FIRST FINANCIAL MODEL Sales growth 10% Current assets/Sales 15% Current liabilities/Sales 8% Net fix

 
   

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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
10.00%

Interest paid on cash and marketable
securities
8.00%

Tax rate
40%

Dividend payout ratio
40%

Year
0
1
2
3
4
5

Income statement

Sales
1,000
1,100
1,210
1,331
1,464
1,611
#NAME?

Costs of goods sold
(500)
(550)
(605)
(666)
(732)
(805)
#NAME?

Interest payments on debt
(32)
(32)
(32)
(32)
(32)
(32)
#NAME?

Interest earned on cash and marketable
securities
6
9
14
20
26
33
#NAME?

Depreciation
(100)
(117)
(137)
(161)
(189)
(220)
#NAME?

Profit before tax
374
410
450
492
538
587
#NAME?

Taxes
(150)
(164)
(180)
(197)
(215)
(235)
#NAME?

Profit after tax
225
246
270
295
323
352
#NAME?

Dividends
(90)
(98)
(108)
(118)
(129)
(141)
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Retained earnings
135
148
162
177
194
211
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Balance sheet

Cash and marketable
securities
80
144
213
289
371
459
#NAME?

Current assets
150
165
182
200
220
242
#NAME?

Fixed assets

At cost
1,070
1,264
1,486
1,740
2,031
2,364
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Depreciation
(300)
(417)
(554)
(715)
(904)
(1,124)
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Net fixed assets
770
847
932
1,025
1,127
1,240
#NAME?

Total assets
1,000
1,156
1,326
1,513
1,718
1,941
#NAME?

Current liabilities
80
88
97
106
117
129
#NAME?

Debt
320
320
320
320
320
320
#NAME?

Stock
450
450
450
450
450
450
#NAME?

Accumulated retained earnings
150
298
460
637
830
1,042
#NAME?

Total liabilities and equity
1,000
1,156
1,326
1,513
1,718
1,941
#NAME?

Year
0
1
2
3
4
5

Free cash flow calculation

Profit after tax

246
270
295
323
352
#NAME?

Add back depreciation

117
137
161
189
220
#NAME?

Subtract increase in current
assets

(15)
(17)
(18)
(20)
(22)
#NAME?

Add back increase in current
liabilities

8
9
10
11
12
#NAME?

Subtract increase in fixed
assets at cost

(194)
(222)
(254)
(291)
(333)
#NAME?

Add back after-tax interest
on debt

19
19
19
19
19
#NAME?

Subtract
after-tax interest on cash and+A14 mkt. securities
(5)
(9)
(12)
(16)
(20)
#NAME?

Free cash flow

176
188
201
214
228
#NAME?

CONSOLIDATED
STATEMENT OF CASH FLOWS: RECONCILING
THE CASH BALANCES

Cash flow from operating activities

Profit after tax

246
270
295
323
352
#NAME?

Add back depreciation

117
137
161
189
220
#NAME?

Adjust for changes in net working
capital:

Subtract increase in current assets

(15)
(17)
(18)
(20)
(22)
#NAME?

Add back increase in current liabilities

8
9
10
11
12
#NAME?

Net cash from operating activities

356
400
448
502
562
#NAME?

Cash flow from investing activities

Aquisitions of fixed assets–capital
expenditures

(194)
(222)
(254)
(291)
(333)
#NAME?

Purchases of investment securities

0
0
0
0
0
<-- not="" in="" our="" model="" proceeds="" from="" sales="" of="" investment="" securities="" 0="" 0="" 0="" 0="" 0=""><-- not="" in="" our="" model="" net="" cash="" used="" in="" investing="" activities="" (194)="" (222)="" (254)="" (291)="" (333)="" #name?="" cash="" flow="" from="" financing="" activities="" net="" proceeds="" from="" borrowing="" activities="" 0="" 0="" 0="" 0="" 0="" #name?="" net="" proceeds="" from="" stock="" issues,="" repurchases="" 0="" 0="" 0="" 0="" 0="" #name?="" dividends="" paid="" (98)="" (108)="" (118)="" (129)="" (141)="" #name?="" net="" cash="" from="" financing="" activities="" (98)="" (108)="" (118)="" (129)="" (141)="" #name?="" net="" increase="" in="" cash="" and="" cash="" equivalents="" 64="" 70="" 76="" 82="" 88="" #name?="" check:="" changes="" in="" cash="" and="" mkt.="" securities="" 64="" 70="" 76="" 82="" 88="" #name?="">