Simple Example General Store

Period:

1. Start of
3. Bubba
4. The
5.
Store / Basic 2. Sale to
Pays
accountants Multiple
Structure
Bubba
Early
show up
Activities
Income Statement
Revenue
Cost of Goods Sold (COGS)
Gross Profit

6
6.
Modeling
the Hard
Codes

7. Adding
interest

8. Filling
Across the
simple model

0
0
0

500
375
125

0
0

0
0

500
375
125

550
413
138

605
454
151

666
499
166

732
549
183

805
604
201

886
664
221

974
731
244

1,072
804
268

Selling, General, & Adminstrative (SG&A) Expenses

Depreciation of Overheads
Total SG&A

0
0
0

75
0
75

0
0
0

0
8
8

75
8
83

83
8
91

91
8
99

100
8
108

110
8
118

121
8
129

133
8
141

146
8
154

161
8
169

Operating Profit

50

(8)

42

47

52

58

65

72

80

89

99

Interest (Expense)
Interest Income

0
0

0
0

0
0

0
0

0
0

0
0

(33)
6

(32)
6

(31)
5

(31)
5

(30)
5

(30)
4

(29)
4

Earnings / Profit Before Tax (EBT)

Taxes

0
0

50
18

0
0

(8)
(3)

42
15

47
16

26
9

32
11

39
14

47
16

55
19

64
22

74
26

Net Income

33

(5)

27

30

17

21

25

30

36

42

48

Balance Sheet
Cash
Accounts Receivable (A/R)
Inventory
Current Assets
Property, Plant, and Equipment
Accumulated Depreciation
Property, Plant, and Equipment, Net

0
0
10,000
10,000

(93)
500
9,625
10,033

408
0
9,625
10,033

410
0
9,625
10,035

571
250
9,550
10,371

7,427
362
2,441
10,230

7,109
398
2,685
10,192

6,769
438
2,954
10,160

6,404
481
3,249
10,135

6,014
529
3,574
10,117

5,594
582
3,931
10,108

5,142
641
4,325
10,107

4,654
705
4,757
10,116

500
0
500

500
0
500

500
0
500

500
8
492

500
17
483

500
25
475

500
33
467

500
42
458

500
50
450

500
58
442

500
67
433

500
75
425

500
83
417

10,500

10,533

10,533

10,527

10,854

10,705

10,658

10,618

10,585

10,559

10,541

10,532

10,532

0
0
0

0
0
0

0
0
0

0
0
0

300
0
300

203
0
203

224
0
224

246
0
246

271
0
271

298
0
298

328
0
328

360
0
360

396
0
396

Debt and Long Term Liabilities

5,000

5,000

5,000

5,000

5,000

4,917

4,833

4,750

4,667

4,583

4,500

4,417

4,333

Total Liabilities

5,000

5,000

5,000

5,000

5,300

5,120

5,057

4,996

4,937

4,881

4,828

4,777

4,730

Shareholder's Equity
Retained Earnings
Total Equity

5,500
0
5,500

5,500
33
5,533

5,500
33
5,533

5,500
27
5,527

5,500
54
5,554

5,500
85
5,585

5,500
101
5,601

5,500
122
5,622

5,500
147
5,647

5,500
178
5,678

5,500
213
5,713

5,500
255
5,755

5,500
303
5,803

10,500

10,533

10,533

10,527

10,854

10,705

10,658

10,618

10,585

10,559

10,541

10,532

10,532

0
0

33
0

0
0

(5)
8

27
8

30
8

17
8

21
8

25
8

30
8

36
8

42
8

48
8

500
0
0
0
500

0
0
0
0
3

(250)
75
300
0
160

(36)
(244)
20
0
(235)

(40)
(269)
22
0
(257)

(44)
(295)
25
0
(281)

(48)
(325)
27
0
(307)

(53)
(357)
30
0
(337)

(58)
(393)
33
0
(369)

(64)
(432)
36
0
(404)

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0
0

0
0
0

0
0
0

0
0
0

(83)
0
(83)

(83)
0
(83)

(83)
0
(83)

(83)
0
(83)

(83)
0
(83)

(83)
0
(83)

(83)
0
(83)

(83)
0
(83)

160

6,856

(318)

(340)

(364)

(391)

(420)

(452)

(488)

408
410

410
571

571
7,427

Total Assets
Accounts Payable (A/P)
Other
Current Liabilities

Total Liabilities and Equity

Cash Flow
Operating Cash Flow:
Net Income
Depreciation
Changes in working capital
Accounts Receivable
Inventory
Accounts Payable
Other
Total Operating Cash Flow
Investing Cash Flow:
Purchases of PP&E (Capital Expenditures)
Total Investing Cash Flow
Financing Cash Flow:
(Payments To) / Borrowings From Bank
Sale of Stock
Total Financing Cash Flow

0
(10,000)
0
0
(10,000)

(500)
375
0
0
(93)

(500)
(500)

5,000
5,500
10,500

Net Cash Flow

(93)

500

Cash Beginning of Period

Cash End of Period

0
0

0
(93)

(93)
408

Inputs:
Growth Rate
Gross Margin
SG&A as a % of revenue
Tax Rate
Depreciable life

10%
25%
15%
35%
5 years

Working Capital
A/R
A/P
Inventory

20 Days Sales Outstanding

15 Days Cost Outstanding
180 Days Sales Outstanding

Debt Amoritzation
Interest Rate on Debt
Interest Earnings on Cash

5 years
8%
1%

(112)
7,109
(97)
0
6,939

7,427
7,109

7,109
6,769

6,769
6,404

6,404
6,014

6,014
5,594

5,594
5,142

5,142
4,654

Simple Example General Store

Period:

1. Start of
3. Bubba
4. The
5.
Store / Basic 2. Sale to
Pays
accountants Multiple
Structure
Bubba
Early
show up
Activities
Income Statement
Revenue
Cost of Goods Sold (COGS)
Gross Profit

6
6.
Modeling
the Hard
Codes

7. Adding
interest

8. Filling
Across the
simple model

0
0
0

500
375
125

0
0

0
0

500
375
125

550
413
138

605
454
151

666
499
166

732
549
183

805
604
201

886
664
221

974
731
244

1,072
804
268

Selling, General, & Adminstrative (SG&A) Expenses

Depreciation of Overheads
Total SG&A

0
0
0

75
0
75

0
0
0

0
8
8

75
8
83

83
8
91

91
8
99

100
8
108

110
8
118

121
8
129

133
8
141

146
8
154

161
8
169

Operating Profit

50

(8)

42

47

52

58

65

72

80

89

99

Interest (Expense)
Interest Income

0
0

0
0

0
0

0
0

0
0

0
0

(20)
8

(19)
8

(19)
8

(19)
8

(19)
8

(18)
8

(18)
8

Earnings / Profit Before Tax (EBT)

Taxes

0
0

50
18

0
0

(8)
(3)

42
15

47
16

41
14

47
17

54
19

62
22

70
24

79
28

89
31

Net Income

33

(5)

27

30

27

31

35

40

45

51

58

Balance Sheet
Cash
Accounts Receivable (A/R)
Inventory
Current Assets
Property, Plant, and Equipment
Accumulated Depreciation
Property, Plant, and Equipment, Net

0
0
10,000
10,000

(93)
500
9,625
10,033

408
0
9,625
10,033

410
0
9,625
10,035

571
250
9,550
10,371

10,051
90
407
10,548

10,048
99
448
10,595

10,049
109
492
10,651

10,054
120
542
10,716

10,064
132
596
10,792

10,078
146
655
10,879

10,099
160
721
10,980

10,125
176
793
11,094

500
0
500

500
0
500

500
0
500

500
8
492

500
17
483

500
25
475

500
33
467

500
42
458

500
50
450

500
58
442

500
67
433

500
75
425

500
83
417

10,500

10,533

10,533

10,527

10,854

11,023

11,062

11,109

11,166

11,233

11,313

11,405

11,511

0
0
0

0
0
0

0
0
0

0
0
0

300
0
300

475
0
475

522
0
522

574
0
574

632
0
632

695
0
695

764
0
764

841
0
841

925
0
925

Debt and Long Term Liabilities

3,000

3,000

3,000

3,000

3,000

2,964

2,929

2,893

2,857

2,821

2,786

2,750

2,714

Total Liabilities

3,000

3,000

3,000

3,000

3,300

3,439

3,451

3,467

3,489

3,516

3,550

3,591

3,639

Shareholder's Equity
Retained Earnings
Total Equity

7,500
0
7,500

7,500
33
7,533

7,500
33
7,533

7,500
27
7,527

7,500
54
7,554

7,500
85
7,585

7,500
111
7,611

7,500
142
7,642

7,500
177
7,677

7,500
217
7,717

7,500
262
7,762

7,500
314
7,814

7,500
372
7,872

10,500

10,533

10,533

10,527

10,854

11,023

11,062

11,109

11,166

11,233

11,313

11,405

11,511

0
0

33
0

0
0

(5)
8

27
8

30
8

27
8

31
8

35
8

40
8

45
8

51
8

58
8

500
0
0
0
500

0
0
0
0
3

(250)
75
300
0
160

(9)
(41)
47
0
33

(10)
(45)
52
0
37

(11)
(49)
57
0
41

(12)
(54)
63
0
45

(13)
(60)
69
0
50

(15)
(66)
76
0
56

(16)
(72)
84
0
62

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
0
0

0
0
0

0
0
0

0
0
0

(36)
0
(36)

(36)
0
(36)

(36)
0
(36)

(36)
0
(36)

(36)
0
(36)

(36)
0
(36)

(36)
0
(36)

(36)
0
(36)

160

9,480

(3)

10

15

20

27

408
410

410
571

571
10,051

10,048
10,049

10,049
10,054

10,054
10,064

10,064
10,078

10,078
10,099

10,099
10,125

Total Assets
Accounts Payable (A/P)
Other
Current Liabilities

Total Liabilities and Equity

Cash Flow
Operating Cash Flow:
Net Income
Depreciation
Changes in working capital
Accounts Receivable
Inventory
Accounts Payable
Other
Total Operating Cash Flow
Investing Cash Flow:
Purchases of PP&E (Capital Expenditures)
Total Investing Cash Flow
Financing Cash Flow:
(Payments To) / Borrowings From Bank
Sale of Stock
Total Financing Cash Flow

0
(10,000)
0
0
(10,000)

(500)
375
0
0
(93)

(500)
(500)

3,000
7,500
10,500

Net Cash Flow

(93)

500

Cash Beginning of Period

Cash End of Period

0
0

0
(93)

(93)
408

Inputs:
Growth Rate
Gross Margin
SG&A as a % of revenue
Tax Rate

10%
25%
15%
35%

Depreciable life

5 years

Working Capital
A/R
A/P
Inventory

5 Days Sales Outstanding

35 Days Cost Outstanding
30 Days Sales Outstanding

Debt Amoritzation
Interest Rate on Debt
Interest Earnings on Cash

7 years
8%
1%

160
9,143
175
0
9,516

10,051
10,048