Reference no: EM133985052
Overview
In this assignment, you are required to populate the forecasting assumptions for the period 2025-2029 in the Assumptions sheet of the provided Excel workbook. Specifically, you must enter values in columns I (for constants) and N through R (years 2025 to 2029) starting from row 73.
The Assumptions sheet should then drive the entire financial model - your inputs will flow automatically into the revenue forecasts, cost schedules, working capital calculations, tax computations, debt service, and equity across the interconnected model sheets. It is essential that all assumptions are entered accurately and in the correct format.
Once the assumptions and schedules are complete, you will then need to build the three-way financial forecast. This requires constructing the Income Statement, Balance Sheet, and Cash Flow Statement so that all three are correctly linked and balanced - meaning net income flows into retained earnings, the cash flow statement reconciles to the closing cash balance on the Balance Sheet, and the Balance Sheet itself balances.
The provided template may be modified as required. It is intended as guidance only and reflects one of several valid approaches to structuring and calculating the supporting schedules - you are free to adapt it to suit your own methodology.
Step 1: Forecasting Assumptions
Populate all forecasting assumptions for the period 2025-2029 in the Assumptions sheet. The following tables show the values you must enter for each assumption across the five forecast years. Enter these values exactly as shown. Get AI-free online assignment help by the best tutors.
Step 2: Supporting Schedules
Build the following supporting schedules, ensuring each one is correctly linked to the relevant assumptions and to the financial statements:
Revenue
Costs
Depreciation
Taxes
Working Capital
Debt and Interest
Equity
Step 3: Financial Statements
Construct the three-way financial forecast - Income Statement, Balance Sheet, and Cash Flow Statement. Ensure that:
The statements are properly linked (net income flows into retained earnings, the cash flow statement reconciles to the closing cash balance on the Balance Sheet).
Best practice financial modelling conventions are followed throughout.
The Balance Sheet balances for all forecast years (Total Assets = Total Liabilities + Equity).
Step 4: Scenarios and Report
Prepare the Scenarios sheet with key financial information drawn from your completed model and allow the user to select the different scenarios (Base, Best, Worst). In addition, write a short report of your main findings (maximum 2,000 characters) summarising the key drivers of performance across the three scenarios and any material observations from your forecast.