APECS

Financial Modelling Test

30 January 2023

Test Brief
Premise
You are currently interviewing for a role at a Private Equity firm and have been tasked to complete this
financial model in order to proceed to the next stage of the interview.

Task
With the assumptions given (see “Assumptions” tab), you are required to balance the 3 financial statemen
(see “Financial Statements” tab) and fill in the other tabs (see “Capex Schedule”, “Working Capital
Schedule”, “Debt Schedule”, and “DCF”).

Deliverables
Send your excel file to [email protected] by 21 January 2359. Please title your excel file “APECS
Financial Modelling Test_<Group Member Name 1>_<Group Member Name 2>”. You will be given
feedback on your completed model before ICC 3.

Navigation:
Assumptions
Financial Statements
Capex Schedule
Working Capital Schedule
Debt Schedule
DCF

Legend:
Model Input/Assumptions
Formula of Cells within Same Sheet
Hardcoded Cells from AR, Investor Presentation or External Research
Linked to Same Sheet
Linked to Other Sheets
Linked to Other Files
12,345
12,345
12,345
12,345
12,345
Navigation
Assumptions

Risk free rate 3.0%

Beta 0.80
Market return 15.0%
Cost of debt 7.0%
Terminal value growth 3.0%

Forecast
FY 2023
Revenue growth % 5%
Gross margins % 50%
Operating expenses (as % of revenue) % 15%
Tax rate % 30.0%
Capex SGD M 80.0
Trade receivables (days of revenue) days 60.0
Inventories (days of cost of sales) days 80.0
Trade payables (days of cost of sales) days 50.0
Other receivable SGD M 35.0
Other payables SGD M 20.0
Interest on loan % 9.0%
Deposit rate % 1.0%
Minimum cash SGD M 5.0
Depreciation policy for existing fixed assets 4
Depreciation policy for new fixed assets 15
Repayment of existing debt 4
Days in a year 365

Note:
- For any shortfall in cash, please assume 100% financed by debt. Also assume cash sweep for debt r
- For calculation of interest expense/income, please use average of opening and closing debt/cash bal
- For calculation of working capital days, please use year end balance as reference
 Forecast Forecast Forecast Forecast
FY 2024 FY 2025 FY 2026 FY 2027
6% 7% 8% 9%
48% 46% 44% 42%
15% 15% 15% 15%
30.0% 30.0% 30.0% 30.0%
80.0 50.0 50.0 50.0
50.0 50.0 50.0 50.0
75.0 70.0 70.0 70.0
50.0 50.0 45.0 45.0
35.0 40.0 40.0 40.0
10.0 10.0 - -
9.0% 9.0% 9.0% 9.0%
1.0% 1.0% 1.0% 1.0%

years
years
years
days

ash sweep for debt repayment, factoring in minimum cash

losing debt/cash balance as reference
 Navigation
Financial Statements Actual
in SGD M 2022 A

x Income Statement
Revenue 300.0
Cost of goods sold (150.0)
Gross profit 150.0
Operating expenses (50.0)
EBITDA 100.0
Depreciation & amortization (40.0)
EBIT 60.0
Net interest expense (5.0)
Profit before taxation 55.0
Taxation (16.5)
Profit after taxation 38.5

Retained earnings c/f 120.0

Retained earnings b/f 158.5

x Balance Sheet
Cash 30.0
Inventories 33.0
Trade receivable 50.0
Other receivable 20.0
Total current assets 133.0
Net PPE 255.5
Total assets 388.5

Other payables 20.0

Trade payables 20.0
Total current liabilities 40.0
Debt 70.0
Total liabilities 110.0

Share capital 100.0

Share premium 20.0
Retained earnings 158.5
Shareholders' equity 278.5

Total shareholders' equity and liabilities 388.5

0.0
Check 1.0
x Cash Flow Statement
Net Income
Depreciation & amortization
Net interest expense
Change in WC
Change in Other WC
x Cash flow from operation

Capex
x Cash flow from investing

Net interest expense

Repayment / drawdown of debt
x Cash flow from financing

Opening Cash
Change in cash
x Closing Cash 30.0
 Forecast
2023 F 2024 F 2025 F 2026 F 2027 F

315.0 333.9 357.3 385.9 420.6 y

(157.5) (173.6) (192.9) (216.1) (243.9) y
157.5 160.3 164.3 169.8 176.6 y
(47.3) (50.1) (53.6) (57.9) (63.1) y
110.3 110.2 110.8 111.9 113.6 y
(69.2) (74.5) (77.9) (81.2) (20.7)
41.0 35.6 32.9 30.7 92.9
(5.1) (3.6) (1.4) 0.3 0.6
35.9 32.1 31.5 31.0 93.5
(10.8) (9.6) (9.4) (9.3) (28.1)
25.2 22.4 22.0 21.7 65.5

158.5 183.7 206.1 228.1 249.8

183.7 206.1 228.1 249.8 315.3

5.0 5.0 14.7 49.5 79.0

34.5 35.7 37.0 41.4 46.8
51.8 45.7 48.9 52.9 57.6
35.0 35.0 40.0 40.0 40.0
126.3 121.4 140.7 183.8 223.4
266.3 271.8 243.9 212.7 242.0
392.6 393.2 384.6 396.5 465.4

20.0 10.0 10.0 0.0 0.0

21.6 23.8 26.4 26.6 30.1
41.6 33.8 36.4 26.6 30.1
47.4 33.3 0.0 0.0 0.0
88.9 67.1 36.4 26.6 30.1

100.0 100.0 100.0 100.0 100.0

20.0 20.0 20.0 20.0 20.0
183.7 206.1 228.1 249.8 315.3
303.7 326.1 348.1 369.8 435.3

392.6 393.2 384.6 396.5 465.4

0.0 0.0 0.0 0.0 0.0
1.0 1.0 1.0 1.0 1.0
 25.2 22.4 22.0 21.7 65.5
69.2 74.5 77.9 81.2 20.7
5.1 3.6 1.4 (0.3) (0.6)
(1.7) 7.1 (1.9) (8.1) (6.7)
(15.0) (10.0) (5.0) (10.0) 0.0
82.7 97.7 94.4 84.5 78.8

(80.0) (80.0) (50.0) (50.0) (50.0)

(80.0) (80.0) (50.0) (50.0) (50.0)

This line should be ignored as

(22.6) (14.1) (33.3) 0.0 0.0
(22.6) (14.1) (33.3) 0.0 0.0

30.0 10.1 13.7 24.8 59.3

(19.9) 3.6 11.1 34.5 28.8
10.1 13.7 24.8 59.3 88.1
Assumptions FY 2023
Revenue growth % 5%
Gross margins % 50%

Operating expenses (as % of revenue) % 15%

Tax rate % 30.0%

This line should be ignored as it is a duplicate of net interest expense in Income Statement
FY 2024 FY 2025 FY 2026 FY 2027
6% 7% 8% 9%
48% 46% 44% 42%

15% 15% 15% 15%

30.0% 30.0% 30.0% 30.0%

Navigation
Capex Schedule Actual Forec
in SGD M 2022 A 2023 F
Net PPE 255.5 266.3

Capex 80.0

Depreciation of existing PPE 63.9

Depreciation of new PPE 5.3
Total depreciation 69.2

1
New PPE Depreciation Waterfall 5.3
FY 2023 0 80.0 5.3
FY 2024 1 80.0
FY 2025 2 50.0
FY 2026 3 50.0
FY 2027 4 50.0
 Forecast
2024 F 2025 F 2026 F 2027 F
271.8 243.9 212.7 242.0
Assumptions
80.0 50.0 50.0 50.0 Capex

63.9 63.9 63.9 0.0

10.7 14.0 17.3 20.7
74.5 77.9 81.2 20.7

2 3 4 5
10.7 14.0 17.3 20.7
5.3 5.3 5.3 5.3
5.3 5.3 5.3 5.3
3.3 3.3 3.3
3.3 3.3
3.3
 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027
SGD M 80.0 80.0 50.0 50.0 50.0
Navigation
Working Capital Schedule Actual Fore
in SGD M 2022 A 2023 F
Inventories 33.0 34.5
Trade receivable 50.0 51.8
Trade payables 20.0 21.6
Total WC 63.0 64.7
Change in WC 1.7

Other receivable 20.0 35.0

Other payables 20.0 20.0
Other WC 0.0 15.0
Change in Other WC 15.0

Net Change in All WC (WC and Other WC) 16.7

 Forecast
2024 F 2025 F 2026 F 2027 F
35.7 37.0 41.4 46.8 Inventories (days of cost of sales)
45.7 48.9 52.9 57.6 Trade receivables (days of revenue)
23.8 26.4 26.6 30.1 Trade payables (days of cost of sales)
57.6 59.5 67.7 74.3
(7.1) 1.9 8.1 6.7

35.0 40.0 40.0 40.0 Other receivable

10.0 10.0 0.0 0.0 Other payables
25.0 30.0 40.0 40.0
10.0 5.0 10.0 0.0

2.9 6.9 18.1 6.7

days 80.0 75.0 70.0 70.0 70.0
days 60.0 50.0 50.0 50.0 50.0
days 50.0 50.0 50.0 45.0 45.0

SGD M 35.0 35.0 40.0 40.0 40.0

SGD M 20.0 10.0 10.0 - -
Navigation
Debt Schedule Forecast
in SGD M 2022A 2023 F 2024 F
Opening cash 30.0 5.0
Cash flow from operation 82.7 97.7
Cash flow from investing (80.0) (80.0)
Minimum cash (5.0) (5.0)
Cash available for mandatory debt repayment 27.7 17.7
Mandatory repayment of debt (17.5) (17.5)
Interest on debt (5.3) (3.6)
Interest income 0.2 0.1
Cash available for discretionary debt repayment 5.1 (3.4)
Drawdown / (repayment) of debt (5.1) 3.4
Minimum cash (5.0) (5.0)
Ending Cash 5.0 5.0

Debt
Opening 70.0 47.4
Mandatory repayment (17.5) (17.5)
Balance 52.5 29.9
Drawdown / (repayment) of debt (5.1) 3.4
Closing 47.4 33.3

Interest
Average debt balance 58.7 40.3
Interest expense 5.3 3.6

Average cash balance 17.5 5.0

Interest income 0.2 0.1

Net Interest Expense 5.1 3.6

Forecast
2025 F 2026 F 2027 F
5.0 14.7 49.5
94.4 84.5 78.8
(50.0) (50.0) (50.0) Assumptions
(5.0) (5.0) (5.0) Minimum cash SGD M
44.4 44.2 73.4
(17.5) 0.0 0.0
(1.5) 0.0 0.0
0.1 0.3 0.6
25.5 44.5 74.0
(15.8) 0.0 0.0
(5.0) (5.0) (5.0)
14.7 49.5 79.0

33.3 0.0 0.0

(17.5) 0.0 0.0
15.8 - -
(15.8) 0.0 0.0
0.0 0.0 0.0

16.6 0.0 0.0

1.5 0.0 0.0

9.9 32.1 64.3

0.1 0.3 0.6

1.4 -0.3 -0.6

5.0
Navigation
WACC Calculaton
Cost of Debt After Tax 0.049 Risk free rate
Risk free rate 0.03 Beta
Beta 0.8 Market return
Market return 0.15 Cost of debt
Cost of Equity 0.126 Terminal value growth

Debt 70
Debt (%) 37%
Equity 120
Equity (%) 63%

WACC 9.8%

Discounted Cash Flow Analysis Foreca

in SGD M 2023 F
1

EBITDA 110.3
(+) Depreciation 69.2
(-) Capex (80.0)
(-) Change in WC (1.7)
(-) Change in Other WC (15.0)

FCF 82.7
Discount Factor 0.911
Discounted FCF 75.4

Terminal value 1181.2

Enterprise Value 1,575.5

(-) Debt (70.0)
(+) Cash 30.0
Equity Value 1,535.5

2023E EBITDA 110.3

Implied EV/EBITDA 13.9x

2023E Net profit 25.2

Implied P/E 61.0x
 0.03
0.8
0.15
0.07
0.03

Forecast
2024 F 2025 F 2026 F 2027 F
2 3 4 5

110.2 110.8 111.9 113.6

74.5 77.9 81.2 20.7
(80.0) (50.0) (50.0) (50.0)
7.1 (1.9) (8.1) (6.7)
(10.0) (5.0) (10.0) -

101.8 131.7 125.0 77.6

0.830 0.756 0.689 0.628
84.5 99.6 86.1 48.7