Tfa Templates

INTERACTIVE TEMPLATES FOR USE WITH
TECHNIQUES OF FINANCIAL ANALYSIS, 10th Edition

by ERICH A. HELFERT
MAIN MENU
README
Modernsoft Inc., 1999

All rights reserved
Chapter 1: The Business System - An Overview

Key Assumptions
Operations: Price (per unit)
Volume (units)
Fixed costs
Variable costs - % sales
Depreciation - % fixed assets
Investment: Current assets - % sales
Current liabilities - % costs
Capital expenditures
Dis-investment
Financing: Interest rate
Tax rate
Dividend payout
Debt/equity ratio - targeted
Debt as % of capitalization
Income Statement
Sales
Costs
Depreciation
Operating profit (EBIT)
Interest
Profit before taxes
Taxes
Net income
Depreciation
effect
400
Period 1
3,000
8,100
11,100
1,600
3,300
5,600
10,500
1,620
3,555
5,925
11,100
900
8,900
1,380
9,480
Current liabilities
Long-term debt
Shareholders' equity
Liabilities and equity
Working capital
Capitalization
Cash Flow Statement

Operating Activities:
Net income
Depreciation
Change in working capital
Cash provided by operating activites
514
400
-480
434
Investing Activities:
Dis-investments
Cash (used in) investing activities
-750
250
-500
Financing Activities:
Debt proceeds (repayments)
Dividends paid
Stock proceeds (repurchase)
Cash from financing activites
580
Volume
1,000
Costs
(fixed & variable)
10,800
Dividends
Operating profit
after taxes
Interest
(tax adjusted)
309
720
206
Operations
Retained
earnings
206
Financing
Shareholders'
equity
5,925
Change in stock
119
Long-term debt
3,555
Change in debt
255
Funds surplus
(deficit)
-191
Funding
potential
389
Cash Flow
Uses
-1,000
-500
Sources
500
1,000
-750
Dis-investments
250
Working capital
-480
Income (cash basis)
914
Proceeds from debt
255
Proceeds from stock
255
-309
119
66
119
Dividends
-309
Investing
Change in cash
Cap. Expenditures
750
Investment change
Price
12
Investment
Dis-investment
250
Investment
base
8,900
Work cap. change

480
309
206
Base Period
2,500
8,000
10,500
Cash Flow
The Business System
New
investment
1,230
Period 1
12,000
10,400
400
1,200
343
857
343
514
Dividends
Retained earnings
Balance Sheet
Current assets
Fixed assets
Assets
12
1,000
2,000
70%
5%
25%
15%
750
250
10%
40%
60%
60%
38%
Income Statement
Balance Sheet
Operating
Financing

All rights reserved
Chapter 3: System View of Key Ratios and their Elements

Key Assumptions
Ratios Chart
Income Statement / Balance Sheet

Cash Flow Statement
Key Assumptions
Operations:
Price (per unit)
Volume (units)
Fixed costs
Variable costs - % sales
Investment:
Current assets - % sales
Current liabilities - % sales
Dis-investment
Depreciation % fixed assets
Financing:
Interest rate
Tax rate
Dividend payout
Debt/equity ratio - targeted
Debt as percent of capitalization
Income Statement
Sales
Costs
Depreciation
Operating profit (EBIT)
Interest
Profit before taxes
Taxes
Net income
Current liabilities
Long-term debt
25%
15%
750
250
5%
10%
40%
60%
60%
38%
Period 1
12,000
10,400
400
1,200
339
861
344
516
Dividends
Retained earnings
Balance Sheet
Current assets
Fixed assets
Assets
12
1,000
2,000
70%
EBIT
margin
10.0%
Operating decisions
Income tax
rate
40.0%
Operating
profit margin
6.0%
Working capital
turnover
10.0
Investment decisions
Fixed asset
turnover
1.5
Capital
turnover
1.3
Long-term
debt
3,488
Financing decisions
Payout/
retention
40.0%
Equity
5,813
Return on
investment
7.74%
Return on equity
(ROE)
8.88%
Debt proceeds
188
Leverage
proportions
60.0%
Stock proceeds
6
Ret. earnings
207
Net leverage
contribution
1.14%
Interest rate
after tax
5.84%
"Spread"
1.90%
310
207
Base Period
2,500
8,000
10,500
Period 1
3,000
8,100
11,100
1,600
3,300
5,600
10,500
1,800
3,488
5,813
11,100
900
8,900
1,200
9,300
Working capital
Capitalization
Note: For purposes of illustration, all calculations in the chart above

(except for interest expense/rate) are based on year end balances.
In practice, using average balance might be more appropriate.
Cash Flow Statement

Net income
Depreciation
516
400
-300
616
Dis-investments
-750
250
-500
Dividends paid
Stock proceeds (retirements)
188
-310
6
-116
Change in cash
0
All rights reserved
Chapter 4: Projection of Financial Requirements - Cash Budgets

Key Assumptions
Accounts Receivable
Pro forma income statements
Cash Budget by Month
Inventory Analysis
Pro forma balance sheets
Collection Pattern - Sales
Accrued Liabilities
KEY ASSUMPTIONS
Current sales and forecast
Current purchases and forecast
Terms: net (days)
Aug
1,925,000
Sep (e)
2,050,000
Oct
2,175,000
Nov
2,300,000
Dec
2,450,000
Jan
2,625,000
750,000
675,000
650,000
45
650,000
45
650,000
45
650,000
45
63
60
50
31
50
30
40
20
40
31
825,000
215,000
420,000
43,000
70.0%
15.0%
825,000
215,000
420,000
43,000
70.0%
15.0%
750,000
825,000
215,000
420,000
43,000
70.0%
14.0%
825,000
215,000
420,000
43,000
70.0%
14.0%
Collection period (days):

Date change effective (e.g. 31 = 31st of month )
Materials usage
Wages and salaries (paid as incurred)
Other manufacturing expenses (paid as incurred)
Depreciation
Cost of goods sold as percent of sales
Selling and administrative expenses % sales
Payments on note payable
Interest due
Dividends payable
Income taxes due
Income tax rate
50.0%
50.0%
50.0%
300,000
25,000
375,000
50.0%
Oct
Nov
Dec
Jan
2,608
2,092
2,983
2,400
713
215
420
326
25
1,699
663
215
420
345
750
2,393
650
215
420
343
1,628
650
215
420
368
300
25
375
2,353
25,000
XYZ COMPANY
Cash Budget by Month
Six Months Ended March 31, 2002 ($000's)
Cash receipts:
Collections
Cash disbursements:
Payments for purchases
Wages
Other expenses
Selling and administrative expense
Note repayments
Interest payments
Dividend payments
Tax payments
Total disbursements
1.50 months lag
Net cash receipts (disbursements)
910
(301)
1,355
48
Cumulative cash flow
910
609
1,964
2,012
Dec
Jan
Collection Pattern - Sales ($000's)

Timing of collections
Oct. 1-10
Oct. 11-20
Days
60
60
Aug
642
642
Sep
-
Oct
-
Month of sale
Nov
Oct. 21-31
Nov. 1-10
Nov. 11-20
Nov. 21-30
Dec. 1-10
Dec. 11-20
Dec. 21-31
Jan. 1-10
Jan. 11-20
Jan. 21-31
Feb. 1-10
Feb. 11-20
Feb. 21-28
Mar. 1-10
Mar. 11-20
Mar. 21-31
50
50
50
50
50
40
40
40
40
40
40
40
40
40
40
40
642
-
683
683
683
-
725
725
725
-
767
767
767
-
817
817
817
-
875
875
875
-
Accounts Receivable ($000's)

%
100.0%
100.0%
August sales
September sales
Sept. 30, 2001
October sales
November sales
December sales
0.0%
33.3%
100.0%
Dec. 31, 2001

January sales
February sales
March sales
0.0%
33.3%
100.0%
March 31, 2002
$000's
1,925
2,050
3,975
60
days
767
2,450
3,217
40
days
917
2,850
3,767
40
days
Inventory Analysis ($000's)
Raw materials:
Beginning balance (ending 9/30/01)
Purchases
Withdrawals
Ending balance
Finished goods:
Materials
Wages
Other expenses
Depreciation
Cost of goods sold reported
Ending balance
3 month average
650 per mo.
825
per mo.
3 month average
825 per mo.
215 per mo.
420 per mo.
43 per mo.
12/31/2001
3/31/2002
2,725
1,950
4,675
2,475
2,200
2,725
3,900
6,625
4,950
1,675
6 month average
650
6,420
2,475
645
1,260
129
10,929
4,848
6,082
6,420
4,950
1,290
2,520
258
15,438
10,605
4,833
6 month average
825
215
420
43
825
Accrued Liabilities ($000's)

Accrued interest
Accrued taxes (income statement)
Interest payment
Tax payment
Balance shown
12/31/2001
3/31/2002
2,875
75
494
3,444
3,444
2,875
150
1,171
4,196
300
375
3,521
XYZ COMPANY
Pro Forma Income Statements ($000's)
3 months ended
12/31/2001
6,925
4,848
2,078
1,014
75
988
494
494
6 months ended
3/31/2002
15,150
10,605
4,545
2,054
150
2,341
1,171
1,171
9/30/01 (e)
740
3,975
2,725
6,420
7,210
1,730
22,800
12/31/2001
2,704
3,217
2,200
6,082
7,081
1,730
23,013
3/31/2002
4,035
3,767
1,675
4,833
6,952
1,730
22,991
1,050
4,120
2,875
5,250
1,750
5,000
2,755
22,800
975
3,370
3,444
5,250
1,750
5,000
3,224
23,013
975
2,620
3,521
5,250
1,750
5,000
3,876
22,991
Sales
Cost of goods sold
Gross margin
Selling and administrative
Interest
Profit before taxes
Income taxes
Net income
Assume annual interest of
Net income: 1/1/02 - 3/31/02
XYZ COMPANY
Pro Forma Balance Sheets ($000's)
Cash
Accounts receivable
Raw materials
Finished goods
Plant and equipment (net)
Other assets
Total assets
Accounts payable
Notes payable
Accrued liability
Long-term debt
Preferred stock
Common stock
Retained earnings
Total liabilities
45
Collections calculation:
Lag
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
Sales Sales 000's
10
20
40
50
60
70
80
100
110
Aug. 1-10
Aug. 11-20
Aug. 21-31
Sep. 1-10
Sep. 11-20
Sep. 21-30
Oct. 1-10
Oct. 11-20
Oct. 21-31
Nov. 1-10
Nov. 11-20
Nov. 21-30
Dec. 1-10
Dec. 11-20
Dec. 21-31
641,667
641,667
641,667
683,333
683,333
683,333
725,000
725,000
725,000
766,667
766,667
766,667
816,667
816,667
816,667
641.7
641.7
641.7
683.3
683.3
683.3
725.0
725.0
725.0
766.7
766.7
766.7
816.7
816.7
816.7
Collectx
Change
Date
60.0
60.0
60.0
50.0
50.0
50.0
50.0
50.0
50.0
40.0
40.0
40.0
31
31
31
30
30
30
20
20
20
10
20
31
10
20
31
10
20
31
160
170
180
190
200
210
220
230
240
250
260
270
280
290
120
130
140
150
160
170
180
190
200
250
260
270
280
Jan. 1-10
Jan. 11-20
Jan. 21-31
Feb. 1-10
Feb. 11-20
Feb. 21-28
Mar. 1-10
Mar. 11-20
Mar. 21-31
875,000
875,000
875,000
916,667
916,667
916,667
950,000
950,000
950,000
875.0
875.0
875.0
916.7
916.7
916.7
950.0
950.0
950.0
40.0
40.0
40.0
40.0
40.0
40.0
40.0
40.0
40.0
31
31
31
28
28
28
31
31
31
10
20
31
10
20
31
10
20
31
Lag 2
40
100
-
Lag 3
-
Lag 4
-
10
20
30
40
50
60
70
80
90
100
110
120
130
140
150
160
170
180
190
160
200
170
210
180
180
220
10
190
190
230
10
200
200
240
30
60
90
120
150
Aug
Sep (e)
Oct
Nov
Dec
Jan
Feb
750,000
675,000
650,000
650,000
650,000
650,000
650,000
Collection all preceding periods; fill in gaps

in sequencing (10-40)
Lag
10
20
40
50
60
70
80
100
110
120
130
140
150
10
10
20
10
10
10
10
20
10
10
10
10
10
Lag Calc
10
20
30
50
60
70
80
90
110
120
130
140
150
Lag 1
10
20
30
50
60
70
80
90
110
120
130
140
150
160
10
160
170
10
170
180
10
190
200
Payment of purchases
July (e)
750,000
Diff
payment
1
Terms:
15
30
45
2
0.5000
3
1
0.5000
1.0000
0.5000
180
45
45
45
45
45
712,500
662,500
650,000
650,000
650,000
4
2
5
3
0.5000
vlookup
Month lag
15
60
90
1.0000
1
o forma income statements
o forma balance sheets
Feb
2,750,000
Mar
2,850,000
650,000
45
650,000
45
40
28
40
31
825,000
215,000
420,000
43,000
70.0%
12.0%
750,000
825,000
215,000
420,000
43,000
70.0%
12.0%
50.0%
50.0%
Feb
Mar
Total
2,567
2,708
15,358
650
215
420
330
750
2,365
650
215
420
342
1,627
3,975
1,290
2,520
2,054
1,500
300
50
375
12,064
202
1,081
3,295
2,213
3,295
Feb
Totals:
15,358
2,608
2,092
2,983
2,400
917
917
6 month average
per mo.
per mo.
6 month average
per mo.
per mo.
per mo.
per mo.
2,567
2,708
Assume annual interest of
300
et income: 1/1/02 - 3/31/02
677
days

All rights reserved
Change?
1
1
1
-
Collect
60
60
60
60
60
50
50
50
50
50
40
40
Oct. 1-10
Oct. 11-20
Oct. 21-31
Nov. 1-10
Nov. 11-20
Nov. 21-30
Dec. 1-10
Dec. 11-20
Dec. 21-31
Aug
642
642
642
-
Sep
683
683
683
-
Oct
725
725
725
-
Nov
767
767
Dec
Jan
Feb
40
40
40
40
40
40
40
40
40
Jan. 1-10
Jan. 11-20
Jan. 21-31
Feb. 1-10
Feb. 11-20
Feb. 21-28
Mar. 1-10
Mar. 11-20
Mar. 21-31
10
642
Aug. 1-10
20
642
Aug. 11-20
30
642
Aug. 21-31
40
683
Sep. 1-10
Feb. 1-10
641.7
-
641.7
-
641.7
-
Feb. 11-20
Feb. 21-28
Mar. 1-10
Mar. 11-20
Mar. 21-31
1
1
1
Sales:
767
-
817
817
817
-
875
875
875
-
917
917
50
683
Sep. 11-20
60
683
Sep. 21-30
70
725
Oct. 1-10
80
725
Oct. 11-20
90
725
Oct. 21-31
683.3
-
683.3
-
683.3
-
725.0
-
725.0
-
725.0
-
Aug. 1-10
Aug. 11-20
Aug. 21-31
Sep. 1-10
Sep. 11-20
Sep. 21-30
Oct. 1-10
Oct. 11-20
Oct. 21-31
Nov. 1-10
Nov. 11-20
Nov. 21-30
Dec. 1-10
Dec. 11-20
Dec. 21-31
Jan. 1-10
Jan. 11-20
Jan. 21-31
210
Mar
650,000
45
650,000
Purchases
Terms
100
767
Nov. 1-10
110
767
Nov. 11-20
120
767
Nov. 21-30
130
817
Dec. 1-10
140
817
Dec. 11-20
150
817
Dec. 21-31
160
875
Jan. 1-10
766.7
-
766.7
-
766.7
-
816.7
-
816.7
-
816.7
170
875
Jan. 11-20
180
875
Jan. 21-31
190
917
Feb. 1-10
875.0
875.0
875.0
916.7
200
917
Feb. 11-20
210
917
Feb. 21-28
220
950
Mar. 1-10
230
950
Mar. 11-20
240
950
Mar. 21-31
916.7
Chapter 5: Break-Even Analysis

Key Assumptions
Profit and Losses as a Function of Volume Changes

Operating Break-Even Chart
Key Assumptions
Contribution per unit
Revenue
Variable costs
Contribution
Fixed costs
Break-even volume
Profits and losses as a function of volume changes of
750
250
500
200
400
25.0%
Profits and Losses as a Function of Volume Changes of

Volume
400
500
625
781
977
1,221
Increase
Volume
400
300
225
169
127
95
25.0%
Increase
25.0%
25.0%
25.0%
25.0%
25.0%
Profits
50,000
112,500
190,625
288,281
410,352
Decrease
25.0%
25.0%
25.0%
25.0%
25.0%
25.0%
Losses
50,000
87,500
115,625
136,719
152,539
Decrease
125%
69%
51%
42%
75%
32%
18%
12%
Operating Break-Even Chart
1,000
900
$ Thousands
800
700
600
500
400
300
200
200
100
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
as a Function of Volume Changes
Total revenue
Variable costs
Fixed costs
1200
Volume

All rights reserved
Volume
0
100
200
300
400
500
600
700
800
900
1000
1100
1200
Revenue
75
150
225
300
375
450
525
600
675
750
825
900
Variable
200
225
250
275
300
325
350
375
400
425
450
475
500
Fixed
200
200
200
200
200
200
200
200
200
200
200
200
200
Chapter 5: Basic Financial Growth Model

Key Assumptions
Net assets (capitalization)
Gross return on net assets
Interest rate (before tax)
Tax rate
Dividend payout
Capital structure:
Debt to equity ratio
Debt
Equity
Profitability (after taxes):
Amount of profit
Tax rate
Interest rate (tax-adjusted)
Amount of interest (tax-adjusted)
Profit after interest
Financing:
Additional debt
Funding potential
40.0
80.0
Cash flow implications:

Amount of aftertax profit
Depreciation effect
Cash flow from operations
Dividends paid
Cash flow available for reinvestment
Additional debt
Total investment potential
40.0
25.0
65.0
65.0
40.0
105.0
Results:
Net return on net assets
Return on equity
Growth in equity
8.0%
16.0%
16.0%
Income Statement
Sales
Costs
Depreciation
Operating profit
Interest
Income before taxes
Taxes
Net income
ROC
10.0%
x
Retention rate
100.0%
10.0%
50.0
6.0%
33.3%
4.0%
10.0
40.0
0.0%
40.0
16.0%
Depreciation
effect
25
Work cap. change
200.0%
x
Retention rate
100.0%
Dis-investment
Investment base
Current liabilities
Long-term debt
250
250
500
290
290
580
Working capital
Capitalization
500
580
40
25
Investment change
Cap. Expenditures
Price
Volume
Costs
Operations
(fixed & variable)
Dividends
Operating profit
after taxes
50
Interest
(tax-adjusted)
10
Retained
earnings
Financing
40
Shareholders'
equity
290
Change in stock
0
Long-term debt
Funds surplus
(deficit)
0
Funding potential
290
Change in debt
40
80
Cash Flow
Uses
-150
-100
-50
Sources
0
50
Increase (decrease) in cash

Beginning cash
Ending cash
100
65
-105
Dividends paid
Stock proceeds (repurchase)
Investment
#REF!
80
Period 1
580
Dis-investments
Financial leverage
500
500
Cash Flow Statement

Net income
Depreciation
Sustainable
growth rate
The Business System
0
40
Period 0
Debt to equity
100.0%
x
( ROC - i )
6.0%
x
Retention rate
100.0%
ROS
20.0%
x
Sales / assets
40.0%
x
New
investment
105
Period 1
200
100
25
75
15
60
20
40
Dividends
Retained earnings
Sustainable Growth Equation

The Business System - Overview
Cash Flow (graph)
Sustainable Growth Equation
50.0%
100.0%
250.0
250.0
500.0
Disposition of profit:
Dividend payout
Dividends paid
Reinvestment of profit
Balance Sheet
Current assets
Fixed assets
Assets
Results
Income Statement
Balance Sheet
Cash Flow Statement
500.0
50.0%
10.0%
6.0%
33.3%
0.0%
Investment potential
-105
65
-105
40
Debt
40
0
0
40
0
0
0
Stock
0
Investing
Operating
Dividends
Financing
Chapter 5: Financial Growth Model - Impact of Different Policies

Policy assumption inputs
POLICY ASSUMPTION INPUTS:

Case I
Capital structure
Financing (next year)
Profitablity (after taxes)
Cash flow implications
Disposition of profit
Results
Case II
Case III
500.0
500.0
500.0
0.0%
50.0%
50.0%
10.0%
10.0%
10.0%
0.00%
6.00%
6.00%
Tax rate
33.3%
33.3%
33.3%
Dividend payout
0.0%
0.0%
50.0%
Depreciation effect
25.0
25.0
25.0
Capital structure:
Case I
Case II
Case III
Case IV
500.0
Case IV
Case V
500.0
Case V
Case VI
500.0
Case VI
Case VII
500.0
Case VII
0.0%
50.0%
50.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
0.0%
0.0%
0.0%
250.0
250.0
500.0
250.0
250.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
500.0
10.0%
10.0%
10.0%
0.0%
0.0%
0.0%
0.0%
50.0
50.0
50.0
0.00%
6.00%
6.00%
0.00%
0.00%
0.00%
0.00%
Tax rate
33.3%
33.3%
33.3%
0.0%
0.0%
0.0%
0.0%
0.00%
4.00%
4.00%
0.00%
0.00%
0.00%
0.00%
Debt
Equity
Amount of profit

10.0
10.0
50.0
40.0
40.0
0.0%
0.0%
50.0%
0.0%
20.0
40.0
20.0
Dividend payout
Dividends paid
50.0
0.0%
0.0%
0.0%
Financing:
Additional debt
40.0
20.0
50.0
80.0
40.0
50.0
40.0
40.0
Depreciation effect
25.0
25.0
25.0
75.0
65.0
65.0
20.0
65.0
45.0
40.0
20.0
105.0
65.0
Funding potential
Dividends paid
Additional debt
75.0
75.0
Results:
10.0%
8.0%
8.0%
0.0%
0.0%
0.0%
0.0%
Return on equity
10.0%
16.0%
16.0%
0.0%
0.0%
0.0%
0.0%
Growth in equity
10.0%
16.0%
8.0%
0.0%
0.0%
0.0%
0.0%
Chapter 5: Five-Year Projection - Effect of Policy Changes

Policy assumption inputs
Capital structure
Financing (next year)
Profitablity (after taxes)
Cash flow implications
Disposition of profit
Results
($ thousands)
POLICY ASSUMPTION INPUTS:
Year 1
Year 2
Year 3
Year 4
Year 5
900.0
33.3%
43.0%
43.0%
50.0%
50.0%
8.0%
7.0%
8.0%
8.0%
9.0%
6.00%
6.00%
6.00%
6.75%
6.75%
Tax rate
33.3%
33.3%
33.3%
33.3%
33.3%
Dividend payout
60.0%
50.0%
50.0%
50.0%
40.0%
40.0
46.0
50.0
65.0
72.0
Depreciation effect
Year 6
50.0%
($ thousands)
Capital structure:
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
33.3%
43.0%
43.0%
50.0%
50.0%
50.0%
50.0%
75.4%
75.4%
100.0%
100.0%
100.0%
Debt
300.0
470.7
492.5
688.9
728.5
787.5
Equity
600.0
624.0
652.9
688.9
728.5
787.5
900.0
1,094.7
1,145.4
1,377.7
1,457.0
1,575.0

Amount of profit
Year 1
8.0%
Year 2
7.0%
Year 3
8.0%
Year 4
8.0%
Year 5
9.0%
Year 6
0.0%
72.0
76.6
91.6
110.2
131.1
6.00%
6.00%
6.00%
6.75%
6.75%
0.00%
Tax rate
33.3%
33.3%
33.3%
33.3%
33.3%
0.0%
4.00%
4.00%
4.00%
4.50%
4.50%
0.00%
12.0
18.8
19.7
31.0
32.8
60.0
57.8
71.9
79.2
98.3

Dividend payout
Dividends paid
Financing (next year):
New debt, old ratio
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
60.0%
50.0%
50.0%
50.0%
40.0%
36.0
28.9
36.0
39.6
39.3
24.0
28.9
36.0
39.6
59.0
Year 1
Year 2
Year 3
Year 4
Year 5
0.0%
Year 6
12.0
21.8
27.1
39.6
59.0
New debt, revised ratio
158.7
169.2
(787.5)
Funding potential
194.7
50.7
232.3
79.2
118.0
(787.5)
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
60.0
57.8
71.9
79.2
98.3
Depreciation effect
40.0
46.0
50.0
65.0
72.0
100.0
103.8
121.9
144.2
170.3
Dividends paid
36.0
28.9
36.0
39.6
39.3
64.0
74.9
86.0
104.6
131.0
170.7
21.8
196.3
39.6
59.0
(787.5)
234.7
96.7
282.3
144.2
190.0
(787.5)
Additional debt
Results:
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
6.7%
5.3%
6.3%
5.8%
6.8%
0.0%
Return on equity
10.0%
9.3%
11.0%
11.5%
13.5%
0.0%
Growth in equity
4.0%
4.6%
5.5%
5.8%
8.1%
0.0%
0.60
0.58
0.72
0.79
0.98
0.36
0.29
0.36
0.40
0.39
Earnings per share

Dividends per share
100,000
Chapter 6 - 7: Comparing Alternatives - Present Value Analysis

Present Value Analysis
Key Assumptions
TOTALS
Net investment outlay & recovery
-10,500
Annual benefits
Project Cash Flows Chart

0
Depreciation
36.0%
PV Factor
14.0%
TOTALS
Depreciation tax shield

Total project cash flows (incl. recovery)
10
10
1,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
1,500
1,500
1,500
1,500
1,500
1,500
1,500
36%
36%
36%
36%
36%
36%
36%
36%
36%
36%
2,560
2,560
2,560
2,560
2,560
2,560
2,560
3,780
540
540
540
540
540
540
540
11,200
PV Factor @ 14%
Present value of investment cash flows
17,920
Tax rate @36%

Aftertax benefits
-11,500
28,000
Tax rate
-11,100
-11,500
3,100
3,100
3,100
3,100
3,100
3,100
4,100
1.000
0.877
0.769
0.675
0.592
0.519
0.456
0.400
0.351
0.308
0.270
-11,500
400
2,719
2,385
2,092
1,835
1,610
1,412
1,239
Present value of total cash flows
-11,500
2,719
2,385
2,092
1,835
1,610
1,412
1,639
Cumulative present value
-11,500
-8,781
-6,395
-4,303
-2,467
-857
555
2,193
2,193
2,193
2,193
Present value of operating cash flows
Net present value @ 14%

Profitability index (BCR) @ 14%
Internal rate of return
Present value payback @ 14%
13,294
2,193
1.20
19.9%
6 Year *
8000
Chapter 9: Analysis of Financing Choices

Key Assumptions
Recap of EPS Analyses
Balance Sheet
Zero EPS Calculation
Range of EBIT and EPS Chart
EPS Calculation - Original
Key Assumptions ($000's)
ABC CORPORATION: Range of
Operations:
Original
EBIT - before new product
New
7.00
7,999
EBIT - incremental from new product
2,000
Investment:
6.00
Current assets
15,000
Fixed assets (net)
29,000
Other assets
1,000
Current liabilities
7,000
5.00
Financing:
4.00
New financing (debt/preferred/common)
10,000
Tax rate
34.0%
34.0%
Interest rate
11.5%
Preferred dividend rate
12.5%
Dividends per share
Common shares O/S (000's)

Price per common share (net)
2.50
2.50
36.36
1,000
$
10.00
Cost of capital
Retained earnings
1,275
13.25%
Current assets
15,000
Fixed assets
29,000
Other assets
1,000
Assets
45,000
2.50
2.00
1.00
0.00
0.00
2.00
7,000
Long-term debt
Preferred stock
Common stock
10,000
Retained earnings
28,000
3.00
28,000
Balance Sheet (original)
Current liabilities
5.28
45,000
ABC CORPORATION
Recap of EPS Analyses with new Product ($000's)
New Financing of $10 Million
Original
Earnings before interest and taxes (EBIT)
Debt
Preferred
Common
7,999
9,999
9,999
9,999
1,150
7,999
8,849
9,999
9,999
2,720
3,009
3,400
3,400
Earnings after income taxes
5,279
5,840
6,599
6,599
Less: Preferred dividends
1,250
5,279
5,840
5,349
6,599
Less: Interest charges on long-term debt

Earnings before income taxes
Less: Incomes taxes at 34%
Earnings available for common stock
Common shares outstanding (000's)

Earnings per share (EPS)
Less: Common dividends per share
Retained earnings per share
1,000
1,000
1,000
1,275
5.28
5.84
5.35
5.18
2.50
2.50
2.50
2.50
2.78
3.34
2.85
Retained earnings in total
2,779
Original EPS change (before new product)
2.68
3,340
2,849
3,412
-21.6%
-14.4%
-23.7%
Final EPS change (with new product)
10.6%
1.3%
-2.0%
Specific cost
7.59%
12.50%
13.25%
ABC CORPORATION
Zero EPS Calculation ($000's)
New Financing of $1 Million
Original
Debt
Preferred
Common
1,000
1,000
1,000
1,275
Preferred dividends
1,250
Earnings after taxes
1,250
Incomes taxes at 34%
644
1,894
Interest charges on long-term debt
1,150
EBIT or zero EPS
1,150
1,894
ABC CORPORATION
Earnings per Share Calculation - Original ($000's)
ABC CORPORATION
Earnings per Share with New Bond Issue ($0
Original
7,999
7,999

2,720
5,279
5,279

1,000
5.28
2.50
2.78
2,779

Original EPS
Change in EPS
Percent change in EPS
ABC CORPORATION
Earnings per Share with New Preferred Stock Issue ($000's)

ABC CORPORATION
Earnings per Share with New Common Stoc
Before New
With New
Product
Product
7,999
9,999

7,999
9,999
2,720
3,400
5,279
6,599
1,250
1,250
4,029
5,349

1,000
Change in EPS

1,000
4.03
5.35
2.50
2.50
1.53
2.85

Original EPS
1,529
2,849
5.28
5.28
Original EPS
-$
1.25
0.07
Change in EPS
1.3%
-23.7%
EPS Calculation with New Bond Issue

EPS Calculation with New Preferred Stock Issue
EPS Calculation with New Common Stock Issue
ABC CORPORATION: Range of EBIT and EPS Chart
EPS = [(E - i)(1 - t) - d]/s

E = EBIT
i = interest $
t = tax rate
d = preferred dividends $
s = shares outstanding
4.53
2.75
Original
Bonds
Preferred
Common
Orig. EPS
Div/Sh
4.00
6.00
EBIT ($millions)
8.00
10.00
E(1-t)/s
(E-i)(1-t)/s
(E(1-t)-d)/s
E(1-t)/s
12.00
Share with New Bond Issue ($000's)

Before New
With New
Product
Product
nterest and taxes (EBIT)
7,999
9,999
harges on long-term debt
1,150
1,150
6,849
8,849
2,329
3,009
4,520
5,840
e for common stock
outstanding (000's)
dividends per share
4,520
5,840
1,000
1,000
4.52
5.84
2.50
2.50
2.02
2,020
3.34
3,340
5.28
-$
0.76
-14.4%
5.28
0.56
10.6%
Share with New Common Stock Issue ($000's)
nterest and taxes (EBIT)
harges on long-term debt
Before New
With New
Product
Product
7,999
9,999
e for common stock
outstanding (000's)
dividends per share
7,999
9,999
2,720
3,400
5,279
6,599
5,279
6,599
1,275
1,275
4.14
5.18
2.50
2.50
1.64
2,092
2.68
3,412
5.28
5.28
-$
1.14
-$
0.10
-21.6%
-2.0%

All rights reserved
E - i)(1 - t) - d]/s
erred dividends $
es outstanding
BREAKEVEN data source for graphing

EPS=
EBIT
0.00
5.32
Original
0.00
3.51
Bonds
-0.76
2.75
Preferred
-1.25
2.26
Common
0.00
2.75
Orig. EPS
$
5.28 $
5.28 $
Div/Sh
$
2.50 $
2.50 $
8.76
5.78
5.02
4.53
4.53
5.28 $
2.50 $
11.00
7.26
6.50
6.01
5.69
5.28
2.50
Chapter10-11: Total Company Valuation

Totals
Key Assumptions
Year: 0
10,000
12,000
13,000
12,000
13,500
12,500
6,500
7,000
8,600
9,300
9,900
11,900
Less: net new working capital
-1,200
-1,400
-1,800
500
-1,600
-2,000
Less: net new capital investments
-8,000
-15,000
-10,200
-11,000
-22,000
-10,000
500
-300
400
1,200
-800
7,800
2,300
10,000
12,000
-1,000
12,400
EBIT x (1 - t)
Add: write-offs and non-cash items
Add/less: significant non-operating items

Free cash flow
187,500
Ongoing value
0.893
0.797
0.712
0.636
0.567
0.507
0.452
0.404
0.361
Present value of free cash flow
6,964
1,834
7,118
7,626
-567
6,282
Present value of ongoing value
94,993
6,964
8,798
15,916
23,542
22,974
124,250
124,250
124,250
124,250
Present value factors @
12.0%
Cumulative present value
124,250
Firm value
124,250
Non-operating assets
Total value
Value of long-term debt outstanding
Value of company equity
5,700
129,950
40,000
89,950
Chapter 11: An Illustration of Economic Profit, CFROI, and Earnings Measures ($000's)
Key Assumptions
Working capital - initial
Fixed investment - initial
Economic life
Cost of capital
Net present value factor
NOPAT
Capital amortization
Depreciation effect
Economic Profit Analysis
Book value of fixed investment (beg.)
Working capital
Total book value
Cost of capital
Capital charge @ 10%
NOPAT
Economic profit (EVA)
Present value factor @ 10%
Net PV of economic profits @ 10%
The Divergence of Accounting and Cash Flow Measures (gra

2,000
10,000
8
10.0%
10.0%
824.4
874.4
1,250
0
1.000
0
Cash Flow Return on Investment Analysis

NOPAT
Add back depreciation effect
Operating cash flow generated
Initial investment
Cost of capital
Capital charge @ 10%
Capital amortization @ 10%
Terminal recovery of working capital
Total cash flow requried
Present value of future cash flows
Net present value @ 10%
12,000
-12,000
12,000
0
Other Measures
ROE
ROCE / RONA
ROGI
CFROI
Project/business IRR
Cost of capital
Accounting ROA
Accounting ROGI
Economic Profit Analysis

Cash Flow Return on Investment Analysis
Other Measures
Note: The simplified example here shows a company earning exa

In other words, the net present value of Economic profits when dis
capital equals zero; likewise the DCF-ROI or IRR equals the Cost
1
10,000
2,000
12,000
10.0%
1,200
824
-376
0.909
-341
2
8,750
2,000
10,750
10.0%
1,075
824
-251
0.826
-207
3
7,500
2,000
9,500
10.0%
950
824
-126
0.751
-94
4
6,250
2,000
8,250
10.0%
825
824
-1
0.683
0
5
5,000
2,000
7,000
10.0%
700
824
124
0.621
77
1
824
1,250
2,074
2
824
1,250
2,074
3
824
1,250
2,074
4
824
1,250
2,074
5
824
1,250
2,074
12,000
10.0%
1,200
874
0
2,074
1,886
12,000
10.0%
1,200
874
0
2,074
1,714
12,000
10.0%
1,200
874
0
2,074
1,559
12,000
10.0%
1,200
874
0
2,074
1,417
12,000
10.0%
1,200
874
0
2,074
1,288
1
6.9%
6.9%
17.3%
10.0%
2
7.7%
7.7%
17.3%
10.0%
3
8.7%
8.7%
17.3%
10.0%
4
10.0%
10.0%
17.3%
10.0%
5
11.8%
11.8%
17.3%
10.0%
The Divergence of Accounting and Cash Flow Meas
30.0%
25.0%
20.0%
Rate of return
20.0%
15.0%
10.0%
5.0%
6.9%
0.0%
1
5
Year
Graph Data
Project/business IRR
Cost of capital
Accounting ROA
Accounting ROGI
1
10.0%
10.0%
6.9%
17.3%
2
10.0%
10.0%
7.7%
17.3%
3
10.0%
10.0%
8.7%
17.3%
4
10.0%
10.0%
10.0%
17.3%
5
10.0%
10.0%
11.8%
17.3%
6
10.0%
10.0%
14.3%
17.3%
d Cash Flow Measures (graph)
hows a company earning exactly its cost of capital.

e of Economic profits when discounted at the Cost of
F-ROI or IRR equals the Cost of capital.
6
3,750
2,000
5,750
10.0%
575
824
249
0.564
141
7
2,500
2,000
4,500
10.0%
450
824
374
0.513
192
8
1,250
2,000
3,250
10.0%
325
824
499
0.467
233
10
11
12
13
14
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
0
0
0
0.0%
0
0
0
0
0
0
0
0.0%
0
0
0
0
6
824
1,250
2,074
7
824
1,250
2,074
8
824
1,250
2,074
10
11
12
13
14
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
12,000
10.0%
1,200
874
0
2,074
1,171
12,000
10.0%
1,200
874
0
2,074
1,065
12,000
10.0%
1,200
874
2,000
4,074
1,901
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
0
0
0
0
0
0.0%
0
0
0
0
0
6
14.3%
14.3%
17.3%
10.0%
7
18.3%
18.3%
17.3%
10.0%
8
25.4%
25.4%
17.3%
10.0%
10
11
12
13
14
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%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
unting and Cash Flow Measures

25.4%
17.3%
10.0%
10.0%

All rights reserved
7
10.0%
10.0%
18.3%
17.3%
8
10.0%
10.0%
25.4%
17.3%
15
0
0
0
0.0%
0
0
0
0
15
0
0
0
0
0.0%
0
0
0
0
0
15
0.0%
0.0%
0.0%
0.0%
WELCOME to Interactive Templates for TFA

These templates are intended to be used as a companion to TECHNIQUES OF FINANCIAL ANALYSIS (TFA),
by Dr. Erich Helfert, 10th Millennium Edition.
Every template is taken from specific examples/exercises in the text book. References to the book are
found on the Main Menu. As such, these templates should be used along side the book which explains
the relevance and design of each exercise.
Insofar as TFA's emphasis is around the concept that any business is essentially a financial system of cash
flows ... these templates allow the user to examine the interrelationships between investment ,
operating , and financing variables within the financial system. Collectively, they should greatly enhance
your understanding of the concepts presented in TFA.
Below is a quick reference on
Tips
Tips
and
and
Tricks
Tricks
. .
How to Use Interactive Templates for TFA and a few
HOW TO USE Interactive Templates for TFA

These templates are Microsoft Excel templates (using Excel 97). It is assumed the user has a basic
understanding of using Excel. All templates follow the schematic shown in the example below.
Sample Template
START HERE
(Try me!)
Key Assumptions
Sales
500.0
Costs as percent of sales
40.0%
Click to view
graph / table
Click here to access MAIN MENU. From there you can go
to any worksheet by simply clicking on the appropriate
button. Alternatively, click on tabs below at any time for
direct access to any worksheet / template.
ALL inputs are made in the Assumptions table found in the

upper left part of each worksheet.
Income Statement
Sales
Sales
500.0
Costs
Costs
200.0
Income
Income
300.0
600.0
To display comments, rest pointer over cell with red

comment indicator in upper-right corner of cell.
Inputs are only allowed in white cells which are unlocked.

The remainder of the worksheet is protected and will NOT
allow any changes.
Change values here and observe the results in the tables
and charts.
500.0
400.0
Sales
300.0
Costs
200.0
Income
100.0
Results are displayed in separate tables. Every table is

taken directly from TFA. All calculated terms are displayed
in shaded cells (which are locked and protected).
Graphs and charts, also taken directly from TFA, are

dynamically linked to the inputs and results. Change the
inputs and observe the changes on the graph / chart.
Click on Home button to return to top of template.
TIPS and TRICKS

VIEWING
Zoom in/out with different magnifications to optimize view for your screen.
Use split screen and freeze panes commands to view multiple panels.
Open new window to view multiple windows simultaneously.
SENSITIVITY
ANALYSIS
To quickly view the results of changing one input, first enter new value in Assumptions
section for input. Go to table / chart / graph to observe resultant change. Now use the
undo and redo buttons on your toolbar, alternatively, to see before and after impact.
MODIFYING
TEMPLATES
If you're an experienced Excel user, if you wish you can easily modify and customize
the template(s) for your own use. Simply unprotect the worksheet. However, be
careful not to violate the financial integrity of the interrelationships. (P.S. If you
mess up, don't worry. Simply retrieve the original templates from your program disk.)
Note:
Some of the graphics may not appear correctly on your screen. This is NOT a problem
with your computer/screen or the template. These templates are optimized for
a screen resolution of 1024 x 768.

Tfa Templates

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INTERACTIVE TEMPLATES FOR USE WITH

TECHNIQUES OF FINANCIAL ANALYSIS, 10th Edition

Modernsoft Inc., 1999

Chapter 1: The Business System - An Overview

Cash Flow Statement

Proceeds from debt

Proceeds from stock

Work cap. change

Modernsoft Inc., 1999

Chapter 3: System View of Key Ratios and their Elements

Income Statement / Balance Sheet

Note: For purposes of illustration, all calculations in the chart above

Cash Flow Statement

Chapter 4: Projection of Financial Requirements - Cash Budgets

Pro forma income statements

Cash Budget by Month

Pro forma balance sheets

Collection Pattern - Sales

Collection period (days):

1.50 months lag

Net cash receipts (disbursements)

Cumulative cash flow

Collection Pattern - Sales ($000's)

Accounts Receivable ($000's)

Dec. 31, 2001

March 31, 2002

Inventory Analysis ($000's)

Accrued Liabilities ($000's)

Beginning balance (ending 9/30/01)

Assume annual interest of

Net income: 1/1/02 - 3/31/02

Sales Sales 000's

Collection all preceding periods; fill in gaps

o forma income statements

o forma balance sheets

Assume annual interest of

et income: 1/1/02 - 3/31/02

Modernsoft Inc., 1999

Chapter 5: Break-Even Analysis

Profit and Losses as a Function of Volume Changes

Profits and Losses as a Function of Volume Changes of

Operating Break-Even Chart

as a Function of Volume Changes

Modernsoft Inc., 1999

Chapter 5: Basic Financial Growth Model

Cash flow implications:

Work cap. change

(fixed & variable)

Increase (decrease) in cash

Cash Flow Statement

The Business System

Sustainable Growth Equation

Sustainable Growth Equation

Cash flow from operations

Chapter 5: Financial Growth Model - Impact of Different Policies

POLICY ASSUMPTION INPUTS:

Financing (next year)

Profitablity (after taxes)

Cash flow implications

Gross return on net assets

Interest rate (before tax)

Debt as percent of capitalization

Debt as percent of capitalization

Debt to equity ratio