Financial modeling the Balance sheet and CFS

monkey10011's picture
Rank: Orangutan | banana points 297

I am looking for some clarity on modeling out the B/S and CFS.
Before say projecting the working capital, and everything else on the balance sheet, do I need to make sure that each balance sheet line item has a corresponding link to the CFS line item?

I thought that is what I'm suppose to do, but it is proving much more difficult than I had though.

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Comments (6)

Jan 3, 2019

monkey10011, way too quiet in here. What about these resources:

  • Matching Historical Balance Sheet and Cash Flow Statement Items Doing a practice valuation, currently trying to match historical balance sheet items to cash flow ... statement items. I've encountered a problem where, historically, changes in the balance sheet are not ... matched by their equivalent items on the cash flow statement- the
  • Check Projected Balance Sheet balance sheet should be driven by projections that are made on the income statement, statement of cash ... sheet. Knowing that Assets = Liabilities + Shareholder's Equity balancing the statement is a matter ... subsequent funding decisions will be reflected on the statement of ca
  • How to balance three financial statements- CFI & CFF section Michael Kors- Help needed! So basically I have a final project on financial modeling and the task is to project and balance ... them back to my balance sheet? I don't know which links to which. 3. On its CFS, the CFO section ... Michael Kors' three financial statements into the future 5 years. I am confused about: 1. How to .
  • Apple buys $100 of new factories with debt. How are statements affected at start of year 1? +100, Liabilities: Debt +100 Balance sheet balances. My question is why the factories go under cash flow ... My answer: IS: Nothing happens CFS: Cash flow financing: +100 Cash flow investing-100 BS: PPE ... from investing? I thought I should treat it as INVENTORY and therefore it should be-10
  • Modeling question: creating your own CFS I'm having some trouble projecting the CFS in a three statement model of a public company. ... For practice. It would be significantly easier for me to just create my own cash flow statement format ... using the balance sheet and IS projections instead of trying to reconcile them with this company's ...
  • Financial Modeling Help!!! Need by Sunday night!! Hey guys, I'm working on a financial forecast and i can get the CFS to balance but the B/S is ... 3 statement financial model balance sheet ...
  • Finance Interview Questions and Answers | Wall Street Oasis earnings on this period's Balance Sheet Beginning Cash on the CF Statement is cash from the prior ... period's Balance Sheet and Ending Cash on the CF statement is Cash on the current period's Balance ... flow
  • More suggestions...

Hope that helps.

Jan 6, 2019

If you expect a balancesheet item to increase of decrease, it will have a CF impact yes. You can't ignore that in your valuation. Exception is cash, that's the result.

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Jan 26, 2019

so if you are thinking about going into SS ER, it doesn't make sense to go line by line. Same with IB, BS Analyst. It's basically a thing people do in school and in FP&A/Corp Dev, from my experience (been in IB, BS Analyst, SS ER). Focus on the IMPORTANT things. For example, an E&P firm depends on DD&A, Capex, and Debt/Equity Raises to maintain cash balance. so focus on those items. other small line items aren't as important if you wash them out. please DM me if you want to chat more about this. I build models all day every day for my job.

Whenever you're on the right path, the universe will shovel you shit, and you must turn it into compost

Jan 27, 2019

Hey thanks for that. I had a 2nd round interview with an international bank, (not for an ER role) so I spent a while preparing for that and forgot about this thread.

Yeah.. I'm just learning how to model, so it's been confusing. I'm trying to piece everything together and I think I made my first run through model way harder than it needed to be by laying it out as a quarterly model. I'm still working on it, and I'm going to just complete the model, then think about the assumptions afterwards.

I'll definitely save your profile, and take you up on that offer. That's awesome. Thank you.

Jan 28, 2019

Of course heavily dependent on what you use this model for, but for valuation purposes the Debt/Equity raises are not important at all (are in the discount rate). Could imagine some E&P companies have significant provisions (polution?) that are important to take into account.

In general a DCF, apart from I/S items, always includes working capital movements, capex and effective tax rate (so not actual tax from I/S).

Jan 28, 2019