CFI - FMVA Final Assessment Case Study 1A [PDF]

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FMVA Final Assessment - Case Study A July 2021 Notes This Excel model is for educational purposes only and should not be used for any other reason. All content is Copyright material of CFI Education Inc. https://corporatefinanceinstitute.com/

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Model Inputs and Assumptions

All Figures in US$000's unless otherwise stated.

Model Inputs and Assumptions General Assumptions Forecast Scenario Days Per Year Base Case Capital Assumptions Asset Salvage Value (% of Capital Addition) Asset Useful Life (New Additions)

365

10% 4 Years

© Corporate Finance Institute. All rights reserved.

Historical and Forecast Financial Information All Figures in US$000's unless otherwise stated.

2015

2016

2017

Sales Revenue Cost of Sales Gross Profit

$102,007 ($39,023) $62,984

$118,086 ($48,004) $70,082

$131,345 ($49,123) $82,222

SG&A Expense Depreciation Expense Interest Expense Income Before Income Taxes Income Taxes Net Income

($37,390) ($19,500) ($2,500) $3,594 ($1,120) $2,474

($32,783) ($18,150) ($2,500) $16,649 ($4,858) $11,791

($33,959) ($17,205) ($1,500) $29,558 ($8,483) $21,075

Assets Cash & Cash Equivalents Accounts Receivable Inventories Total Current Assets

$167,971 $5,100 $7,805 $180,876

$181,210 $5,904 $9,601 $196,715

$183,715 $6,567 $9,825 $200,107

Property, Plant & Equipment Total Assets

$45,500 $226,376

$42,350 $239,065

$40,145 $240,252

$3,902 $3,902

$4,800 $4,800

$4,912 $4,912

$50,000 $53,902

$50,000 $54,800

$30,000 $34,912

$170,000 $2,474 $172,474 $226,376

$170,000 $14,265 $184,265 $239,065

$170,000 $35,340 $205,340 $240,252

Income Statement

Balance Sheet

Liabilities Accounts Payable Total Current Liabilities Long-Term Debt Total Liabilities Shareholders' Equity Share Capital Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity

Cash Flow Statement

Operating Activities Net Income Adjustments For: Depreciation Expense Changes in Non-Cash Working Capital Cash Generated From Operating Activities

$2,474

$11,791

$21,075

$19,500 ($9,003) $12,971

$18,150 ($1,702) $28,239

$17,205 ($775) $37,505

Investing Activities Additions to Property, Plant & Equipment Cash (Used For) Investing Activities

($15,000) ($15,000)

($15,000) ($15,000)

($15,000) ($15,000)

Financing Activities Issuance (Repayment) of Debt Issuance (Buy-back) of Equity Cash (Used For) Generated From Financing Activities

$0 $170,000 $170,000

$0 $0 $0

($20,000) $0 ($20,000)

Cash (Used) Generated in the Period Cash & Cash Equivalents, Beginning of Period Cash & Cash Equivalents, End of Period

$167,971 $0 $167,971

$13,239 $167,971 $181,210

$2,505 $181,210 $183,715

$5,100 $7,805 $3,902 $9,003

$5,904 $9,601 $4,800 $10,705 ($1,702)

$6,567 $9,825 $4,912 $11,480 ($775)

$50,000 $15,000 ($19,500) $45,500

$45,500 $15,000 ($18,150) $42,350

$42,350 $15,000 ($17,205) $40,145

$50,000 $0 $50,000 $2,500

$50,000 $0 $50,000 $2,500

$50,000 ($20,000) $30,000 $1,500

$0 $170,000 $170,000

$170,000 $0 $170,000

$170,000 $0 $170,000

Supporting Schedules Change in Non-Cash Working Capital Accounts Receivable Inventories Accounts Payable Total Working Capital Change in Non-Cash Working Capital Asset Continuity Schedule PP&E, Opening Balance Capital Expenditures Depreciation Expense PP&E, Ending Balance Debt Schedule Total Debt, Opening Balance Issuance (Repayment) Total Debt, Ending Balance Interest Expense Share Capital Schedule Share Capital, Opening Balance Share Issuance (Buy-Back)) Share Capital, Ending Balance

2018

2019

$142,341 ($53,254) $89,087

$150,772 ($57,310) $93,462

($34,022) ($16,544) ($900) $37,622 ($10,908) $26,713

($36,657) ($16,080) ($900) $39,825 ($11,598) $28,227

$211,069 $7,117 $10,531 $228,717

$239,550 $7,539 $11,342 $258,430

$38,602 $267,319

$37,521 $295,951

$5,265 $5,265

$5,671 $5,671

$30,000 $35,265

$30,000 $35,671

$170,000 $62,053 $232,053 $267,319

$170,000 $90,280 $260,280 $295,951

2020E

2021E

2022E

2023E

2024E

$26,713

$28,227

$16,544 ($903) $42,354

$16,080 ($827) $43,480

($15,000) ($15,000)

($15,000) ($15,000)

$0 $0 $0

$0 $0 $0

$27,354 $183,715 $211,069

$28,480 $211,069 $239,550

$7,117 $10,531 $5,265 $12,382 ($903)

$7,539 $11,342 $5,671 $13,210 ($827)

$40,145 $15,000 ($16,544) $38,602

$38,602 $15,000 ($16,080) $37,521

$30,000 $0 $30,000 $900

$30,000 $0 $30,000 $900

$170,000 $0 $170,000

$170,000 $0 $170,000

© Corporate Finance Institute. All rights reserved.

Forecast Scenarios

All Figures in US$000's unless otherwise stated.

2020E

2021E

2022E

38.0% 24.0%

38.0% 24.0%

38.0% 24.0%

Depreciation Expense (On Existing Assets) Depreciation Expense (On New Additions) Total Depreciation Expense

$7,500

$7,500

$7,500

$7,500

$7,500

$7,500

Interest Rate Effective Tax Rate

4.0% 30.0%

4.0% 30.0%

4.0% 30.0%

18 70

18 70

18 70

Live Case Income Statement Assumptions Annual Sales Growth Cost of Sales (% of Sales) SG&A Expense (% of Sales) Depreciation Expense (On Existing Assets) Depreciation Expense (On New Additions) Total Depreciation Expense Interest Rate Effective Tax Rate Balance Sheet Assumptions Accounts Receivable (Days) Inventory (Days) Accounts Payable (Days) Capital Expenditures Debt Issuance (Repayment) Equity Issued (Repaid)

Scenario Inputs Base Case Income Statement Assumptions Annual Sales Growth (%) Cost of Sales (% of Sales) SG&A Expense (% of Sales)

Balance Sheet Assumptions Accounts Receivable (Days) Inventory (Days)

Accounts Payable (Days) Capital Expenditures Debt Issuance (Repayment) Equity Issued (Repaid)

35 $20,000 $0 $0

35 $20,000 ($20,000) $0

35 $20,000 $0 $0

5.0% 45.0% 30.0%

5.0% 45.0% 30.0%

5.0% 45.0% 30.0%

$7,500 $3,000 $10,500

$7,500 $3,000 $10,500

$7,500 $3,000 $10,500

4.0% 30.0%

4.0% 30.0%

4.0% 30.0%

20 80 40 $15,000 $0 $0

20 80 40 $15,000 $0 $0

20 80 40 $15,000 $0 $0

11.0% 30.0% 20.0%

11.0% 30.0% 20.0%

11.0% 30.0% 20.0%

$7,500 $7,000 $14,500

$7,500 $7,000 $14,500

$7,500 $7,000 $14,500

4.0% 30.0%

4.0% 30.0%

4.0% 30.0%

15 65 30 $30,000 $0 $0

15 65 30 $30,000 ($20,000) ($50,000)

15 65 30 $30,000 $0 $0

Low Case Income Statement Assumptions Annual Sales Growth Cost of Sales (% of Sales) SG&A Expense (% of Sales) Depreciation Expense (On Existing Assets) Depreciation Expense (On New Additions) Total Depreciation Expense Interest Rate Effective Tax Rate Balance Sheet Assumptions Accounts Receivable (Days) Inventory (Days) Accounts Payable (Days) Capital Expenditures Debt Issuance (Repayment) Equity Issued (Repaid)

High Case Income Statement Assumptions Annual Sales Growth Cost of Sales (% of Sales) SG&A Expense (% of Sales) Depreciation Expense (On Existing Assets) Depreciation Expense (On New Additions) Total Depreciation Expense Interest Rate Effective Tax Rate Balance Sheet Assumptions Accounts Receivable (Days) Inventory (Days) Accounts Payable (Days) Capital Expenditures Debt Issuance (Repayment) Equity Issued (Repaid)

2023E

2024E

38.0% 24.0%

38.0% 24.0%

$7,500

$7,500

$7,500

$7,500

4.0% 30.0%

4.0% 30.0%

18 70

18 70

35 $20,000 ($10,000) $0

35 $20,000 $0 $0

5.0% 45.0% 30.0%

5.0% 45.0% 30.0%

$7,500 $3,000 $10,500

$7,500 $3,000 $10,500

4.0% 30.0%

4.0% 30.0%

20 80 40 $15,000 $0 $0

20 80 40 $15,000 $0 $0

11.0% 30.0% 20.0%

11.0% 30.0% 20.0%

$7,500 $7,000 $14,500

$7,500 $7,000 $14,500

4.0% 30.0%

4.0% 30.0%

15 65 30 $30,000 ($10,000) $0

15 65 30 $30,000 $0 $0