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ASSIGNMENT INSTRUCTIONS:
EXCEL PROJECT: PROJECTING FINANCIAL STATEMENTS ASSIGNMENT INSTRUCTIONS
OVERVIEW
Common Sized Balance Sheets (Tabs 12), Common Sized Income Statements (Tab 13), Horizontal Analysis Balance Sheets (Tab 14), Horizontal Analysis Income Statements (Tab 15), and Projected Financial Statements (Tabs 16-18)
INSTRUCTIONS
Continue in the same Excel workbook prepared in Module 4: Week 4, adding the following tabs:
o The 12th tab in your Financial Statement Analysis Template must be labeled Common Sized Balance Sheets.
Set up like the Historical Balance Sheets (Tab 3), this worksheet should use formulas to calculate the common-sized percentages, linking to the Historical Balance Sheets for the calculations. “Total Assets” should be used as the base for all common-sized calculations on the Balance Sheets. Common-sized percentages should be calculated for all three historical years presented.
See Exhibit A for a partial example of this tab.
o The 13th tab in your Financial Statement Analysis Template must be labeled Common Sized Income Statements.
Set up like the Historical Income Statements (Tab 2), this worksheet should use formulas to calculate the common-sized percentages, linking to the Historical Income Statements for the calculations. “Revenue” or “Total Revenue” (depending on your company) should be used as the base for all common-sized calculations on the Income Statements. Common-sized percentages should be calculated for all three historical years presented.
o The 14th tab in your Financial Statement Analysis Template must be labeled Horizontal Analysis of Balance Sheets.
Start by copying and pasting the Historical Balance Sheets from Tab 3 to this worksheet. Then, add dollar and percentage change columns between each of the sets of historical years.
See Exhibit B for an example of this tab.
o The 15th tab in your Financial Statement Analysis Template must be labeled Horizontal Analysis of Income Statements.
Start by copying and pasting the Historical Income Statements from Tab 2 to this worksheet. Then, add dollar and percentage change columns between each of the set of historical years.
o The 16th tab in your Financial Statement Analysis Template must be labeled Projected Income Statements. Three years of projected statements should be included, starting with the most recent year after the company’s last issued report.
o The 17th tab in your Financial Statement Analysis Template must be labeled Projected Balance Sheets. Three years of projected statements should be included. Three years of projected statements should be included, starting with the most recent year after the company’s last issued report.
o The 18th tab in your Financial Statement Analysis Template must be labeled Projected Statement of Cash Flows. Three years of projected statements should be included, starting with the most recent year after the company’s last issued report.
Other information relating to projected tabs:
Projections should be based on research performed on your company and its industry. Use historical, trend, ratio data and current and future economic projections as well as information from the company’s MD&A to aid in preparing projections.
Clearly state your assumptions in a text box at the bottom of each tab. Cite sources for assumptions based on research.
The statements should be consistent, reasonable, and accurate. Areas that will be checked for accuracy include:
• The Balance Sheets should balance for all years presented.
• Retained earnings should be properly calculated using the prior year’s balance, net income, and dividends.
• The Ending Cash Balance on the Statement of Cash Flows should agree with the Cash Balance shown on the Balance Sheet for the same year.
• Net Income on the Income Statements should match what is reported on the top of the Statement of Cash Flows (if the indirect method is used).
o Other instructions:
The Excel workbook should be professionally formatted. Professional formatting includes:
• All numbers are formatted similarly. The use of decimals, commas for thousands, and other formatting is consistent.
• Dollar signs are included in the first and last numbers of each column.
• Subtotals and totals are preceded by a single underline. Totals are followed by a double underline.
• Line descriptions are indented/bolded in a manner that makes the spreadsheet easy to read.
All common-sized, horizontal analysis, and projection items should be calculated using formulas. Totals and subtotals should also be calculated using formulas. For an example of which cells may need formulas, please see Exhibits A & B.
Note: Your assignment will be checked for originality via the Turnitin plagiarism tool.
EXHIBIT A: EXAMPLE COMMON-SIZED BALANCE SHEETS (TAB 12, PARTIAL VIEW)
(IMPORTANT NOTE: ONLY PARTIAL BALANCE SHEET SHOWN. YOUR BALANCE SHEET SHOULD INCLUDE LIABILITIES AND STOCKHOLDERS’ EQUITY AS WELL.)
EXHIBIT B: EXAMPLE HORIZONTAL ANALYSIS OF BALANCE SHEETS (TAB 14, PARTIAL VIEW)
(IMPORTANT NOTE: ONLY PARTIAL BALANCE SHEET SHOWN. YOUR BALANCE SHEET SHOULD INCLUDE LIABILITIES AND STOCKHOLDERS’ EQUITY AS WELL.)
HOW TO WORK ON THIS ASSIGNMENT (EXAMPLE ESSAY / DRAFT)
This assignment requires you to add several new tabs to the Financial Statement Analysis Template created in Module 4. These tabs include Common Sized Balance Sheets, Common Sized Income Statements, Horizontal Analysis Balance Sheets, Horizontal Analysis Income Statements, Projected Income Statements, Projected Balance Sheets, and Projected Statement of Cash Flows.
For the Common Sized Balance Sheets tab, you need to use formulas to calculate the common sized percentages, linking to the Historical Balance Sheets for the calculations. The base for all common-sized calculations on the Balance Sheets should be “Total Assets”. Common-sized percentages should be calculated for all three historical years presented.
Similarly, for the Common Sized Income Statements tab, you need to use formulas to calculate the common-sized percentages, linking to the Historical Income Statements for the calculations. “Revenue” or “Total Revenue” (depending on your company) should be used as the base for all common-sized calculations on the Income Statements. Common-sized percentages should be calculated for all three historical years presented.
The Horizontal Analysis of Balance Sheets tab should start by copying and pasting the Historical Balance Sheets from Tab 3 to this worksheet. Then, add dollar and percentage change columns between each of the set of historical years. Similarly, for the Horizontal Analysis of Income Statements tab, you should copy and paste the Historical Income Statements from Tab 2 to this worksheet and add dollar and percentage change columns between each of the set of historical years.
For the Projected Income Statements tab, you need to include three years of projected statements, starting with the most recent year after the company’s last issued report. Similarly, for the Projected Balance Sheets tab, you need to include three years of projected statements, starting with the most recent year after the company’s last issued report. The Projected Statement of Cash Flows tab should also include three years of projected statements, starting with the most recent year after the company’s last issued report.
Projections should be based on research performed on your company and its industry. Use historical, trend, ratio data and current and future economic projections as well as information from the company’s MD&A to aid in preparing projections. Clearly state your assumptions in a text box at the bottom of each tab and cite sources for assumptions based on research.
The statements should be consistent, reasonable, and accurate. Areas that will be checked for accuracy include: The Balance Sheets should balance for all years presented. Retained earnings should be properly calculated using the prior year’s balance, net income, and dividends. The Ending Cash Balance on the Statement of Cash Flows should agree with the Cash Balance shown on the Balance Sheet for the same year. Net Income on the Income Statements should match what is reported on the top of the Statement of Cash Flows (if the indirect method is used).
The Excel workbook should be professionally formatted. All numbers should be formatted similarly, and the use of decimals, commas for thousands, and other formatting should be consistent. Dollar signs should be included in the first and last numbers of each column. Subtotals and totals should be preceded by a single underline, and totals should be followed by a double underline. Line descriptions should be indented/bolded in a manner that makes the spreadsheet easy to read.
Finally, all common-sized, horizontal analysis, and projection items should be calculated using formulas, and totals and subtotals should also be calculated using formulas.
Too Tired? Too Anxious? Need More Time? We’ve got your back.