Case Study A Strictly Confidential

Table of Contents Model Checks

Outputs Model Exceeding Operational Capacity? No

Inputs Unused Tax Losses Remaining? Yes
Model Balanced Sheet Unbalanced? No

Model Circularity

Model Circularity 1

This model now has the circularity turned on. Please confirm the Excel settings below
PC File - Options - Formulas - Check the box on the top-right labeled 'Enable iterative calculation'.
Mac Excel - Preferences - Calculation - Check the box near the bottom labeled 'Use iterative calculation'.

© 2015 to 2022 CFI Education Inc.

This Excel model is for educational purposes only and should not be used for any other reason. All content is Copyright material of CFI Education Inc.
All rights reserved. The contents of this publication, including but not limited to all written material, content layout, images, formulas, and code, are protected
under international copyright and trademark laws. No part of this publication may be modified, manipulated, reproduced, distributed, or transmitted in any
form by any means, including photocopying, recording, or other electronic or mechanical methods, without prior written permission of the publisher,
except in the case of certain noncommercial uses permitted by copyright law.

https://corporatefinanceinstitute.com/
 Dashboard: Charts & Graphs

All figures in USD thousands unless stated 2020A 2021A 2022A 2023F 2024F 2025F 2026F 2027F

Driver Switch

INCOME STATEMENT

Revenue 28,351 33,828 39,694 – – – – –

EBITDA – – – – – – – –
EBITDA Margin – – – #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Net Income – – – – – – – –
Net Income Margin – – – #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

CASH FLOW STATEMENT

Operating – – – – – – – –
Investing – – – – – – – –
Financing – – – – – – – –
Change in Cash – – – – – – – –

INCOME STATEMENT CASH FLOW STATEMENT

Revenue EBITDA Margin Net Income Margin 1 Investing Financing Operating Change in Cash
45,000 100.0%

40,000 90.0%

80.0%
35,000
70.0%
30,000
60.0%
25,000
50.0% 1
20,000
40.0%
15,000
30.0%
10,000
20.0%

5,000 10.0%

– – –
2020A 2021A 2022A 2023A 2024A 2025A 2026A 2027A 2020A 2021A 2022A 2023A 2024A 2025A 2026A 2027A

Case Study A Page 2 of 20

 Drivers

All figures in USD thousands unless stated 2023F 2024F 2025F 2026F 2027F

Driver Switch 2

Sales Volume Growth

Best Case 11.0% 9.0% 8.0% 5.0% 2.0%

Base Case 9.0% 7.0% 7.0% 5.0% 2.0%
Worst Case 3.0% 2.0% 1.0% 0.5% 0.5%

Pricing Increases

Best Case 10.0% 8.0% 8.0% 5.0% 2.0%

Base Case 8.0% 7.0% 7.0% 5.0% 1.0%
Worst Case 3.0% 2.0% 1.0% 0.5% 0.5%

Capital Expenditure

Best Case 5,500 5,000 5,000 4,750 4,250

Base Case 6,500 6,000 5,500 5,500 4,500
Worst Case 7,500 7,000 6,500 6,500 5,000

Case Study A Page 3 of 20

 Other Inputs

All figures in USD thousands unless stated 2023F 2024F 2025F 2026F 2027F

Working Capital
Accounts Receivable (Days) 50 50 50 40 40
Inventory (Days) 30 30 30 30 30
Accounts Payable (Days) 45 45 50 50 55

Other Annual Inputs

Inflation Rate 4.0% 3.0% 3.0% 2.5% 2.5%
Term Debt Increase / (Decrease) (5,000) (5,000) (5,000) (5,000) (5,000)
Common Equity Increase / (Decrease) – – – – –

Dates Taxes
First Year of Forecast (YYYY) 2023 Tax Rate 25%
Days in Period 365 First Year Tax Depreciation 50%
Blended Tax Depreciation Rate 25.0%
Tax Basis for Assets (End of 2022) 46,718
Other Single Inputs Tax Losses (End of 2022) 3,711
Plant Capacity (Units/Day) 2,000
Dividend Payout Ratio 25%

Interest Rates Depreciation

Cash Balances 1.0% First Year Accounting Depreciation 50%
Revolving Credit Line 5.0% Useful Life: Existing Assets (Years) 16.00
Long Term Debt 6.0% Useful Life: New Assets (Years) 20.00

Case Study A Page 4 of 20

 Income Statement

All figures in USD thousands unless stated 2020A 2021A 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

Inflation 2.5% 3.5% 4.5% 4.0% 3.0% 3.0% 2.5% 2.5%

Revenue 28,351 33,828 39,694

COGS (22,803) (24,265) (25,960)
Gross Profit

SG&A (10,125) (10,479) (10,951) (11,389) (11,731) (12,083) (12,385) (12,694)

Other (1,234) (1,277) (1,335) (1,388) (1,430) (1,473) (1,509) (1,547)
EBITDA

Depreciation (5,426) (5,687) (5,861)

EBIT

Interest Expense (2,700) (2,400) (2,100)

Interest Income 461 278 136
EBT

Current Tax – – –
Deferred Tax – – –
Total Tax

Net Income

Case Study A Page 5 of 20

 Cash Flow Statement

All figures in USD thousands unless stated 2020A 2021A 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

CASH FROM OPERATIONS

Net Income
Deferred Taxes
Depreciation
Cash From Accounts Receivable (600) (525) (362)
Cash From Inventory (400) (131) (86)
Cash From Accounts Payable (260) 181 114
Subtotal

CASH FROM INVESTING

Capital Expenditure (6,000) (6,500) (6,250)
Subtotal

CASH FROM FINANCING

Change in Long-Term Debt (5,000) (5,000) (5,000)
Change in Revolving Credit Line - - -
Change in Common Equity - - -
Dividends - - -
Subtotal

CASH BALANCE
Beginning of the Year 56,214
Increase / (Decrease)
End of the Year

Case Study A Page 6 of 20

 Balance Sheet

All figures in USD thousands unless stated 2020A 2021A 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

ASSETS

Cash
Accounts Receivable 5,008 5,533 5,895
Inventories 1,892 2,023 2,109
Total Current Assets

Property Plant & Equipment 91,741 92,554 92,943

Total Assets

LIABILITIES

Accounts Payable 3,024 3,205 3,319

Revolving Credit Line – – –
Total Current Liabilities

Deferred Taxes 5,123 5,123 5,123

Long-Term Debt 45,000 40,000 35,000
Total Liabilities

EQUITY

Common Equity 62,150 62,150 62,150

Retained Earnings 19,248 9,245 2,868
Total Shareholders' Equity

Total Liabilities & Equity

Check – – – – – – – –

Case Study A Page 7 of 20

 Revenue Schedule

All figures in USD thousands unless stated 2020A 2021A 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

OPERATIONS

Sales Volume Growth 10.8% 9.5% – – – – –

Sales Volume (Units/Day) 1,195 1,324 1,450 1,450 1,450 1,450 1,450 1,450
Plant Capacity (Units/Day) 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Operational Efficiency 59.8% 66.2% 72.5% 72.5% 72.5% 72.5% 72.5% 72.5%

VOLUME

Days in Period 365 365 365 365 365 365 365 365
Sales Volume (Units/Day) 1,195 1,324 1,450 1,450 1,450 1,450 1,450 1,450
Sales Volume (Units) 436,175 483,260 529,250 529,250 529,250 529,250 529,250 529,250

PRICING

Pricing Increases 7.7% 7.1% – – – – –

Unit Price (USD/Unit) 65.00 70.00 75.00 75.00 75.00 75.00 75.00 75.00

REVENUE

Sales Volume (Units) 436,175 483,260 529,250 529,250 529,250 529,250 529,250 529,250
Sales Price (USD/Unit) 65.00 70.00 75.00 75.00 75.00 75.00 75.00 75.00
Revenue 28,351 33,828 39,694 39,694 39,694 39,694 39,694 39,694

Operational Capacity Exceeded? No No No No No No No No

Case Study A Page 8 of 20

 Cost Schedule

All figures in USD thousands unless stated 2020A 2021A 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

Sales Volume 436,175 483,260 529,250 529,250 529,250 529,250 529,250 529,250
Inflation 2.5% 3.5% 4.5% 4.0% 3.0% 3.0% 2.5% 2.5%

VARIABLE COSTS

Materials (USD/Unit) 8.75 9.43 10.07 10.47 10.79 11.11 11.39 11.67
Packaging (USD/Unit) 0.73 0.80 0.83 0.86 0.89 0.92 0.94 0.96
Subtotal 9.48 10.23 10.90 11.34 11.68 12.03 12.33 12.64

Materials 3,817 4,557 5,330 5,543 5,709 5,880 6,027 6,178

Packaging 318 387 439 457 471 485 497 509
Subtotal 4,135 4,944 5,769 6,000 6,180 6,365 6,524 6,687

FIXED COSTS

Labor (USD/Unit) 33.17 30.98 29.56 30.75 31.67 32.62 33.43 34.27
Utilities (USD/Unit) 9.63 9.00 8.59 8.93 9.20 9.47 9.71 9.95
Subtotal 42.80 39.98 38.15 39.68 40.87 42.09 43.14 44.22

Labor 14,466 14,972 15,646 16,272 16,760 17,263 17,694 18,137

Utilities 4,202 4,349 4,545 4,727 4,868 5,014 5,140 5,268
Subtotal 18,668 19,321 20,191 20,998 21,628 22,277 22,834 23,405

SUMMARY

Variable Costs (USD/Unit) 9.48 10.23 10.90 11.34 11.68 12.03 12.33 12.64
Fixed Costs (USD/Unit) 42.80 39.98 38.15 39.68 40.87 42.09 43.14 44.22
Total Costs (USD/Unit) 52.28 50.21 49.05 51.01 52.54 54.12 55.47 56.86

Variable Costs 4,135 4,944 5,769 6,000 6,180 6,365 6,524 6,687
Fixed Costs 18,668 19,321 20,191 20,998 21,628 22,277 22,834 23,405
Total Costs 22,803 24,265 25,960 26,998 27,808 28,642 29,358 30,092

Case Study A Page 9 of 20

 Working Capital Schedule

All figures in USD thousands unless stated 2020A 2021A 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

Days in Period 365 365 365 365 365 365 365 365
Revenue 28,351 33,828 39,694 – – – – –
COGS 22,803 24,265 25,960 – – – – –

AMOUNTS PER DAY

Accounts Receivable (Days) 64 60 54 50 50 50 40 40
Inventory (Days) 30 30 30 30 30 30 30 30
Accounts Payable (Days) 48 48 47 45 45 50 50 55

TOTAL AMOUNTS
Accounts Receivable 5,008 5,533 5,895 – – – – –
Inventory 1,892 2,023 2,109 – – – – –
Accounts Payable 3,024 3,205 3,319 – – – – –

CASH CHANGES
Accounts Receivable (525) (362) 5,895 – – – –
Inventory (131) (86) 2,109 – – – –
Accounts Payable 181 114 (3,319) – – – –
Cash from Working Capital Items (475) (334) 4,685 – – – –

Case Study A Page 10 of 20

 Depreciation Schedule

All figures in USD thousands unless stated 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

Capital Expenditure – – – – –

EXISTING ASSETS 1
Percent of Full Year
Useful Life (Years) 16.00 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
PP&E (End of 2022) 92,943 100% 100% 100% 100% 100%

Percent of Full Year

NEW ASSETS 1
Year Life 2023F 2024F 2025F 2026F 2027F
Useful Life (Years) 20.00 2023F 20.00 50% 100% 100% 100% 100%
First Year Amount 50% 2024F 20.00 – 50% 100% 100% 100%
2025F 20.00 – – 50% 100% 100%
2026F 20.00 – – – 50% 100%
2027F 20.00 – – – – 50%

Amounts for Depreciation

Year Capex Per Yr 2023F 2024F 2025F 2026F 2027F
2023F - - – – – – –
2024F - - – – – – –
2025F - - – – – – –
2026F - - – – – – –
2027F - - – – – – –

TOTAL ASSET DEPRECIATION 2

Existing Assets 5,809 5,809 5,809 5,809 5,809

New Assets – – – – –
Total Depreciation 5,809 5,809 5,809 5,809 5,809

All PP&E and capital expenditure is assumed depreciable (i.e. no land balance). ⁽¹⁾
This schedule calculates depreciation on a straight-line basis. ⁽²⁾

Case Study A Page 11 of 20

 Asset Schedule

All figures in USD thousands unless stated 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

Capital Expenditure – – – – –

First Year Tax Depreciation 50%

Blended Tax Depreciation Rate 25.0%

PROPERTY PLANT & EQUIPMENT 1

Beginning 92,943 87,134 81,325 75,516 69,707

Capital Expenditure – – – – –
Accounting Depreciation (5,809) (5,809) (5,809) (5,809) (5,809)
Ending 92,943 87,134 81,325 75,516 69,707 63,898

TAX BASIS 1

Beginning 46,718 35,039 26,279 19,709 14,782

Capital Expenditure – – – – –
Tax Depreciation (11,680) (8,760) (6,570) (4,927) (3,695)
Ending 46,718 35,039 26,279 19,709 14,782 11,086

Model assumes no dispositions that would impact the PP&E or the Tax Basis. ⁽¹⁾

Case Study A Page 12 of 20

 Income Tax Schedule

All figures in USD thousands unless stated 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

Earnings Before Tax (EBT) – – – – –

Profitable Before Taxes? No No No Yes Yes

Tax Rate 25%

Unused Tax Losses Remaining? Yes

ADJUSTMENT FOR DEPRECIATION

EBT – – – – –
Add: Accounting Depreciation 5,809 5,809 5,809 5,809 5,809
Less: Tax Depreciation (11,680) (8,760) (6,570) (4,927) (3,695)
EBT After Adjustment (5,871) (2,951) (761) 882 2,113

ADJUSTMENT FOR TAX LOSSES 1

EBT After Adjustment (5,871) (2,951) (761) 882 2,113

Less: Use of Tax Losses 2
– – – (882) (2,113)
Taxable Income – – – – –

TAX LOSSES
Beginning 3,711 3,711 3,711 3,711 2,829
Add: New Losses – – – – –
Less: Use of Tax Losses – – – (882) (2,113)
Ending 3,711 3,711 3,711 3,711 2,829 716

TAXES
Current Taxes – – – – –
Deferred Taxes – – – – –
Total Taxes – – – – –

This schedule assumes that tax losses can be carried forward indefinitely into the future. ⁽¹⁾
This schedule assumes losses do not carry back to previous periods to reduce taxable income. ⁽²⁾

Case Study A Page 13 of 20

 Debt Schedule: Part 1

All figures in USD thousands unless stated 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

CASH

Beginning Balance
Increase / (Decrease)
Ending Balance

Interest Rate Circularity 1.0% 1.0% 1.0% 1.0% 1.0%

Interest Income On

LONG TERM DEBT

Beginning Balance 35,000 30,000 25,000 20,000 15,000

Increase / (Decrease) (5,000) (5,000) (5,000) (5,000) (5,000)
Ending Balance 35,000 30,000 25,000 20,000 15,000 10,000

Interest Rate 6.0% 6.0% 6.0% 6.0% 6.0%

Interest Expense 1,950 1,650 1,350 1,050 750

Case Study A Page 14 of 20

 Debt Schedule: Part 2

All figures in USD thousands unless stated 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

AVAILABLE CASH

Beginning Cash Balance

Cash from Operations
Cash from Investing
Change in Long-Term Debt
Change in Common Equity
Dividends
Cash Available for Revolving Credit Line

REVOLVING CREDIT LINE

Beginning Balance
Increase / (Decrease)
Ending Balance

Interest Rate Circularity 5.0% 5.0% 5.0% 5.0% 5.0%

Interest Expense On

Interest Expense
Less: Interest Income
Net Interest Expense

Case Study A Page 15 of 20

 Equity Schedule

All figures in USD thousands unless stated 2022A 2023F 2024F 2025F 2026F 2027F
Model Running: Base Case Drivers

COMMON EQUITY

Beginning Balance 62,150 62,150 62,150 62,150 62,150

Increase / (Decrease) – – – – –
Ending Balance 62,150 62,150 62,150 62,150 62,150 62,150

Net Income
Payout Ratio 25.0% 25.0% 25.0% 25.0% 25.0%
Dividend

RETAINED EARNINGS

Beginning Balance 2,868 2,868 2,868 2,868 2,868

Net Income – – – – –
Dividends – – – – –
Ending Balance 2,868 2,868 2,868 2,868 2,868 2,868

Case Study A Page 16 of 20

What is the EBIT in 2023 when running the Best Case Drivers?

Review Later
(3.840) million

4.410 million
2.085 million
5.218 million

How much does the company pay in Dividends in 2023 when running the Base Case Drivers?
Review Later
(0.367) million
0.655 million
0.000 million
34.000 million

What is the Net Income in 2027 when running the Worst Case Drivers?
Review Later
(6.529) million
(9.565) million
16.409 million
11.422 million

What is the Cash From Operations in 2026 when running the Base Case Drivers?
Review Later
(79.000) million
18.942 million
23.244 million
19.128 million

What is the amount of Deferred Taxes on the Balance Sheet in 2025 when running the Base Case Driv
Review Later
7.874 million
8.498 million
5.123 million
8.059 million

What is the Enterprise Value of the target company using the Average EV / EBITDA multiple and the L
Review Later
656.071 million
522.336 million
656.282 million
510.369 million

What is the Revenue in 2025 when running the Base Case Drivers?
Review Later
63.971 million
61.833 million
64.331 million
58.013 million

What is the Unlevered Free Cash Flow in the Terminal Year when running the Base Case Drivers?
Review Later
20.403 million
15.957 million
8.486 million
15.717 million

What is the Enterprise Value using XNPV Function when running the Base Case Drivers (Perpetuity Me
Review Later
181.044 million
225.020 million
107.886 million
181.147 million

What is the Equity Value Per Share when running the Base Case Drivers (Perpetuity Method)?
Review Later
9.57 per share
8.36 per share
6.42 per share
3.19 per share

What are the Total Costs in 2027 when running the Base Case Drivers?
Review Later
30.604 million
30.187 million
31.491 million
30.879 million

What is the Enterprise Value using Manual Method when running the Base Case Drivers (Terminal Mul
Review Later
217.944 million
183.067 million
182.932 million
125.899 million
se Case Drivers?

unning the Base Case Drivers?

EBITDA multiple and the LTM EBITDA (using Precedent Transaction Analysis)?
e Base Case Drivers?

ase Drivers (Perpetuity Method)?

petuity Method)?

ase Drivers (Terminal Multiple Method)?