Calculate the current ratio and debt to equity ratio

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Reference no: EM133878824

Homework: Financial Model Development for e-Travel Guide Company

Objective:

You are required to build a financial model in Excel for the e-Travel Guide company. Your model should be dynamic and responsive to changes in key parameters, such as the growth rate. A detailed report explaining the model and its results must be submitted in Word.

Instructions:

I. Excel Model Development:

A. Create a financial model for the e-Travel Guide company in Excel.

B. Include all relevant formulas, ensuring the model automatically updates when parameters like the growth rate are modified.

C. Assume a pessimistic growth rate of 1% per month for the company.

D. Your model should include the following financial statements for the first three years:

a. P&L statement
b. Cash Flow Statement
c. Balance Sheet

E. Note: When the growth rate changes, both variable expenses and, in some cases, fixed expenses will also change. Make sure your model reflects these adjustments. Get the instant assignment help.

II. Break-Even Analysis:

A. Calculate and report the break-even point under the conditions of the 1% growth rate assumption.

III. Current Ration, Debt to Equity Ratio, ROI & ROE Calculation:

A. Calculate the Return on Investment (ROI) and Return on Equity (ROE) for the three-year period.

B. Calculate the current ratio and debt to equity ratio.

IV. Word Report:

A. Write a report in Word that explains your Excel model, including the methodology, assumptions, and findings.

B. The report should include a discussion of:

a. Key financial insights from the cash flow and balance sheet projections.
b. The calculated break-even point.
c. Financial results and their implications for the business.

Reference no: EM133878824

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