Financial Analysis & Forecasting

Purpose of Spreadsheet: Revised: 11/22/2019 active

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To illustrate concepts related to financial analysis and forecasting. Wksh5
The financial analysis uses a combination of ratios and industry averages to Wksh7
evaluate the financial performance of the company. Trend line graphs are also Wksh9
generated, comparing the company's performance with the industry averages. Wksh11
Finally, the historical information is used to prepare a set of pro forma Wksh13
financial statements using both linear and non-linear functions. Wksh15

Required Inputs:

You will need to collect financial statements for several reporting periods. If you
want to benchmark the performance against the industry, then you will also need
to collect industry averages. The spreadsheet is setup to capture five reporting
periods (annual, quarterly, monthly). All input fields are highlighted in yellow.
For best results, SEC Filings are suggested since these reports provide more
detail than published financial statements.

Note: A small red triangle in the upper right corner of a cell indicates that a comment has
been inserted. Point your mouse over the cell and the comment will appear.

If a cell appears in red, this indicates a warning concerning a calculation.

Worksheets:

This spreadsheet consists of the following worksheets, divided into three sections:

A) Input Worksheets for financial analysis using historical data:

Worksheet Title Purpose

2 General Input Enter general information here - used on several worksheets.
3 Balance Sheet Enter comparative balances sheets for up to five periods.
4 Income Statement Enter comparative income statements for up to five periods.
5 Cash Flow Statement Enter comparative cash flow statements for up to five periods.

Caution: If you enter less than five years of historical information, certain worksheet
formulas may have to be revised.

B) Output Worksheets for evaluating financial performance:

6 Key Financial Data
7 Ratio Analysis
8 Benchmark Analysis
9 Horizontal Analysis
10 Vertical Analysis
Calculates key financial information for further analysis.
Calculates a series of ratios for further analysis.
Compare ratio analysis to industry averages.
Horizontal analysis with corresponding trend lines.
Common size financials in percentages and graphs.

C) Pro Forma / Forecasted Financials for Budgeting:

11 Pro Forma - Simple Set of pro forma financials using simple assumptions
 12 Pro Forma - Regression Set of pro forma financials using linear trending
13 Pro Forma - Exponential Set of pro forma financials using exponential smoothing
14 Scenario Analysis Example of Scenario Analysis and Goal Seek Analysis
15 Budget Analysis Preliminary budget analysis
16 Final Budgets Set of budgets per various assumptions and forecasts.

Note: Some additional worksheets (Answer Reports 1 & 2) may appear in the spreadsheet
due to the running of Solver.
Macros:

No macros have been used in this spreadsheet to give everyone some assurance that no viruses
are contained in the spreadsheet. However, you are free to add your own macros to save time.
Tools > Macro > Record New Macro

Excel Functions:

This spreadsheet uses certain financial functions (such as =TREND) which might not be
found in your version of Microsoft Excel. To take full advantage of financial and statistical
functions, you should install the Add On package titled: Analysis TookPak. Go to the main
tool bar, select Tools => Add-Ins => check the Analysis TookPak option, insert your
Excel CD and install the Analysis ToolPak. Also, you might want to install the Solver
Add-in since this is useful for solving special forecasting issues (such as finding the
optimal exponential factor).

Compatibility:

This spreadsheet was created with Microsoft Excel 2000. Older versions of Excel (such as 97)
may not be compatible with this spreadsheet.
 Wksh2
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Wksh12 Submitted by:
Wksh14
Wksh16 S004 Anand Mishra
S010 Chanchal Kalra
S043 Parveen K Sharma
S044 Piyush Gaur

sed on several worksheets.

s for up to five periods.
ents for up to five periods.
ments for up to five periods.

certain worksheet

n for further analysis.

ther analysis.

ding trend lines.

ages and graphs.

mple assumptions
near trending
xponential smoothing
Goal Seek Analysis

ptions and forecasts.

spreadsheet
:
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 General Input Panel Home
The following general information should be entered: Wksh3
Note: Sample data has been entered in the input cells to help you get started. Wksh5
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2-1 Name of Company => Tata Consultancy Services Wksh9
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2-2 Reporting Periods => Annual (Annual, Semi-annual, Quarterly or Monthly) Wksh13
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2-3 Number of Days in Reporting Period are 365

What reporting periods will be entered?

2-4 Most Current Period 2020 (2013, July 2013, 6/30/97, etc.)
2-5 Previous Period 2019 (2013, July 2013, 6/30/97, etc.)
2-6 2nd Previous Period 2018 (2013, July 2013, 6/30/97, etc.)
2-7 3rd Previous Period 2017 (2013, July 2013, 6/30/97, etc.)
2-8 4th Previous Period 2016 (2013, July 2013, 6/30/97, etc.)

2-9 Number of historical periods to be analyzed 5

How are the amounts expressed in the financial statements?

(such as: in millions of dollars, thousands of Canadian dollars, etc.)
2-10 crores of rupee
active
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Balance Sheet for
Tata Consultancy Services
crores of rupee
Annual Annual Annual Annual Annual
Period Period Period Period Period
Description 2016 2017 2018 2019 2020
Cash and Cash Equivalents 4,383 790 1,278 3,327 3,852
Short Term Marketable Securities 0 0 0 0 0
Accounts Receivable 19,058 16,582 18,882 24,029 28,660
Investments 24,876 43,959 40,075 40,871 33,928
Inventory 9 21 25 10 5
Other Current Assets 5,051 7,090 7,962 10,795 12,749
Total Current Assets 53,377 68,442 68,222 79,032 79,194

Fixed Assets 9,056 9,214 9,430 9,522 9,835

Capital Work in-progress 1,640 1,477 1,238 834 781
Accumulated Depreciation 0 0 0 0 0
Net Fixed Assets 10,696 10,691 10,668 10,356 10,616
Longterm Investments 2,229 2,201 2,186 2,189 2,189
Investments in Other Companies 2,432 6 1,503 2 2
Deffered Tax Assets [Net] 2,530 2,447 3,051 2,097 2,219
Intangibles and Other Assets 6,153 5,971 5,426 5,824 10,755
Total Non Current Assets 24,040 21,316 22,834 20,468 25,781
Total Assets 77,417 89,758 91,056 99,500 104,975

Accounts Payable 5,370 4,190 4,775 7,692 8,734

Short Term Borrowings 113 200 181 0 0
Short Term Portion of LT Debt 0 0 0 0 0
Short Term Provisions 115 66 171 174 235
Other Current Liabilities 5,711 6,245 8,931 11,030 15,057
Total Current Liabilities 11,309 10,701 14,058 18,896 24,026

Longterm Debt / Borrowings 50 44 39 0 0

Prepared by Matt H. Evans 11/06/2020 Page 8

Balance Sheet for
Tata Consultancy Services
crores of rupee
Annual Annual Annual Annual Annual
Period Period Period Period Period
Description 2016 2017 2018 2019 2020
Long Term Provisions 40 39 26 0 0
Deffered Tax Libalities [Net] 366 314 424 339 347
Other Longterm Liabilities 639 638 643 1,367 6,234
Total Non Current Liabilities 1,095 1,035 1,132 1,706 6,581
Total Liabilities 12,404 11,736 15,190 20,602 30,607

Preferred Equity 0 0 0 0 0
Common Equity 197 197 191 375 375
Additional Paid in Capital 0 0 0 0 0
Retained Earnings 64,816 77,825 75,675 78,523 73,993
Adj for Foreign Currency Transl 0 0 0 0 0
Treasury Stock 0 0 0 0 0
Total Shareholder Equity 65,013 78,022 75,866 78,898 74,368

Total Liabilities & Equity 77,417 89,758 91,056 99,500 104,975

Check: Assets = Liab + Equity ? 0 0 0 0 0

Comment => Balances Balances Balances Balances Balances

NonDepreciable Fixed Assets 0 0 0 0 0

Deferred Taxes 0 0 0 0 0
Goodwill Write Off 0 0 0 0 0
No of Common Shares o/s 197 197 191 375 375
Par Value of Common Stock ₹ 1.00 ₹ 1.00 ₹ 1.00 ₹ 1.00 ₹ 1.00
No of Preferred Shares o/s 0 0 0 0 0
Par Value of Preferred Stock

Prepared by Matt H. Evans 11/06/2020 Page 9

Balance Sheet for
Tata Consultancy Services
crores of rupee
Annual Annual Annual Annual Annual
Period Period Period Period Period
Description 2016 2017 2018 2019 2020
Market Price of Common Stock ₹ 22.65 ₹ 28.90 ₹ 37.05 ₹ 33.60 ₹ 29.40
Market Price of Preferred Stock ₹ - ₹ - ₹ - ₹ - ₹ -
Preferred Dividends in Arrears 0 0 0 0 0
Liquidating value of Preferred Stk 0 0 0 0 0
Book Value per Share ₹ 330.02 ₹ 396.05 ₹ 397.20 ₹ 210.39 ₹ 198.31
Dividends per Common Share ₹ 48.12 ₹ 55.57 ₹ 56.16 ₹ 74.20 ₹ 100.36
Dividend Payout Ratio 41.08% 46.25% 42.49% 92.55% 113.15%
Cash Dividends to Preferred Stock 0 0 0 0 0
Cash Dividends to Common Stock 9,479 10,947 10,726 27,825 37,634
Total Dividends Paid 9,479 10,947 10,726 27,825 37,634

Prepared by Matt H. Evans 11/06/2020 Page 10

Income Statement for
Tata Consultancy Services
crores of rupee
Annual Annual Annual Annual Annual
Period Period Period Period Period
Description 2016 2017 2018 2019 2020
Net Sales 85,864 92,693 97,356 123,170 131,306
Other Operating Revenues 3,757 4,568 5,803 7,627 8,082
Total Revenues 89,621 97,261 103,159 130,797 139,388
Cost of Goods Sold (43,892) (51,465) (55,182) (63,266) (69,946)
Other Operating Expenses (16,390) (15,730) (16,046) (26,826) (27,451)
Total Direct Expenses (60,282) (67,195) (71,228) (90,092) (97,397)
Selling, General & Administrative 0 0 0 0 0
Operating Income 29,339 30,066 31,931 40,705 41,991

Interest Expenses 0 0 0 0 0
Foreign Exchange (Loss) Gain 0 0 0 0 0
Associated Company (Loss) Gain 0 0 0 0 0
Other NonOperating (Loss) Gain 0 17 0 0 0
Income Tax Expense (6,264) (6,413) (6,690) (10,640) (8,731)
Reserve Charges 0 0 0 0 0
Income Before Extra Ord Items 23,075 23,670 25,241 30,065 33,260

Extra Ordinary Items (Loss) Gain 0 0 0 0 0

Tax Effects of Extraordinary Items 0 0 0 0 0
Minority Interests 0 0 0 0 0
Net Income 23,075 23,670 25,241 30,065 33,260

Primary EPS ₹ 117.13 ₹ 120.15 ₹ 132.15 ₹ 80.17 ₹ 88.69

Earnings Before Int & Taxes 29,339 30,083 31,931 40,705 41,991
Depreciation & Amortization (1,459) (1,575) (400) (450) (460)
Research & Devel Expenses 0 0 0 0 0
Capitalized Interest Expense (16) (19) (33) (39) (30)
Interest Income 4 6 11 19 27

Prepared by Matt H. Evans 11/06/2020 Page 11

Income Statement for
Tata Consultancy Services
crores of rupee
Annual Annual Annual Annual Annual
Period Period Period Period Period
Description 2016 2017 2018 2019 2020
Total Non Operating Expenses (6,264) (6,396) (6,690) (10,640) (8,731)
Total Extra Ordinary Items 0 0 0 0 0
Tax Rate 21.35% 21.33% 20.95% 26.14% 20.79%

Prepared by Matt H. Evans 11/06/2020 Page 12

Cash Flow Statement for
Tata Consultancy Services
crores of rupee
Annual Annual Annual Annual Annual
Period Period Period Period Period
Description 2016 2017 2018 2019 2020

Net Income 23,075 23,670 25,241 30,065 33,260

Depreciation and Amortization 1,459 1,575 400 1,716 2,701
(Increase) Decrease Defer Taxes 0 0 0 0 0
(Gain) Loss on Sale of Assets (6,548) 13,560 (7,631) (1,811) (14,326)
(Increase) Decrease Current Assets 0 (15,065) 220 (10,810) (162)
Increase (Decrease) Current Liab 0 (608) 3,357 4,838 5,130
Cash Flow from Operations 17,986 23,132 21,587 23,998 26,603

Capital Expenditures (1,765) (2,750) (3,880) (5,220) (4,108)

Acquisition in Other Co's 0 0 0 0 0
Proceeds from Sales of Assets 15,953 35 0 13,208 19,496
Purchases of Investments (113,968) (1,979) (1,801) (2,314) (2,609)
Sale of Investments 94,410 129 0 221 50
Other Investment Activities 852 (11,217) 11,315 (12) 0
Cash Provided (Used) from Investmts (4,518) (15,782) 5,634 5,883 12,829

Proceeds from Borrowings 1,070 1,044 1,460 1,880 1,105

Payments on Borrowings (1,112) (650) (1,613) (801) (961)
Dividends Paid to Shareholders (9,586) (10,947) (10,726) (27,825) (37,634)
Proceeds from Minority Interest 5 12 7 7 8
Issue Stock / Exercise Options 195 1 139 13 6
Purchase / Retire Common Stock 0 0 (16,000) 0 0
Other Financing Activities (118) (403) 0 (1,106) (1,431)
Cash Provided (Used) from Financing (9,546) (10,943) (26,733) (27,832) (38,907)

Increase (Decrease) to Cash 3,922 (3,593) 488 2,049 525

Prepared by Matt H. Evans 11/06/2020 Page 13

Cash Flow Statement for
Tata Consultancy Services
crores of rupee
Annual Annual Annual Annual Annual
Period Period Period Period Period
Description 2016 2017 2018 2019 2020
Beginning Cash Balance 461 4,383 790 1,278 3,327
Ending Cash Balance 4,383 790 1,278 3,327 3,852
Check: Should agree to Balance Sheet 0 0 0 0 0
Comment => Balances Balances Balances Balances Balances

Prepared by Matt H. Evans 11/06/2020 Page 14

Key Financial Data for
Tata Consultancy Services
crores of rupee
Annual Annual Annual Annual Annual
Period Period Period Period Period
Description 2016 2017 2018 2019 2020
EBITDA :
Income before ExtraOrd Items 23,075 23,670 25,241 30,065 33,260
Interest Expense 0 0 0 0 0
Capitalized Interest Expense 16 19 33 39 30
Income Tax Expense 6,264 6,413 6,690 10,640 8,731
Reserve Charges 0 0 0 0 0
Depreciation and Amortization 1,459 1,575 400 450 460
EBITDA 30,814 31,677 32,364 41,194 42,481

EBITDA Margin 36% 34% 33% 33% 32%

Free Cash Flow:

Operating Cash Flow 17,986 23,132 21,587 23,998 26,603
Investment Cash Flows (4,518) (15,782) 5,634 5,883 12,829
Preferred Dividends Paid (fixed) 0 0 0 0 0
Redemption of Fixed Obligations (1,112) (650) (1,613) (801) (961)
Other Critical Outlays (35) (45) (42) (30) (25)
Free Cash Flow 12,321 6,655 25,566 29,050 38,446

Working Capital:
Current Assets 53,377 68,442 68,222 79,032 79,194
Current Liabilities 11,309 10,701 14,058 18,896 24,026
Working Capital 42,068 57,741 54,164 60,136 55,168

Liquid Capital:
Cash and Cash Equivalents 4,383 790 1,278 3,327 3,852
Marketable Securities 0 0 0 0 0
Accounts Receivable 19,058 16,582 18,882 24,029 28,660
Notes Receivable 0 0 0 0 0
Total Current Liabilities (11,309) (10,701) (14,058) (18,896) (24,026)
Long Term Debt (50) (44) (39) 0 0
Preferred Equity 0 0 0 0 0
Liquid Capital 12,082 6,627 6,063 8,460 8,486

The following valuation indicators are very simple and basic; they are used as quick, rough estmates.

Market Capitalization:
Market Cap - Common Stk $4,462 $5,693 $7,077 $12,600 $11,025
Market Cap - Preferred Stk $0.00 $0.00 $0.00 $0.00 $0.00
Total Market Capitalization $4,462 $5,693 $7,077 $12,600 $11,025

Present Value:
Normalized Cash Flow Weight %'s 5.00% 10.00% 15.00% 30.00% 40.00%
Key Financial Data for
Tata Consultancy Services
crores of rupee
Annual Annual Annual Annual Annual
Period Period Period Period Period
Description 2016 2017 2018 2019 2020
Normalized Cash Flow 29,210
Number of Future Periods 15
Required Rate of Return 11.00%
Present Value of Free Cash Flow $210,044
Present Value of Selling Price $315,000 <= estimated selling price $65,836
Present Value of Business $275,881

Revenue Multiplier:
Recent Gross Revenues 139,388
Average Competitive Rev Multiplier 3.14
Value based on Revenue Multiple ₹ 437,678.32

Capitalization of Earnings:
Normalized Net Income Weights % 5.00% 5.00% 25.00% 30.00% 35.00%
Normalized Net Income 29,308
Capitalization Rate 12.00%
Nominal Growth Rate 3.50%
Net Capitalization Rate 8.50%
Value based on Earnings ₹ 344,800

Operating Leverage 0.35 0.43 1.03 0.47

Financial Leverage 0.92 4.60 (1.44) 3.40

Total Leverage 0.32 1.99 (1.48) 1.61

Check Totals 0.00 0.32 1.99 (1.48) 1.61

Ratio Analysis for
Tata Consultancy Services

Annual Annual Annual Annual Annual

Period Period Period Period Period
Title of Ratio 2016 2017 2018 2019 2020

Acid Test Ratio 2.07 1.62 1.43 1.45 1.35

Current Ratio 4.72 6.40 4.85 4.18 3.30

Operating Cash Flow to Net Income 0.78 0.98 0.86 0.80 0.80

Liquidity Index:
Cash - Days Removed 0 0 0 0 0
Cash Balance 4,383 790 1,278 3,327 3,852
Cash Balance Total 0 0 0 0 0
Marketable Sec - Days Removed 11 12 16 15 14
Marketable Securities Balance 0 0 0 0 0
Marketable Securities Total 0 0 0 0 0
Receivables - Days Removed 34 413 322 338 363
Receivable Balance 19,058 16,582 18,882 24,029 28,660
Receivable Balance Total 640,064 6,847,892 6,086,041 8,111,090 10,399,516
Inventory - Days Removed 79 0 0 0 0
Inventory Balance 9 21 25 10 5
Inventory Balance Total 714 2 4 1 0
Other - Days Removed 16 22 26 21 19
Other Current Assets Balance 5,051 7,090 7,962 10,795 12,749
Other Current Assets Total 80,816 155,980 207,012 226,695 242,231
Liquidity Index (Days) 25 286 224 218 235

Z Score:
1.2 x (working capital / total assets) 0.65 0.77 0.71 0.73 0.63
1.4 x (retained earn / total assets) 1.17 1.21 1.16 1.10 0.99
3.3 x (EBIT / total assets) 1.25 1.11 1.16 1.35 1.32
.6 x (market value equity / b.v. debt) 53.54 77.64 108.87 #DIV/0! #DIV/0!
.999 x (sales / total assets) 1.11 1.03 1.07 1.24 1.25
Z Score 57.73 81.76 112.97 #DIV/0! #DIV/0!

Receivable Turnover:
Credit Sales 11,520 15,750 20,080 23,200 26,500
Average Receivable Balance 1,060 17,820 17,732 21,456 26,345
Receivable Turnover 10.9 0.9 1.1 1.1 1.0

Days Required to Collect A/R 34 413 322 338 363

Inventory Turnover:
Average Inventory Balance 1,046 15 23 18 8
Inventory Turnover 4.6 3,431.0 2,399.2 3,615.2 9,326.1

Days in Inventory 79 0 0 0 0

Total Asset Turnover 1.1 1.0 1.1 1.2 1.3

Ratio Analysis for
Tata Consultancy Services

Annual Annual Annual Annual Annual

Period Period Period Period Period
Title of Ratio 2016 2017 2018 2019 2020

Operating Assets Ratio 0.83 0.88 0.87 0.90 0.86

Gross Profit Margin 49% 44% 43% 49% 47%

Operating Margin 34% 32% 33% 33% 32%

Net Profit Margin 26% 24% 24% 23% 24%

Direct Cost to Operating Revenues 67% 69% 69% 69% 70%

Capitalization Rate / Asset Return:

Net Operating Income 23,075 23,653 25,241 30,065 33,260
Total Investments / Operating Assets 64,073 79,133 78,890 89,388 89,810
Capitalization Rate / Return 36.01% 29.89% 32.00% 33.63% 37.03%

Return on Shareholder Equity 35% 30% 33% 38% 45%

Debt to Total Assets 0.16 0.13 0.17 0.21 0.29

Debt to Common Equity 0.19 0.15 0.20 0.26 0.41

Times Interest Earned #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Price to Earnings (P/E) 0.2 0.2 0.3 0.4 0.3

Price to Book Value 0.1 0.1 0.1 0.2 0.1

Stock Yield 212.44% 192.28% 151.57% 220.83% 341.35%

Home Wksh2 Benchmark Analysis for
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Wksh7 active You need to collect benchmark data on the respective industry for the subject company.
Wksh9 Wksh10 Enter the benchmark data in the appropriate input cells. This information is used to
Wksh11 Wksh12 generate trend line graphs in this worksheet. If you do not have any benchmark data,
Wksh13 Wksh14 then fill in the highlighted yellow cell with numeric zero "0". The "industry" line will be null
Wksh15 Wksh16 in the graph and show only the company specific ratio trend.

Annual Annual Annual

Period Period Period
Ref Description 2016 2017 2018

8-1 Acid Test Ratio - Industry 0.51 0.52 0.50

7-1 Acid Test Ratio - Company 2.07 1.62 1.43

8-2 Current Ratio - Industry 1.12 1.10 1.05

7-2 Current Ratio - Company 4.72 6.40 4.85

8-3 Receivable Turnover - Industry 8.50 8.70 8.40

7-21 Receivable Turnover - Company 10.87 0.88 1.13

8-4 Days to Collect A/R - Industry 41 39 40

7-22 Days to Collect A/R - Company 34 413 322

8-5 Inventory Turnover - Industry 4.40 4.45 4.20

7-25 Inventory Turnover - Company 4.60 3431.00 2399.22

8-6 Days in Inventory - Industry 86 88 81

7-26 Days in Inventory - Company 79 0 0

8-7 Asset Turnover - Industry 1.60 1.55 1.62

7-27 Asset Turnover - Company 1.11 1.03 1.07

8-8 Gross Profit Margin - Industry 55.00% 52.00% 60.00%

7-29 Gross Profit Margin - Company 48.88% 44.48% 43.32%

8-10 Net Profit Margin - Industry 20.00% 23.00% 22.00%

7-31 Net Profit Margin - Company 25.75% 24.34% 24.47%

8-11 Return on Total Assets - Industry 38.00% 36.00% 37.00%

8-12 Return on Total Assets - Company 30.00% 28.32% 27.92%

8-13 Return on Equity - Industry 26.00% 22.00% 24.00%

8-14 Return on Equity - Company 35.49% 30.34% 33.27%

8-15 Debt to Equity - Industry 35% 38% 31%

7-38 Debt to Equity - Company 19% 15% 20%
8-16 Times Interest Earned - Industry 40 38 36
7-39 Times Interest Earned - Company #DIV/0! #DIV/0! #DIV/0!

We added the following two ratios to assess if the Company has excessive growth:
4-13 Provision for Taxes (6,264) (6,413) (6,690)
8-17 Trading Ratio - Company 0.18 0.15 0.15
8-18 Trading Ratio - Industry 1.26 1.28 1.31

8-19 Net Sales to Net Worth - Company 1.46 1.29 1.41

8-20 Net Sales to Net Worth - Industry 1.22 1.20 1.19

Source for Benchmark Data: Almanac of Business and Industrial Financial Ratios by Leo Troy, Prentice Ha

Graphs appear below for each of the above comparisons:

Acid Ratio Comparison

2.50
Ratio

2.00
Acid Test Ratio -
1.50 Industry
Acid Test Ratio -
1.00 Company

0.50

0.00
2016 2017 2018 2019 2020
Periods

Current Ratio Comparison

7.00
Ratio

6.00
5.00 Current Ratio -
Industry
4.00
Current Ratio -
3.00 Company
2.00
1.00
0.00
2016 2017 2018 2019 2020
Periods
 Current Ratio -
3.00
Company
2.00
1.00
0.00
2016 2017 2018 2019 2020
Periods

Turnover Rate Receivable Turnover Comparison

12.00
10.00
Receivable Turnover
8.00 - Industry

6.00
Receivable Turnover
4.00 - Company

2.00
0.00
2016 2017 2018 2019 2020
Periods
D a y s to C o lle c t A /R

Receivable Collection Comparison

450
400
350
Days to Collect A/R -
300 Industry
250
200 Days to Collect A/R -
Company
150
100
50
0
2016 2017 2018 2019 2020
Periods
Turnover Rate

Inventory Turnover Comparison

10000.00
8000.00
Inventory Turnover -
6000.00 Industry
Inventory Turnover -
4000.00 Company

2000.00
Turnover
Inventory Turnover Comparison
10000.00
8000.00
Inventory Turnover -
6000.00 Industry
Inventory Turnover -
4000.00 Company

2000.00

0.00
2016 2017 2018 2019 2020
Periods
D ays H eld in Inventory

Inventory Days Comparison

100

80
Days in Inventory -
60 Industry
Days in Inventory -
40 Company

20
0
2016 2017 2018 2019 2020
Periods
Turnover Rate

Asset Turnover Comparison

1.80
1.60
1.40
Asset Turnover -
1.20 Industry
1.00
0.80 Asset Turnover -
Company
0.60
0.40
0.20
0.00
2016 2017 2018 2019 2020
Periods
G ro s s P ro fit M a rg in

Gross Profit Margin

G ro s s P ro fit M a rg in
Gross Profit Margin
70.00%
60.00%
50.00% Gross Profit Margin -
Industry
40.00%
30.00% Gross Profit Margin -
Company
20.00%
10.00%
0.00%
2016 2017 2018 2019 2020
Periods
N et P rofit Margin

Net Profit Margin

30.00%
25.00%
Net Profit Margin -
20.00% Industry
15.00% Net Profit Margin -
Company
10.00%
5.00%
0.00%
2016 2017 2018 2019 2020
Periods
R e tu rn o n T o ta l A s s e ts

Return on Total Assets

40.00%
35.00%
30.00% Return on Total
25.00% Assets - Industry
20.00% Return on Total
15.00% Assets - Company
10.00%
5.00%
0.00%

Periods
 40.00%

Re
35.00%
30.00% Return on Total
25.00% Assets - Industry
20.00% Return on Total
15.00% Assets - Company
10.00%
5.00%
0.00%

Periods

R e tu rn o n C o m m o n E q u ity

Return on Equity Comparison

40.00%
35.00%
30.00% Return on Total
Assets - Industry
25.00%
20.00% Return on Total
15.00% Assets - Company
10.00%
5.00%
0.00%

Periods
D e b t to E q u ity R a tio

Debt to Equity Comparison

45%
40%
35% Debt to Equity -
30% Industry
25%
Debt to Equity -
20% Company
15%
10%
5%
0%
2016 2017 2018 2019 2020
Periods
T im e s In te re s t E a rn e d

Times Interest Earned

44
42
40 Times Interest
Earned - Industry
38
Times Interest
 T im e s In te re s t E
Times Interest Earned
44
42
40 Times Interest
Earned - Industry
38
Times Interest
36 Earned - Company
34
32
2016 2017 2018 2019 2020
Periods

Trading Ratio Comparison

1.60
1.40
Ratio

1.20
Trading Ratio -
1.00 Industry
0.80 Trading Ratio -
0.60 Company
0.40
0.20
0.00
2016 2017 2018 2019 2020
Periods

Sales to Worth Comparison

3.50
3.00
Ratio

2.50 Net Sales to Net

2.00 Worth - Industry
Net Sales to Net
1.50 Worth - Company
1.00
0.50
0.00
2016 2017 2018 2019 2020
Periods
 Net Sales to Net
1.50 Worth - Company
1.00
0.50
0.00
2016 2017 2018 2019 2020
Periods
 ubject company.
n is used to
nchmark data,
y" line will be null

Annual Annual
Period Period
2019 2020

0.49 0.48
1.45 1.35

1.08 1.07
4.18 3.30

8.20 8.30
1.08 1.01

41 41
338 363

4.30 4.38
3615.20 9326.13

89 82
0 0

1.68 1.69
1.24 1.25

62.00% 63.00%
48.64% 46.73%

19.00% 20.00%
22.99% 23.86%

34.00% 36.00%
31.56% 32.53%

19.00% 20.00%
38.11% 44.72%

34% 32%
26% 41%
 39 43
#DIV/0! #DIV/0!

(10,640) (8,731)
0.15 0.16
1.30 1.27

1.80 2.00
1.22 1.20

cial Ratios by Leo Troy, Prentice Hall

Acid Test Ratio -

Industry
Acid Test Ratio -
Company

Current Ratio -
Industry
Current Ratio -
Company
 Current Ratio -
Company

ison

Receivable Turnover
- Industry

Receivable Turnover
- Company

rison

ays to Collect A/R -

dustry
ays to Collect A/R -
ompany

son

nventory Turnover -
ndustry
nventory Turnover -
Company
son

nventory Turnover -
ndustry
nventory Turnover -
Company

on

Days in Inventory -
Industry
Days in Inventory -
Company

on

Asset Turnover -
Industry
Asset Turnover -
Company
 ross Profit Margin -
ndustry
ross Profit Margin -
ompany

Net Profit Margin -

Industry
Net Profit Margin -
Company

Return on Total
Assets - Industry
Return on Total
Assets - Company
 Return on Total
Assets - Industry
Return on Total
Assets - Company

son

Return on Total
Assets - Industry
Return on Total
Assets - Company

Debt to Equity -
Industry
Debt to Equity -
Company

Times Interest
Earned - Industry
Times Interest
Times Interest
Earned - Industry
Times Interest
Earned - Company

Trading Ratio -
Industry
Trading Ratio -
Company

on

Net Sales to Net

Worth - Industry
Net Sales to Net
Worth - Company
Net Sales to Net
Worth - Company
Horizontal Analysis for
Tata Consultancy Services

Horizontal Analysis expresses change between periods as percentages for each account in
the financial statements. The basic formula for horizontal analysis is:
% change = (most recent period - previous period) / previous period

Annual Annual Annual Annual Annual

Period Period Period Period Period
Description 2016 2017 2018 2019 2020

Growth in Net Sales 32.50% 7.95% 5.03% 26.52% 6.61%

Cost of Goods Sold 29.00% 17.25% 7.22% 14.65% 10.56%

Growth in Gross Profits 2.90% -9.01% -2.60% 12.27% -3.92%

Growth in Interest Expense 16.50% #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Growth in Income Tax Expense 12.90% 2.38% 4.32% 59.04% -17.94%

Growth in Non Operating Expenses 3.80% 2.11% 4.60% 59.04% -17.94%

Growth in Minority Interest 96.00% #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Growth in Net Income 33.50% 2.58% 6.64% 19.11% 10.63%

Growth in Earnings Per Share 32.60% 2.58% 9.99% -39.33% 10.63%

Cash and Cash Equivalents 3.08% -81.98% 61.77% 160.33% 15.78%

Short Term Marketable Securities 12.00% #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Accounts Receivable 26.70% -12.99% 13.87% 27.26% 19.27%
Inventory 19.90% 133.33% 19.05% -60.00% -50.00%
Other Current Assets 26.70% 40.37% 12.30% 35.58% 18.10%
Total Current Assets 21.50% 28.22% -0.32% 15.85% 0.20%

Net Fixed Assets 17.80% -0.05% -0.22% -2.92% 2.51%

Longterm Investments 6.20% -1.26% -0.68% 0.14% 0.00%
Investments in Other Companies 0.00% -99.75% 24950.00% -99.87% 0.00%
Intangibles and Other Assets 16.50% -2.96% -9.13% 7.34% 84.67%
Total Non Current Assets 32.50% -11.33% 7.12% -10.36% 25.96%

Growth in Total Assets 1.05% 15.94% 1.45% 9.27% 5.50%

Accounts Payable 26.20% -21.97% 13.96% 61.09% 13.55%

Short Term Borrowings 33.50% 76.99% -9.50% -100.00% #DIV/0!
Short Term Portion of LT Debt 16.70% #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Other Current Liabilities 12.80% 9.35% 43.01% 23.50% 36.51%
Total Current Liabilities 38.02% -5.38% 31.37% 34.41% 27.15%
Longterm Debt / Borrowings 46.00% -12.00% -11.36% -100.00% #DIV/0!
Other Longterm Liabilities 11.30% -0.16% 0.78% 112.60% 356.04%
Total Non Current Liabilities 37.10% -5.48% 9.37% 50.71% 285.76%

Growth in Total Liabilities 31.05% -5.39% 29.43% 35.63% 48.56%

Preferred Equity 0.00% #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Common Equity 2.60% 0.00% -3.05% 96.34% 0.00%
Additional Paid in Capital 1.50% #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Retained Earnings 38.00% 20.07% -2.76% 3.76% -5.77%
Adj for Foreign Currency Transl -166.00% #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Treasury Stock 2.01% #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Growth in Total Equity (Net Worth) 6.11% 20.01% -2.76% 4.00% -5.74%

Sustainable Growth Rate #1 20.91% 16.31% 19.13% 2.84% -5.88%

Sustainable Growth Rate #2 14.58% 14.03% 14.14% 35.27% 50.61%

Growth in Market Capitalization 14.50% 27.59% 24.30% 78.05% -12.50%

.
Tata Consultancy Services

Vertical analysis expresses financial statements as percentages. On the Balance Sheet,

Total Assets is assigned 100% and on the Income Statement, Total Revenues is assigned 100%.

expressed in percentages
Annual Annual Annual Annual Annual
Period Period Period Period Period
Account Title 2016 2017 2018 2019 2020

Cash and Cash Equivalents 5.66% 0.88% 1.40% 3.34% 3.67%

Short Term Marketable Securities 0.00% 0.00% 0.00% 0.00% 0.00%
Accounts Receivable 24.62% 18.47% 20.74% 24.15% 27.30%
Inventory 0.01% 0.02% 0.03% 0.01% 0.00%
Other Current Assets 6.52% 7.90% 8.74% 10.85% 12.14%
Current Assets 68.95% 76.25% 74.92% 79.43% 75.44%

Net Fixed Assets 13.82% 11.91% 11.72% 10.41% 10.11%

Longterm Investments 2.88% 2.45% 2.40% 2.20% 2.09%
Investments in Other Companies 3.14% 0.01% 1.65% 0.00% 0.00%
Intangibles and Other Assets 7.95% 6.65% 5.96% 5.85% 10.25%
Non Current Assets 31.05% 23.75% 25.08% 20.57% 24.56%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00%

Accounts Payable 6.94% 4.67% 5.24% 7.73% 8.32%

Short Term Borrowings 0.15% 0.22% 0.20% 0.00% 0.00%
Short Term Portion of LT Debt 0.00% 0.00% 0.00% 0.00% 0.00%
Other Current Liabilities 7.38% 6.96% 9.81% 11.09% 14.34%
Total Current Liabilities 14.61% 11.92% 15.44% 18.99% 22.89%

Longterm Debt / Borrowings 0.06% 0.05% 0.04% 0.00% 0.00%

Other Longterm Liabilities 0.83% 0.71% 0.71% 1.37% 5.94%
Total NonCurrent Liabilities 0.89% 0.76% 0.75% 1.37% 5.94%

Total Liabilities 16.02% 13.08% 16.68% 20.71% 29.16%

Preferred Equity 0.00% 0.00% 0.00% 0.00% 0.00%

Common Equity 0.25% 0.22% 0.21% 0.38% 0.36%
Additional Paid in Capital 0.00% 0.00% 0.00% 0.00% 0.00%
Retained Earnings 83.72% 86.71% 83.11% 78.92% 70.49%
Adj for Foreign Currency Transl 0.00% 0.00% 0.00% 0.00% 0.00%
Treasury Stock 0.00% 0.00% 0.00% 0.00% 0.00%
Total Equity 83.98% 86.92% 83.32% 79.29% 70.84%

Total Liabilities & Equity 100.00% 100.00% 100.00% 100.00% 100.00%

Total Revenues 100.00% 100.00% 100.00% 100.00% 100.00%

Cost of Goods Sold 48.98% 52.91% 53.49% 48.37% 50.18%

Gross Profit 48.88% 44.48% 43.32% 48.64% 46.73%

Operating Expenses 18.29% 16.17% 15.55% 20.51% 19.69%

Non Operating Expenses 6.99% 6.58% 6.49% 8.13% 6.26%

Income Before Extra Ord Items 25.75% 24.34% 24.47% 22.99% 23.86%

Net Income 25.75% 24.34% 24.47% 22.99% 23.86%

 Annual Annual Annual Annual Annual
Period Period Period Period Period
Enter Your Forecast Periods => 2016 2017 2018 2019 2020

Pro Forma Income Statement

Gross Revenues 156,115 174,848 195,830 219,330 245,649

Growth Assumptions 12.00% 12.00% 12.00% 12.00% 12.00%

Cost of Goods Sold (79,285) (88,799) (99,455) (111,390) (124,756)

Growth Assumptions 50.79% 50.79% 50.79% 50.79% 50.79%

Operating Expenses (28,169) (31,549) (35,335) (39,576) (44,325)

Growth Assumptions 18.04% 18.04% 18.04% 18.04% 18.04%

NonOperating Expenses (3,200) (3,200) (3,600) (3,600) (4,000)

ExtraOrdinary Items 650 650 650 700 700

Net Income 46,110 51,950 58,090 65,464 73,268

Pro Forma Cash Flow Statement

Sources of Operating Cash Flow:

Net Income 46,110 51,950 58,090 65,464 73,268
Depreciation and Amortization 470 490 500 520 550
(Increase) Decrease Defer Taxes 0 0 0 0 0
(Gain) Loss on Sale of Assets 15 9 2 3 6
(Increase) Decrease Current Assets 37,043 (5,058) (5,665) (6,345) (7,106)
Increase (Decrease) Current Liab 30,614 6,557 7,344 8,225 9,212

Operating Cash Flow 114,253 53,947 60,270 67,867 75,930

Investment Sources of Cash Flow:

Planned Sale of Assets 100 60 20 25 35
Planned Sale of Investments 2,200 2,100 1,900 1,800 1,700
Other Investment Sources to be used 0 0 0 0 0
Total Investment Sources of Cash 2,300 2,160 1,920 1,825 1,735

Planned Investments:
Capital Expenditures (3,500) (3,000) (3,100) (2,700) (2,600)
Acquisitions in Other Co's (500) (750) (1,200) (650) (350)
Purchases of Investments (3,000) (3,500) (4,500) (6,000) (7,000)
Total Investment Applications of Cash (7,000) (7,250) (8,800) (9,350) (9,950)

Cash Flow from Financing Activities:

Proceeds from Loans & Debt 1,300 1,000 950 750 650
Proceeds from Minority Interest 20 60 80 90 100
 Annual Annual Annual Annual Annual
Period Period Period Period Period
Enter Your Forecast Periods => 2016 2017 2018 2019 2020

Other Financing Activities 0 0 0 0 0

Total Financing Sources of Cash 1,320 1,060 1,030 840 750

Cash Flow Applied for Financing:

Payments on Loans & Debt (1,500) (1,000) (600) (500) (500)
Dividends Paid to Shareholders (2,500) (3,000) (4,000) (5,500) (7,000)
Purchase / Retire Stock (2,000) (2,000) (1,500) (1,000) (500)
Other Financing Activities 0 0 0 0 0
Total Financing Applications of Cash (6,000) (6,000) (6,100) (7,000) (8,000)

Total Change to Cash 104,873 43,917 48,320 54,182 60,465

Beginning Cash Balance 3,852 108,725 152,642 200,962 255,145

Forecasted Ending Balance 108,725 152,642 200,962 255,145 315,610

Pro Forma Balance Sheet

Cash and Cash Equivalents 108,725 152,642 200,962 255,145 315,610

Short Term Marketable Securities 0 0 0 0 0
Accounts Receivable 15,611 17,485 19,583 21,933 24,565
Inventory 12,489 13,988 15,666 17,546 19,652
Other Current Assets 10,147 11,365 12,729 14,256 15,967
Total Current Assets 146,973 195,480 248,941 308,881 375,794

Fixed Assets 13,335 16,335 19,435 22,135 24,735

Accumulated Depreciation (470) (960) (1,460) (1,980) (2,530)
Net Fixed Assets 12,865 15,375 17,975 20,155 22,205
Longterm Investments 2,989 4,389 6,989 11,189 16,489
Investments in Other Companies 502 1,252 2,452 3,102 3,452
Intangibles and Other Assets 200 240 320 400 650
Total Non Current Assets 16,556 21,256 27,736 34,846 42,796

Total Assets 163,529 216,736 276,677 343,727 418,590

Accounts Payable 26,539 29,724 33,291 37,286 41,760

Short Term Borrowings 18,734 20,982 23,500 26,320 29,478
Short Term Portion of LT Debt 30 30 25 20 15
Other Current Liabilities 9,367 10,491 11,750 13,160 14,739
Total Current Liabilities 54,670 61,227 68,566 76,785 85,992

Longterm Debt / Borrowings (200) (200) 150 400 550

Other Longterm Liabilities 700 750 800 800 800
Total Non Current Liabilities 500 550 950 1,200 1,350

Total Liabilities 55,170 61,777 69,516 77,985 87,342

 Annual Annual Annual Annual Annual
Period Period Period Period Period
Enter Your Forecast Periods => 2016 2017 2018 2019 2020

Preferred Equity 0 0 0 0 0
Common Equity 2,200 2,200 2,200 2,200 2,200
Additional Paid in Capital 5,700 5,700 5,700 5,700 5,700
Retained Earnings 117,603 166,553 220,643 280,607 346,876
Adj for Foreign Currency Transl (5,000) (4,000) (2,500) (1,500) (500)
Treasury Stock (2,000) (4,000) (5,500) (6,500) (7,000)
Total Equity 118,503 166,453 220,543 280,507 347,276

External Financing Required (EFR) (10,145) (11,494) (13,382) (14,766) (16,028)

Home Wksh2 ProForma Financials (Linear Trend Model)
Wksh3 Wksh4 Tata Consultancy Services
Wksh5 Wksh6
Wksh7 Wksh8 A set of pro forma (forecasted) financial statements are generated using the results of
Wksh9 Wksh10 the historical analysis in the previous worksheets. A statistical method known as
Wksh11 active linear regression is used to predict future values. If you have important assumptions
Wksh13 Wksh14 that are important to the forecast, then these assumptions should over-ride the
Wksh15 Wksh16 linear calculations since we want our forecast to be as accurate as possible.
Key Point => If your historical information has gradual trends, then linear regression
is an appropriate model for forecasting. However, if your historical information has
distinct steps up or down, then you should consider using a smoothing model .

Before we adopt a regression model, it's a good idea to generate a scatter graph of the actual data
and observe if there is a clear trend for fitting a straight regression line into the data:
Total R evenues

Total Revenues
150,000

100,000

50,000

Total Revenues
0
2014 2016 2018 2020 2022
Periods

The calculation of linear values is determined by defining the slope of the line and the y intercept:
Order Total Rev Linear
Formula for Linear Trendline: Year variable x actual y Value y
2016 1 89,621 85,431
y=(m*x)+b 2017 2 97,261 98,738
2018 3 103,159 112,045
m: slope of line 2019 4 130,797 125,352
x: independent variable 2020 5 139,388 138,659
b: y intercept 2001 6 151,966
2002 7 165,273
2003 8 178,580
2004 9 191,887
2005 10 205,194

The degree of linear fit with the actual data can be expressed as R Square 0.9322

Annual Annual Annual Annual

Period Period Period Period
 2016 2017 2018 2019

Pro Forma Income Statement

12-1 Gross Revenues 85,431 98,738 112,045 125,352

12-2 Cost of Goods Sold (43,968) (50,359) (56,750) (63,141)

12-3 Operating Expenses 0 0 0 0

12-4 Operating Income 41,463 48,379 55,295 62,211

12-5 Non Operating Expenses (5,909) (6,826) (7,744) (8,662)

4-25 Extra Ordinary Items 0 0 0 0

Net Income 35,554 41,553 47,551 53,549

Pro Forma Cash Flow Statement

Sources of Operating Cash Flow:

Net Income 35,554 41,553 47,551 53,549
Depreciation and Amortization 470 490 500 520
(Increase) Decrease Defer Taxes 0 0 0 0
(Gain) Loss on Sale of Assets 15 9 2 3
(Increase) Decrease Current Assets 56,128 (3,593) (3,593) (3,593)
Increase (Decrease) Current Liab 5,875 4,657 4,657 4,657

Operating Cash Flow 98,042 43,116 49,117 55,137

Investment Sources of Cash Flow:

Planned Sale of Assets 100 60 20 25
Planned Sale of Investments 2,200 2,100 1,900 1,800
Other Investment Sources to be used 0 0 0 0
Total Investment Sources of Cash 2,300 2,160 1,920 1,825

Planned Investments:
Capital Expenditures (3,500) (3,000) (3,100) (2,700)
Acquisitions (500) (750) (1,200) (650)
Purchases of Investments (3,000) (3,500) (4,500) (6,000)
Total Investment Applications of Cash (7,000) (7,250) (8,800) (9,350)

Cash Flow from Financing Activities:

Proceeds from Loans & Debt 1,300 1,000 950 750
Proceeds from Minority Interest 20 60 80 90
Other Financing Activities 0 0 0 0
Total Financing Sources of Cash 1,320 1,060 1,030 840

Cash Flow Applied for Financing:

Payments on Loans & Debt (1,500) (1,000) (600) (500)
Dividends Paid to Shareholders (2,500) (3,000) (4,000) (5,500)
Purchase / Retire Stock (2,000) (2,000) (1,500) (1,000)
Other Financing Activities 0 0 0 0
Total Financing Applications of Cash (6,000) (6,000) (6,100) (7,000)

Total Change to Cash 88,662 33,086 37,167 41,452

Beginning Cash Balance 3,852 92,514 125,600 162,767

Forecasted Ending Balance 92,514 125,600 162,767 204,219

Pro Forma Balance Sheet

Cash and Cash Equivalents 92,514 125,600 162,767 204,219

Short Term Marketable Securities 0 0 0 0
Accounts Receivable 8,543 9,874 11,205 12,535
Inventory 6,834 7,899 8,964 10,028
Other Current Assets 5,553 6,418 7,283 8,148
Total Current Assets 113,444 149,791 190,218 234,930

Fixed Assets 13,335 16,335 19,435 22,135

Accumulated Depreciation (470) (960) (1,460) (1,980)
Net Fixed Assets 12,865 15,375 17,975 20,155
Longterm Investments 2,989 4,389 6,989 11,189
Investments in Other Companies 502 1,252 2,452 3,102
Intangibles and Other Assets 200 240 320 400
Total Non Current Assets 16,556 21,256 27,736 34,846

Total Assets 130,000 171,047 217,954 269,776

Accounts Payable 14,523 16,785 19,048 21,310

Short Term Borrowings 10,252 11,849 13,445 15,042
Short Term Portion of LT Debt 30 30 25 20
Other Current Liabilities 5,126 5,924 6,723 7,521
Total Current Liabilities 29,931 34,588 39,241 43,893

Longterm Debt / Borrowings (200) (200) 150 400

Other Longterm Liabilities 700 750 800 800
Total Non Current Liabilities 500 550 950 1,200

Total Liabilities 30,431 35,138 40,191 45,093

Preferred Equity 0 0 0 0
Common Equity 2,200 2,200 2,200 2,200
Additional Paid in Capital 5,700 5,700 5,700 5,700
Retained Earnings 107,047 145,600 189,151 237,200
Adj for Foreign Currency Transl (5,000) (4,000) (2,500) (1,500)
Treasury Stock (2,000) (4,000) (5,500) (6,500)
Total Equity 107,947 145,500 189,051 237,100
External Financing Required (EFR) (8,378) (9,591) (11,287) (12,417)
 of the actual data

d the y intercept:
Slope Intercept
m factor b factor
13307.00 72124.20

Annual
Period
2020

138,659

(69,532)

69,127

(9,580)

59,547

59,547
550
0
6
(3,593)
4,657

61,168

35
1,700
0
1,735

(2,600)
(350)
(7,000)
(9,950)

650
100
0
750
 (500)
(7,000)
(500)
0
(8,000)

45,703

204,219
249,922

249,922
0
13,866
11,093
9,013
283,893

24,735
(2,530)
22,205
16,489
3,452
650
42,796

326,689

23,572
16,639
15
8,320
48,546

550
800
1,350

49,896

0
2,200
5,700
289,747
(500)
(7,000)
290,147
(13,353)
Home Wksh2 ProForma Financials (Exponential Smoothing / Weighted Moving Average)
Wksh3 Wksh4 Tata Consultancy Services
Wksh5 Wksh6
Wksh7 Wksh8 A set of pro forma (forecasted) financial statements are generated using the results of
Wksh9 Wksh10 the historical analysis in the previous worksheets. A statistical method known as
Wksh11 Wksh12 exponential smoothing is used to plot a trend over historical data. Additionally, we
active Wksh14 can use a weighted moving average to forecast future periods.
Wksh15 Wksh16 Key Point => If you have a general upward historical trend, weighted average will tend
to underestimate forecasted values and vice versa (downward trend = overestimate).

Exponential Smoothing and Weighted Moving Averages for Total Revenues:

Years => 1996 1997 1998
Total Revenues - Historical 89,621 97,261 103,159
Total Revenues - Exponential 89,621 89,621 97,261
Total Revenues - Wt Moving Avg 11,105 15,230 18,890

Smoothing Factor must be between 0 and 1 0 1 Total weights should add

Set Smoothing Factor 1.00
Assign weights to appropriate periods 0.00% 1.50% 4.50%

Find the Optimal Smoothing Factor:

Total Exponent
Revenues Amounts Difference
89,621 89,621 0
97,261 89,621 7,640
103,159 97,261 5,898
130,797 103,159 27,638
139,388 130,797 8,591
Mean Squared Error

Find the Optimal Moving Weights:

Total Weighted
Revenues Amounts Difference
89,621 11,105 78,516
97,261 15,230 82,031
103,159 18,890 84,269
130,797 21,605 109,192
139,388 119,135 20,253
Mean Squared Error
Total Revenues

Exponential Comparison
160,000
140,000
120,000 Total Revenues -
Historical
100,000
Total Revenues -
80,000 Exponential
 Total Revenu
Exponential Comparison
160,000
140,000
120,000 Total Revenues -
Historical
100,000
Total Revenues -
80,000 Exponential
60,000 Total Revenues -
Wt Moving Avg
40,000
20,000
0
2016 2017 2018 2019 2020
Periods

Annual Annual Annual

Period Period Period
2016 2017 2018
Pro Forma Income Statement

Gross Revenues 134,162 135,348 135,053

Cost of Goods Sold (68,136) (69,351) (68,446)

Operating Expenses (24,208) (24,339) (25,101)

Operating Income 41,818 41,658 41,506

NonOperating Expenses (3,200) (3,200) (3,600)

ExtraOrdinary Items 650 650 650

Net Income 39,268 39,108 38,556

Pro Forma Cash Flow Statement

Sources of Operating Cash Flow:

Net Income 39,268 39,108 38,556
Depreciation and Amortization 470 490 500
(Increase) Decrease Defer Taxes 0 0 0
(Gain) Loss on Sale of Assets 15 9 2
(Increase) Decrease Current Assets 42,970 (320) 80
Increase (Decrease) Current Liab 22,931 415 (104)

Operating Cash Flow 105,654 39,701 39,034

Investment Sources of Cash Flow:

Planned Sale of Assets 100 60 20
Planned Sale of Investments 2,200 2,100 1,900
Other Investment Sources to be used 0 0 0
Total Investment Sources of Cash 2,300 2,160 1,920

Planned Investments:
Capital Expenditures (3,500) (3,000) (3,100)
Acquisitions (500) (750) (500)
Purchases of Investments (2,000) (3,000) (3,000)
Total Investment Applications of Cash (6,000) (6,750) (6,600)

Cash Flow from Financing Activities:

Proceeds from Loans & Debt 1,300 2,000 3,000
Proceeds from Minority Interest 20 60 80
Other Financing Activities 0 0 0
Total Financing Sources of Cash 1,320 2,060 3,080

Cash Flow Applied for Financing:

Payments on Loans & Debt (1,500) (1,800) (2,500)
Dividends Paid to Shareholders (2,500) (3,000) (4,000)
Purchase / Retire Stock 0 0 0
Other Financing Activities 0 0 0
Total Financing Applications of Cash (4,000) (4,800) (6,500)

Total Change to Cash 99,274 32,371 30,934

Beginning Cash Balance 3,852 103,126 135,497

Forecasted Ending Balance 103,126 135,497 166,431

Pro Forma Balance Sheet

Cash and Cash Equivalents 103,126 135,497 166,431

Short Term Marketable Securities 0 0 0
Accounts Receivable 13,416 13,535 13,505
Inventory 10,733 10,828 10,804
Other Current Assets 8,721 8,798 8,778
Total Current Assets 135,996 168,658 199,519

Fixed Assets 13,335 16,335 19,435

Accumulated Depreciation (470) (960) (1,460)
Net Fixed Assets 12,865 15,375 17,975
Longterm Investments 1,989 2,889 3,989
Investments in Other Companies 502 1,252 1,752
Intangibles and Other Assets 75 100 150
Total Non Current Assets 15,431 19,616 23,866

Total Assets 151,427 188,274 223,385

Accounts Payable 22,808 23,009 22,959

Short Term Borrowings 16,099 16,242 16,206
Short Term Portion of LT Debt 30 30 25
Other Current Liabilities 8,050 8,121 8,103
Total Current Liabilities 46,987 47,402 47,293

Longterm Debt / Borrowings (200) 0 500

Other Longterm Liabilities 700 750 800
Total Non Current Liabilities 500 750 1,300

Total Liabilities 47,487 48,152 48,593

Preferred Equity 0 0 0
Common Equity 2,200 2,200 2,200
Additional Paid in Capital 5,700 5,700 5,700
Retained Earnings 71,493 68,493 64,493
Adj for Foreign Currency Transl (5,000) (3,500) (1,000)
Treasury Stock 0 0 0
Total Equity 74,393 72,893 71,393

External Financing Required (EFR) 29,547 67,229 103,399

ving Average)

1999 2000 2001 2002 2003 2004 2005

130,797 139,388
103,159 130,797
21,605 119,135 134,162 135,348 135,053 135,180 135,128

Total weights should add up to => 100.00%

34.50% 59.50% 100.00%

Square
0
58,369,600
34,786,404
763,859,044
73,805,281
186,164,066

Square
6,164,762,256
6,729,084,961
7,101,264,361
11,922,892,864
410,178,743
6,465,636,637

al Revenues -
torical
al Revenues -
ponential
al Revenues -
torical
al Revenues -
ponential
al Revenues -
Moving Avg

Annual Annual
Period Period
2019 2020

135,180 135,128

(66,610) (67,808)

(27,174) (26,612)

41,396 40,708

(3,600) (4,000)

700 700

38,496 37,408

38,496 37,408
520 550
0 0
3 6
(34) 14
44 (18)

39,029 37,960

25 35
1,800 1,700
 0 0
1,825 1,735

(3,900) (4,600)
0 0
(1,000) (1,000)
(4,900) (5,600)

4,500 7,000
90 100
0 0
4,590 7,100

(4,000) (6,000)
(4,000) (3,000)
0 0
0 0
(8,000) (9,000)

32,544 32,195

166,431 198,976
198,976 231,170

198,976 231,170
0 0
13,518 13,513
10,814 10,810
8,787 8,783
232,095 264,277

23,335 27,935
(1,980) (2,530)
21,355 25,405
3,189 2,489
1,752 1,752
150 100
26,446 29,746

258,541 294,023

22,981 22,972
16,222 16,215
20 15
 8,111 8,108
47,333 47,310

1,000 2,000
800 800
1,800 2,800

49,133 50,110

0 0
2,200 2,200
5,700 5,700
60,493 57,493
0 0
0 0
68,393 65,393

141,015 178,520
Home Wksh2 Scenario Analysis for
Wksh3 Wksh4 Tata Consultancy Services
Wksh5 Wksh6
Wksh7 Wksh8 We can copy our forecast into a new worksheet and do scenario analysis and goal-seek analysis.
Wksh9 Wksh10 Although Microsoft Excel includes Scenario Manager, it can be easier and quicker to simply do our
Wksh11 Wksh12 scenario analysis manually. We can use Goal Seek to find a value for a cell given a corresponding
Wksh13 active formula in another cell.
Wksh15 Wksh16
Annual Annual Annual
Period Period Period
2016 2017 2018

Pro Forma Income Statement (Simple Projection Method)

Scenario => Non Operating Expenses will decline by $ 100,000 in year 2003 and again in year 2005:

Gross Revenues 156,115 174,848 195,830

Cost of Goods Sold (79,285) (88,799) (99,455)
Operating Expenses (28,169) (31,549) (35,335)
NonOperating Expenses (3,200) (3,200) (3,100)
ExtraOrdinary Items 650 650 650
Net Income 46,110 51,950 58,590

Instead of copying our forecast into this worksheet, we can simply do scenario analysis directly in
the forecast itself.

Pro Forma Income Statement (Linear Trend Method)

Goal Seek => What total revenues are required if Net Income must be $ 13.5 million in Year 2004?

Gross Revenues 32,064 35,940 39,816

Cost of Goods Sold (11,607) (12,847) (14,087)
Operating Expenses (7,750) (8,693) (9,636)
Non Operating Expenses (3,549) (4,088) (4,627)
Extra Ordinary Items 271 271 271
Net Income (formula cells) 9,430 10,584 11,738

Do not change formula cells (goals) to

when using Goal Seek (Tools > Goal

This is the target cell that Goal Seek i

to change per the value 13,500 in cel
ysis and goal-seek analysis.
and quicker to simply do our
a cell given a corresponding

Annual Annual
Period Period
2019 2020

ar 2003 and again in year 2005:

219,330 245,649
(111,390) (124,756)
(39,576) (44,325)
(3,100) (3,000)
700 700
65,964 74,268

scenario analysis directly in

e $ 13.5 million in Year 2004?

44,301 47,569
(15,327) (16,567)
(10,579) (11,522)
(5,166) (5,705)
271 271
13,500 14,046

Do not change formula cells (goals) to values

when using Goal Seek (Tools > Goal Seek)

This is the target cell that Goal Seek is seeking

o change per the value 13,500 in cell G34
 Worst Case

-5752.08691
-3964.02317
-1096.6
24.6

Page 60
Home Wksh2 Budget Analysis for
Wksh3 Wksh4 Tata Consultancy Services
Wksh5 Wksh6
Wksh7 Wksh8 Once we complete our forecast, we can summarize and review it before finalizing it
Wksh9 Wksh10 into the form of budgets. We also need to summarize our assumptions that should
Wksh11 Wksh12 go into our final budget. We can start our budget process by reviewing the different
Wksh13 Wksh14 revenue forecast:
active Wksh16

Annual Annual Annual

Period Period Period
2016 2017 2018

Summarize Revenue Forecast:

Simple Projection Model 156,115 174,848 195,830
Linear Trend Model 85,431 98,738 112,045
Wt Moving Avg Model 134,162 135,348 135,053
Declining Growth Model 150,539 159,571 165,954
Historical Data 89,621 97,261 103,159

Projection using declining growth rates:

Gross Revenues 150,539 159,571 165,954

Total Revenues

Forecast Comparisons

300,000

250,000
Simple Projection
Model
200,000
Linear Trend Model
150,000
Wt Moving Avg
Model
100,000
Declining Growth
50,000 Model

Historical Data
0
2016 2017 2018 2019 2020
Periods

In addition to using linear models for forecasting, we can apply several non-linear (curve) models:
Logarithmic - Used when rate of change in data suddenly shifts upward or downward.
Power - Used when rate of change in data occurs at a specific rate.
Exponential - Used when rate of change is increasing or decreasing at ever higher rates.
Polynomial - Used when rate of change fluctuates with no pattern.

Logarithmic Trend
Actual Predicted
Formula for Logarithmic Trendline x factor Values Value y
1 89,621 (82,415)
y = ( c * LN (x)) - b 2 97,261 (60,965)
3 103,159 (48,418)
LN: Natural Logarithm 4 130,797 (39,516)
5 139,388 (32,610)
6 (26,968)
7 (22,198)
8 (18,066)
9 (14,421)
10 (11,161)

Power Trendline
Actual Predicted
y = b * x^c x factor Values Value y
1 89,621 84,634
2 97,261 102,584
3 103,159 114,800
4 130,797 124,340
5 139,388 132,282
6 139,147
7 145,228
8 150,710
9 155,717
10 160,337

Exponential Trendline
Actual Predicted
x factor Values Value y
y = b * EXP ( c * x ) 1 89,621 87,192
2 97,261 98,109
3 103,159 110,392
4 130,797 124,212
5 139,388 139,764
6 157,262
7 176,951
8 199,104
9 224,032
10 252,080

Polynomial Trendline
Actual Predicted
y = (c2 * x^2) + (c1 * x^1) + b x factor Values Value y
1 89,621 88,809
 2 97,261 97,049
3 103,159 108,668
4 130,797 123,663
5 139,388 142,037
6 163,787
7 188,915
8 217,421
9 249,303
10 284,564

Summarize Non Linear Curves on Graph:

1996 1997 1998
Logarithmic Trendline (82,415) (60,965) (48,418)
Power Trendline 84,634 102,584 114,800
Exponential Trendline 87,192 98,109 110,392
Polynomial Trendline 88,809 97,049 108,668
Actual Revenues 89,621 97,261 103,159
Total Revenues

Non Linear Trends

350,000
300,000
250,000 Logarithmic
Trendline
200,000
150,000 Power Tren
100,000 Exponential
50,000 Trendline
0 Polynomial
(50,000) Trendline
(100,000) Actual Reve
(150,000)
Periods
Variance Analysis of Past Budgets:

Accuracy in the budget process should be examined to determine the degree of error or
variance in the budget process. If the variance is high, this indicates a need to improve
planning techniques within the company. TBD: To be Determined

2016 2017 2018

Income Statement Items
Total Revenues - Budgeted 10,500 14,500 22,500
Total Revenues - Actual 89,621 97,261 103,159
% difference from actual -88% -85% -78%

Cost of Goods Sold - Budgeted (4,500) (6,500) (8,648)

Cost of Goods Sold - Actual (43,892) (51,465) (55,182)
% difference from actual -90% -87% -84%

Operating Income - Budgeted 3,100 4,900 9,000

Operating Income - Actual 29,339 30,066 31,931
% difference from actual -89% -84% -72%

Net Income - Budgeted 2,100 4,100 6,500

Net Income - Actual 23,075 23,670 25,241
% difference from actual -91% -83% -74%

Balance Sheet Items

Current Assets - Budgeted 3,450 4,400 6,250
Current Assets - Actual 53,377 68,442 68,222
% difference from actual -94% -94% -91%

NonCurrent Assets - Budgeted 10,900 14,000 22,000

NonCurrent Assets - Actual 24,040 21,316 22,834
% difference from actual -55% -34% -4%

Current Liabilities - Budgeted 3,750 5,600 8,200

Current Liabilities - Actual 11,309 10,701 14,058
% difference from actual -67% -48% -42%

NonCurrent Liabilities - Budgeted 1,750 2,450 3,750

NonCurrent Liabilities - Actual 1,095 1,035 1,132
% difference from actual 60% 137% 231%

Ratio Items
Current Ratio - Budgeted 0.92 0.79 0.76
Current Ratio - Actual 4.72 6.40 4.85
% difference from actual -81% -88% -84%

Total Asset Turnover - Budgeted 0.68 0.72 0.80

Total Asset Turnover - Actual 1.11 1.03 1.07
% difference from actual -39% -30% -25%
Gross Profit Margin - Budgeted 60% 60% 60%
Gross Profit Margin - Actual 49% 44% 43%
% difference from actual 23% 35% 39%

Net Profit Margin - Budgeted 19% 25% 28%

Net Profit Margin - Actual 26% 24% 24%
% difference from actual -26% 3% 14%

Debt to Common Equity - Budgeted 0.45 0.50 0.60

Debt to Common Equity - Actual 0.19 0.15 0.20
% difference from actual 136% 232% 200%

Return on Equity - Budgeted 20% 29% 32%

Return on Equity - Actual 35% 30% 33%
% difference from actual -44% -4% -4%

We can use specific measurements to track and control forecasting errors:

Mean Absolute Error - An absolute value of forecast errors, does not place weight on the
amount of the error. Calculated as the sum of (actual values - predicted values) / n.

Mean Square Error - Similar to Mean Absolute Error, but does place more emphasis on
the amount of error; i.e. an error of 8 is twice as significant as 4. Calculated as the
sum of (actual values - predicted values)^2 / n.

Root Mean Square Error - To make the Mean Square Error useful and comparable to the Mean
Absolute Error, we can take the square root of the Mean Square Error. We can then use this
as a guide to establish an error limit or standard for flagging unacceptable errors.
Actual Forecasted
Example: Total Revenues Period Revenues Revenues
n: total number of periods 1996 89,621 10,500
1997 97,261 14,500
1998 103,159 22,500
1999 130,797 28,500
2000 139,388 30,000
n => 5 Sum =>

Mean Absolute Error

Mean Square Error
Root Mean Sqr Error
Establish Error Limits
before finalizing it
ions that should
wing the different

Annual Annual
Period Period
2019 2020

219,330 245,649
125,352 138,659
135,180 135,128
168,444 31,000
130,797 139,388

168,444 31,000

Simple Projection
Model

Linear Trend Model

Wt Moving Avg
Model

Declining Growth
Model

Historical Data

veral non-linear (curve) models:

ward or downward.
ng at ever higher rates.

Slope Intercept
c factor b factor
30945.3911 82415.0391

Slope Intercept
c factor b factor
0.27748785 11.3460946
84634.2706

< - calculate using c and b factor - >

Slope Intercept Predicted
c factor b factor ( c * x) EXP Value y
0.11795919 11.2579111 0.11796 1.1251982 87,192
77490.5397 0.23592 1.266071 98,109
0.35388 1.4245808 110,392
0.47184 1.6029357 124,212
0.58980 1.8036204 139,764
0.70776 2.0294304 157,262
0.82571 2.2835114 176,951
0.94367 2.5694029 199,104
1.06163 2.8910875 224,032
1.17959 3.2530464 252,080

c2 c1 b
1688.71429 3174.71429 83945.2
 1999 2000 2001 2002 2003 2004 2005
(39,516) (32,610) (26,968) (22,198) (18,066) (14,421) (11,161)
124,340 132,282 139,147 145,228 150,710 155,717 160,337
124,212 139,764 157,262 176,951 199,104 224,032 252,080
123,663 142,037 163,787 188,915 217,421 249,303 284,564
130,797 139,388

Trends

Logarithmic
Trendline

Power Trendline

Exponential
Trendline

Polynomial
Trendline

Actual Revenues
 the degree of error or
es a need to improve

(Wksht 16)
2019 2000 2001

28,500 30,000 30,500

130,797 139,388 TBD
-78% -78% #VALUE!

(9,650) (11,000) (15,490)

(63,266) (69,946) TBD
-85% -84% #VALUE!

11,000 10,500 9,507

40,705 41,991 TBD
-73% -75% #VALUE!

9,000 9,300 6,347

30,065 33,260 TBD
-70% -72% #VALUE!

7,500 7,900 66,939

79,032 79,194 TBD
-91% -90% #VALUE!

27,500 29,500 17,584

20,468 25,781 TBD
34% 14% #VALUE!

9,050 9,400 10,715

18,896 24,026 TBD
-52% -61% #VALUE!

4,900 5,100 1,300

1,706 6,581 TBD
187% -23% #VALUE!

0.83 0.80 6.25

4.18 3.30 TBD
-80% -76% #VALUE!

0.80 0.79 0.36

1.24 1.25 TBD
-35% -37% #VALUE!
 60% 60% 0.49
49% 47% TBD
23% 28% #VALUE!

30% 28% 21%

23% 24% TBD
31% 17% #VALUE!

0.65 0.55 0.14

0.26 0.41 TBD
149% 34% #VALUE!

35% 30% 7%
38% 45% TBD
-8% -33% #VALUE!

not place weight on the

dicted values) / n.

ce more emphasis on
alculated as the

and comparable to the Mean

rror. We can then use this
eptable errors. Is Error
Error Outside
Error Absolute Squared Limit?
79,121 79,121 ### No
82,761 82,761 ### No
80,659 80,659 ### No
102,297 102,297 ### No
109,388 109,388 ### No
454,226 454,226 ### Yes

Mean Absolute Error 90,845

Mean Square Error ###
Root Mean Sqr Error 203,136
Establish Error Limits 203,136
Home Wksh2 Final Budgets for
Wksh3 Wksh4 Tata Consultancy Services
Wksh5 Wksh6
Wksh7 Wksh8 Now that we have analyzed our historical data and placed it into a set of
Wksh9 Wksh10 forecast, we can pull it all together with our assumptions for a final budget.
Wksh11 Wksh12 Many of these assumptions should be included in our forecast for improved
Wksh13 Wksh14 accuracy. However, we need to fine tune and finalize all assumptions
Wksh15 active so that we can produce a final finished budget for planning purposes.

Budget
Period
Ref 2001

Operating Plan

16-1 Total Revenues 30,500

16-2 Cost of Goods Sold (15,490)
16-3 Operating Expenses (5,503)
16-4 Operating Income 9,507

16-5 Interest Expenses (310)

16-6 Income Taxes (3,300)
16-7 Other Non Operating Expenses (200)

16-8 Earnings Before Extra Ord Items 5,697

16-9 Extra Ordinary Items 650

16-10 Net Income 6,347

Financial Plan

Budgeted Cash Flows

16-11 Net Income 6,347

16-12 Depreciation and Amortization 470
16-13 (Increase) Decrease Defer Taxes 0
16-14 (Gain) Loss on Sale of Assets 15
16-15 (Increase) Decrease Current Assets 70,959
16-16 (Increase) Decrease Current Liab (13,351)

16-17 Operating Cash Flow 64,440

Investment Sources of Cash:

16-18 Planned Sale of Assets 100
16-19 Planned Sale of Investments 2,200
16-20 Other Investment Sources to be used 0
16-21 Total Investment Sources of Cash 2,300

Planned Investments:
16-22 Capital Expenditures (4,500)
16-23 Acquisitions in Other Co's (350)
16-24 Purchases of Investments (2,500)
16-25 Total Investment Applications of Cash (7,350)

Cash Flow from Financing Activities

16-26 Proceeds from Loans & Debt 1,450
16-27 Proceeds from Minority Interest 15
16-28 Other Financing Activities 0
16-29 Total Financing Sources of Cash 1,465

Cash Flow Applied for Financing:

16-30 Payments on Loans and Debt (1,250)
16-31 Dividends Paid to Shareholders (2,500)
16-32 Purchase / Retire Stock (1,500)
16-33 Other Financing Activities 0
16-34 Total Financing Applications of Cash (5,250)

16-35 Total Change to Cash 55,605

16-36 Beginning Cash Balance 3,852

16-37 Forecasted Ending Balance 59,457

Budgeted Balance Sheet

16-38 Cash and Cash Equivalents 59,457

16-39 Short Term Marketable Securities 10
16-40 Accounts Receivable 3,050
16-41 Inventory 2,440
16-42 Other Current Assets 1,983
16-43 Total Current Assets 66,939

16-44 Fixed Assets 14,335

16-45 Accumulated Depreciation (470)
16-46 Net Fixed Assets 13,865
16-47 Longterm Investments 2,489
16-48 Investments in Other Companies 1,000
16-49 Intangibles and Other Assets 230
16-50 Total Non Current Assets 17,584

16-51 Total Assets 84,523

16-52 Accounts Payable 5,185

16-53 Short Term Borrowings 3,660
16-54 Short Term Portion of LT Debt 40
16-55 Other Current Liabilities 1,830
16-56 Total Current Liabilities 10,715

16-57 Longterm Debt / Borrowings 200

16-58 Other Longterm Liabilities 1,100
16-59 Total Non Current Liabilities 1,300
16-60 Total Liabilities 12,015

16-61 Preferred Stock 0

16-62 Common Equity 2,200
16-63 Additional Paid in Capital 5,700
16-64 Retained Earnings 77,840
16-65 Adj for Foreign Currency Translation (5,000)
16-66 Treasury Stock (1,500)
16-67 Total Equity 79,240

16-68 Total Liabilities and Equity 91,255

16-69 External Financing Required (6,732)

 a and placed it into a set of
ssumptions for a final budget.
ed in our forecast for improved
d finalize all assumptions
et for planning purposes.

Assumptions & Comments

Based on review of Pro Forma Financials, Marketing, etc.

Volume projections, production budgets, and vertical analysis
Average % of Sales per Vertical Analysis

Based on anticipated levels of debt and past history

Based on anticipated taxable income and effective rate
Provision for contingency was added on this line item

Per our Simple Model Forecast

Review of Simple Model Forecast and Capital Expenditure Budget

Per Simple Forecast Model

Same formula as used in forecast models
Same formula as used in forecast models

Per Simple Model Forecast

Per Simple Model Forecast

Budgeted $ 4.5 million in Capital Expenditure Budget

Per forecast, strategic plan, and other budgets
Per forecast, strategic plan, and other budgets

Per Financing Requirements and other budgets

Per historical financials and investment budget

Per forecast and other budgets

Per Simple Model Forecast
Per strategic plan and other budgets

Per above
Per historical financials
Same formula as used in forecast models
Same formula as used in forecast models
Same formula as used in forecast models

Same formula as used in forecast models

Same formula as used in forecast models

Same formula as used in forecast models

Per review of forecast and strategic plans
Per review of forecast and historical balances

Same formula as used in forecast models

Same formula as used in forecast models
Per review of forecast and historical information
Same formula as used in forecast models

Same formula as used in forecast models

Per review of historical information and expected growth rates.
Per Simple Model Forecast
Per Simple Model Forecast
Same formula as used in forecast models
Per Simple Model Forecast
Same formula as used in forecast models
Microsoft Excel 9.0 Answer Report
Worksheet: [Detail_Analysis.xls]13 - Pro Forma (Exp)
Report Created: 3/16/2002 3:42:28 PM

Target Cell (Min)

Cell Name Original Value Final Value
$G$60 Mean Squared Error Square 20,525,549 12,297,836

Adjustable Cells
Cell Name Original Value Final Value
$D$24 Set Smoothing Factor 0.70 1.00

Constraints
Cell Name Cell Value Formula Status Slack
$D$23 Smoothing Factor must be between 0 and 1 0 $D$23>=$D$23 Binding 0
$D$24 Set Smoothing Factor 1.00 $D$24<=$E$23 Binding 0
Microsoft Excel 9.0 Answer Report
Worksheet: [Detail_Analysis.xls]13 - Pro Forma (Exp)
Report Created: 3/16/2002 5:19:05 PM

Target Cell (Min)

Cell Name Original Value
$G$46 Mean Squared Error Square 65,536,151

Adjustable Cells
Cell Name Original Value
$D$25 Assign weights to appropriate periods 0.00%
$E$25 Assign weights to appropriate periods 2.00%
$F$25 Assign weights to appropriate periods Total weights should add up to => 5.00%
$G$25 Assign weights to appropriate periods 35.00%
$H$25 Assign weights to appropriate periods 60.00%

Constraints
Cell Name Cell Value
$I$25 Assign weights to appropriate periods 100.00%
$D$25 Assign weights to appropriate periods 0.00%
$E$25 Assign weights to appropriate periods 1.50%
$F$25 Assign weights to appropriate periods Total weights should add up to => 4.50%
$G$25 Assign weights to appropriate periods 34.50%
$H$25 Assign weights to appropriate periods 59.50%
$D$25 Assign weights to appropriate periods 0.00%
$E$25 Assign weights to appropriate periods 1.50%
$F$25 Assign weights to appropriate periods Total weights should add up to => 4.50%
$G$25 Assign weights to appropriate periods 34.50%
$H$25 Assign weights to appropriate periods 59.50%
 Final Value
59,853,342

Final Value
0.00%
1.50%
4.50%
34.50%
59.50%

Formula Status Slack

$I$25=$E$23 Binding 0
$D$25<=$E$23 Not Binding 1
$E$25<=$E$23 Not Binding 0.985
$F$25<=$E$23 Not Binding 0.955
$G$25<=$E$23 Not Binding 0.655
$H$25<=$E$23 Not Binding 0.405
$D$25>=$D$23 Binding 0.00%
$E$25>=$D$23 Not Binding 1.50%
$F$25>=$D$23 Not Binding 4.50%
$G$25>=$D$23 Not Binding 34.50%
$H$25>=$D$23 Not Binding 59.50%