WSO Advisors

Analyst
The RBC Trolls
3-Statement Model
Hours To Complete: 1 hour(s)

Thank you for embarking on the path to become a Analyst with WSO Advisors. You will have 1 hour(s) to complete this 3-
Statement Model and send it back to The RBC Trolls.

Prompt:

Recreate from a blank spreadsheet a 5 year (2020E-2024E), three-statement, projection model (Income Statement /
Balance Sheet / Cash Flow)

Unless noted otherwise, keep growth rates, margins and implied ratios constant throughout the projection years to optimize
time spent demonstrating your understanding of the fundamentals of modeling, accounting and proper formatting.

Thanks and good luck!

Operating Assumptions

($ in thousands) 2019A
Revenues $20,000
YOY Growth 10%

COGS (Excl. Depreciation) $9,000

% Revenue (assume declining margin to 44%) 45%

General & Administration Expenses (excl. Amortization) $1,800

% Revenue (assume constant margin) 9%

Sales & Marketing Expenses (excl. Amortization) $1,100

% Revenue (assume declining margin to 4%) 6%

Depreciation (Book) $1,000

% Revenue (assume constant margin) 5%

Amortization of Goodwill & Other Intangibles $12

Capex $1,750
YOY Growth 0%
Other Assumptions

($ in thousands) 2019A

Annual Long Term Debt Paydown $200

Interest Rate on Long Term Debt 10%
Interest
MinimumRate
CashonBalance
Cash & Equivalents 5%
$250

Tax Rate 40%

($ in thousands) 2019A
Cash & Equivalents $1,500
Accounts Receivable 2,800
Inventory 2,000
Other Current Assets 100
Total Current Assets $6,400

Gross PP&E $12,900

Accumulated Depreciation 3,000
Net PP&E $9,900

Goodwill & Other Intangibles $150

Other Assets 500
Total Assets $16,950

Accounts Payable $1,200

Accrued Expenses & Liabilities 400
Taxes Payable 350
Other Current Liabilities 200
Total Current Liabilities $2,150

Long Term Debt 8,000

Other Long Term Liabilities 400
Total Liabilities $10,550

Shareholders Equity $6,400

Total Liabilities & Shareholder Equity $16,950

Operating Assumptions

($ in thousands) 2019A
Revenues $20,000
YOY Growth 10%

COGS (Excl. Depreciation) $9,000

% Revenue (assume declining margin to 44%) 45.0%

Gross Margin $11,000.00

Gross Margin 55%

General & Administration Expenses (excl. Amortization) $1,800

% Revenue (assume constant margin) 9%

Sales & Marketing Expenses (excl. Amortization) $1,100

% Revenue (assume declining margin to 4%) 5.5%

Operating Income (EBITDA) $8,100

Operating Margin 41%

Depreciation (Book) $1,000

% Revenue (assume constant margin) 5%

Amortization of Goodwill & Other Intangibles 12

EBIT $7,088

Interest Expense $810

Interest Income 68
EBT $6,346

Provision for Taxes 2,538

Net Income $3,807
Opening Balance Sheet

($ in thousands) 2019A
Cash & Equivalents $1,500
Accounts Receivable 2,800
Inventory 2,000
Other Current Assets 100
Total Current Assets $6,400

Gross PP&E $12,900

Accumulated Depreciation 3,000
Net PP&E $9,900

Goodwill & Other Intangibles $150

Other Assets 500
Total Assets $16,950

Accounts Payable $1,200

Accrued Expenses & Liabilities 400
Taxes Payable 350
Other Current Liabilities 200
Total Current Liabilities $2,150

Long Term Debt 8,000

Other Long Term Liabilities 400
Total Liabilities $10,550

Shareholders Equity $6,400

Total Liabilities & Shareholder Equity $16,950