-’Balance Sheet’!C

In B18 enter:
=‘Balance Sheet’!
B20-’Balance Sheet’!C
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 Dividend paid
B19 enter
formula:
=- (‘Income
Statement’!
B15-(‘Balance
Sheet’!B21-
Balance
Sheet’!C21)

Cash Balance:
In C20 enter:
=SUM(C11:C1
9)

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Table 2-3 Signs of Cash Flow For The
Statement of Cash Flow

Direction of Order of
Change Subtraction
Type of Item Increase Decrease
Asset - + Older - Newer
Liability or + - Newer - Older
Equity
 PROBLEMS

1. a,b,c,d,e
2. a,b
3. a,b (see attachment)
THANK YOU