Cash flow statement forecast

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<p>CASH FLOW</p><p>STATEMENT</p><p>FORECAST</p><p>BojanFin.com</p><p>STEP-BY-STEP GUIDE</p><p>BY BOJAN RADOJICIC</p><p>9 steps simplified</p><p>STEP 1:</p><p>Build forecast of the</p><p>income statement</p><p>BojanFin.com</p><p>INCOME STATEMENT</p><p>INCOME STATEMENT Last year Actual Year 1 Year 2 Year 3 Year 4 Year 5 Driver / Link Applied value</p><p>Electronic devices 5.000 5.500 6.160 6.899 7.727 8.654 9.693 Est imated growth rate 12,0%</p><p>Software 3.000 3.300 3.597 3.921 4.274 4.658 5.077 Est imated growth rate 9,0%</p><p>Services and support 2.000 2.200 2.486 2.809 3.174 3.587 4.053 Est imated growth rate 13,0%</p><p>Total revenues 10.000 11.000 12.243 13.629 15.175 16.900 18.824</p><p>COGS 6.200 6.800 7.468 8.314 9.257 10.309 11.482 Revenue - Gross profit</p><p>Gross profit 3.800 4.200 4.775 5.315 5.918 6.591 7.341 Gross margin 39,0%</p><p>Wages and personal expenses 750 830 857 954 1.062 1.183 1.318 Percentage of Revenue 7,0%</p><p>Sales and market ing 610 630 735 818 911 1.014 1.129 Percentage of Revenue 6,0%</p><p>Rent 250 260 270 281 292 304 316 Est imated growth rate 4,0%</p><p>Maintenance and repairs 190 210 245 273 304 338 376 Percentage of Revenue 2,0%</p><p>Off ice supplies and utilities 140 150 159 169 179 189 201 Est imated growth rate 6,0%</p><p>Operating expenes 2.250 2.430 2.680 2.955 3.261 3.600 3.977</p><p>Operating profit 1.550 1.770 2.095 2.360 2.658 2.991 3.364</p><p>Interest expenses 50 60 69 76 85 95 105 Percentage of total debt 8,0%</p><p>Other financial income or expensess, net 10 11 12 14 15 17 19 Percentage of Revenue 0,1%</p><p>Income before tax 1.490 1.699 2.014 2.270 2.558 2.879 3.240</p><p>Income tax 300 309 322 363 409 461 518 Effective tax rate 16,0%</p><p>Net inocme 1.190 1.390 1.692 1.907 2.148 2.419 2.721</p><p>First, you need to have income statement projection. Draft your IS layout.</p><p>Determine drivers for forecasting for each line of revenues and expenses</p><p>STEP 2:</p><p>Build forecast of the</p><p>balance sheet</p><p>BojanFin.com</p><p>BALANCE SHEET</p><p>First, you need to make a schedules for working capital, CAPEX and Debt.</p><p>After you create that, transfer the balances to the balance sheet!</p><p>Don’t forget to establish a check row to see if you assets is equal to the equity and</p><p>liabilities.</p><p>BALANCE SHEET Last year Actual Year 1 Year 2 Year 3 Year 4 Year 5</p><p>Cash 175 1.310 2.464 4.084 5.869 7.921 10.232 Link to CF statement</p><p>Account Receivables 450 500 604 672 790 880 980 NWC Schedule</p><p>Inventories 300 450 491 547 609 678 755 NWC Schedule</p><p>Current assets 925 2.260 3.559 5.303 7.267 9.479 11.967</p><p>Property, pland and equipment 500 750 1.020 1.136 1.265 1.408 1.569 CAPEX Schedule</p><p>Non-current assets 500 750 1.020 1.136 1.265 1.408 1.569</p><p>Total assets 1.425 3.010 4.579 6.439 8.532 10.887 13.535</p><p>Trade Payables 225 500 409 456 507 565 629 NWC Schedule</p><p>Short term debt 200 200 245 273 304 338 376 Debt Schedule</p><p>Current liabilities 425 700 654 728 811 903 1.006</p><p>Long term debt 500 520 612 681 759 845 941 Debt Schedule</p><p>Long term liabilities 500 520 612 681 759 845 941</p><p>Common stock and other capital 200 200 200 200 200 200 200</p><p>Retained earnings 300 1.590 3.113 4.829 6.763 8.939 11.389</p><p>Equity 500 1.790 3.313 5.029 6.963 9.139 11.589</p><p>Total Equity and liabilities 1.425 3.010 4.579 6.439 8.532 10.887 13.535</p><p>As we need cash flow forecast, leave cash position as blank!!!!!</p><p>STEP 3:</p><p>Draft Cash Flow</p><p>Statement</p><p>BojanFin.com</p><p>CASH FLOW STATEMENT - BLANK</p><p>Create a lines of your cash flow statement.</p><p>Input historical data</p><p>CASH FLOW STATEMENT Last year Actual Year 1 Year 2 Year 3 Year 4 Year 5</p><p>Net income 1.190 1.390</p><p>Depreciation and amortization 110 130</p><p>(Incerease) or decrease in account receivables - 260 - 50</p><p>(Incerease) or decrease in inventories - 315 - 150</p><p>Increase (decrease) in trade payables 150 275</p><p>CF from operating activities 875 1.595</p><p>Acquisition of property, plant and equipment - 450 - 380</p><p>CF from investing activities - 450 - 380</p><p>Increase (decrease) in financial liabilities 100 20</p><p>Dividends paid - 400 - 100</p><p>CF from financing activities - 300 - 80</p><p>Total cash flow 125 1.135</p><p>Cash at the beginning of period 50 175</p><p>Cash at the end of period 175 1.310</p><p>?</p><p>STEP 4:</p><p>Transfer net income</p><p>BojanFin.com</p><p>CASH FLOW STATEMENT Last year Actual Year 1 Year 2 Year 3 Year 4 Year 5</p><p>Net income 1.190 1.390 1.692 1.907 2.148 2.419 2.721</p><p>Depreciation and amortization 110 130</p><p>(Incerease) or decrease in account receivables - 260 - 50</p><p>(Incerease) or decrease in inventories - 315 - 150</p><p>Increase (decrease) in trade payables 150 275</p><p>CF from operating activities 875 1.595</p><p>Acquisition of property, plant and equipment - 450 - 380</p><p>CF from investing activities - 450 - 380</p><p>Increase (decrease) in financial liabilities 100 20</p><p>Dividends paid - 400 - 100</p><p>CF from financing activities - 300 - 80</p><p>Total cash flow 125 1.135</p><p>Cash at the beginning of period 50 175</p><p>Cash at the end of period 175 1.310</p><p>CASH FLOW STATEMENT - BLANK</p><p>Transfer projected net income from the income statement</p><p>STEP 5:</p><p>Transfer depreciation and</p><p>amortization</p><p>BojanFin.com</p><p>CASH FLOW STATEMENT</p><p>Transfer projected depreciation and amortization form the CAPEX schedule or from</p><p>income statement</p><p>IF you have some other non-cash expenses like impairments of assets, list them also</p><p>here as added back items.</p><p>CASH FLOW STATEMENT Last year Actual Year 1 Year 2 Year 3 Year 4 Year 5</p><p>Net income 1.190 1.390 1.692 1.907 2.148 2.419 2.721</p><p>Depreciation and amortization 110 130 145 161 179 200 222</p><p>(Incerease) or decrease in account receivables - 260 - 50</p><p>(Incerease) or decrease in inventories - 315 - 150</p><p>Increase (decrease) in trade payables 150 275</p><p>CF from operating activities 875 1.595</p><p>Acquisition of property, plant and equipment - 450 - 380</p><p>CF from investing activities - 450 - 380</p><p>Increase (decrease) in financial liabilities 100 20</p><p>Dividends paid - 400 - 100</p><p>CF from financing activities - 300 - 80</p><p>Total cash flow 125 1.135</p><p>Cash at the beginning of period 50 175</p><p>Cash at the end of period 175 1.310</p><p>STEP 6:</p><p>Import changes in current</p><p>assets and liabilities</p><p>BojanFin.com</p><p>CASH FLOW STATEMENT</p><p>Transfer projected net net working capital items. Any change of current assets and</p><p>liabilities affect cash flow.</p><p>Calculate Cash flow from operating activities.</p><p>CASH FLOW STATEMENT Last year Actual Year 1 Year 2 Year 3 Year 4 Year 5</p><p>Net income 1.190 1.390 1.692 1.907 2.148 2.419 2.721</p><p>Depreciation and amortization 110 130 145 161 179 200 222</p><p>(Incerease) or decrease in account receivables - 260 - 50 - 104 - 68 - 118 - 90 - 100</p><p>(Incerease) or decrease in inventories - 315 - 150 - 41 - 56 - 62 - 69 - 77</p><p>Increase (decrease) in trade payables 150 275 - 91 46 52 58 64</p><p>CF from operating activities 875 1.595 1.601 1.991 2.200 2.517 2.831</p><p>Acquisition of property, plant and equipment - 450 - 380</p><p>CF from investing activities - 450 - 380</p><p>Increase (decrease) in financial liabilities 100 20</p><p>Dividends paid - 400 - 100</p><p>CF from financing activities - 300 - 80</p><p>Total cash flow 125 1.135</p><p>Cash at the beginning of period 50 175</p><p>Cash at the end of period 175 1.310</p><p>STEP 7:</p><p>Import investing cash</p><p>flows</p><p>BojanFin.com</p><p>CASH FLOW STATEMENT</p><p>Go to capex schedule and transfer the net amount of acquisition of property, plant,</p><p>equipment and intangibles.</p><p>CASH FLOW STATEMENT Last year Actual Year 1 Year 2 Year 3 Year 4 Year 5</p><p>Net income 1.190 1.390 1.692 1.907 2.148 2.419 2.721</p><p>Depreciation and amortization 110 130 145 161 179 200 222</p><p>(Incerease) or decrease in account receivables - 260 - 50 - 104 - 68 - 118</p><p>- 90 - 100</p><p>(Incerease) or decrease in inventories - 315 - 150 - 41 - 56 - 62 - 69 - 77</p><p>Increase (decrease) in trade payables 150 275 - 91 46 52 58 64</p><p>CF from operating activities 875 1.595 1.601 1.991 2.200 2.517 2.831</p><p>Acquisition of property, plant and equipment - 450 - 380 - 415 - 277 - 308 - 343 - 383</p><p>CF from investing activities - 450 - 380 - 415 - 277 - 308 - 343 - 383</p><p>Increase (decrease) in financial liabilities 100 20</p><p>Dividends paid - 400 - 100</p><p>CF from financing activities - 300 - 80</p><p>Total cash flow 125 1.135</p><p>Cash at the beginning of period 50 175</p><p>Cash at the end of period 175 1.310</p><p>STEP 8:</p><p>Import financing cash</p><p>flows</p><p>BojanFin.com</p><p>CASH FLOW STATEMENT</p><p>Go to debt schedule and transfer the amounts of change in financial liabilities and</p><p>dividends to be paid out.</p><p>CASH FLOW STATEMENT Last year Actual Year 1 Year 2 Year 3 Year 4 Year 5</p><p>Net income 1.190 1.390 1.692 1.907 2.148 2.419 2.721</p><p>Depreciation and amortization 110 130 145 161 179 200 222</p><p>(Incerease) or decrease in account receivables - 260 - 50 - 104 - 68 - 118 - 90 - 100</p><p>(Incerease) or decrease in inventories - 315 - 150 - 41 - 56 - 62 - 69 - 77</p><p>Increase (decrease) in trade payables 150 275 - 91 46 52 58 64</p><p>CF from operating activities 875 1.595 1.601 1.991 2.200 2.517 2.831</p><p>Acquisition of property, plant and equipment - 450 - 380 - 415 - 277 - 308 - 343 - 383</p><p>CF from investing activities - 450 - 380 - 415 - 277 - 308 - 343 - 383</p><p>Increase (decrease) in financial liabilities 100 20 137 97 108 121 135</p><p>Dividends paid - 400 - 100 - 169 - 191 - 215 - 242 - 272</p><p>CF from financing activities - 300 - 80 - 32 - 94 - 107 - 121 - 137</p><p>Total cash flow 125 1.135</p><p>Cash at the beginning of period 50 175</p><p>Cash at the end of period 175 1.310</p><p>STEP 9:</p><p>Sum up</p><p>BojanFin.com</p><p>CASH FLOW STATEMENT</p><p>Calculate total cash flow in separate row</p><p>Add cash at the beginning period as ended cash from previous period</p><p>Calculate final cash position</p><p>When do this, transfer the cash to the balance sheet.</p><p>CASH FLOW STATEMENT Last year Actual Year 1 Year 2 Year 3 Year 4 Year 5</p><p>Net income 1.190 1.390 1.692 1.907 2.148 2.419 2.721</p><p>Depreciation and amortization 110 130 145 161 179 200 222</p><p>(Incerease) or decrease in account receivables - 260 - 50 - 104 - 68 - 118 - 90 - 100</p><p>(Incerease) or decrease in inventories - 315 - 150 - 41 - 56 - 62 - 69 - 77</p><p>Increase (decrease) in trade payables 150 275 - 91 46 52 58 64</p><p>CF from operating activities 875 1.595 1.601 1.991 2.200 2.517 2.831</p><p>Acquisition of property, plant and equipment - 450 - 380 - 415 - 277 - 308 - 343 - 383</p><p>CF from investing activities - 450 - 380 - 415 - 277 - 308 - 343 - 383</p><p>Increase (decrease) in financial liabilities 100 20 137 97 108 121 135</p><p>Dividends paid - 400 - 100 - 169 - 191 - 215 - 242 - 272</p><p>CF from financing activities - 300 - 80 - 32 - 94 - 107 - 121 - 137</p><p>Total cash flow 125 1.135 1.154 1.620 1.785 2.052 2.311</p><p>Cash at the beginning of period 50 175 1.310 2.464 4.084 5.869 7.921</p><p>Cash at the end of period 175 1.310 2.464 4.084 5.869 7.921 10.232</p><p>BojanFin.com</p><p>Slide 1</p><p>Slide 2</p><p>Slide 3</p><p>Slide 4</p><p>Slide 5</p><p>Slide 6</p><p>Slide 7</p><p>Slide 8</p><p>Slide 9</p><p>Slide 10</p><p>Slide 11</p>