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Projecting the statement

If you remember (I am sure if you are concentrating on modeling rather than Facebooking, you would at least remember a bit), we are creating a simple model to Projecting Financial Statements for Facebook (and hence be in awe with the worth of Mark Zuckerberg! ;-))

Recap on Facebook Valuation Tutorial Course

We have already modeled:

• The historical statements of Facebook: The P/L & B/S mostly was hardcoded, with a few derived numbers and cash flow statement was modeled using the indirect method and derived from the historical B/S and P&L
• The Historical Drivers of Facebook: Mostly were calculated as %age of Revenue and some as year-on-year growth rate. The few balance sheet historical drivers were calculated in days and so on.
• The Assumption of Facebook: Mostly this was modeled by taking the average of historical drivers and by using S1 and public, non-public and non-material information of the Facebook.
• From today onwards we start Projecting Financial Statements for Facebook using the modeled assumptions.

Projecting the Statements

Today’s exercise is to start modeling the future P/L, B/S and Cash Flow Statement of FB. Once we have the projected future P/L, B/S and Cash Flow statement of Facebook. Once we have the cash, it will be easy to estimate the value that FB and Mark Zuckerberg will have!

Template for Projected Statement

I have for you a simple template to project the future financial statements for Facebook.

Download the template and try to project the future P/L, B/S and CFS of the Facebook using the assumptions modeled in the previous exercise.

Go ahead and predict how rich Zuckerberg is gonna be!!!

Next Step:

We have been discussing the process of building assumptions for the last two parts. Now, we share with you, our view on the future drivers for Facebook. We release our Assumption Layout for Facebook valuation.

Caution! These are views and perceptions. Yours could be way different from mine! But I would like to hear yours! Speak up!

Recap of the steps in getting the Assumptions in place

Assumptions are modeled by taking in view the following, Download Assumptions Layout

• The historical drivers
• Using Management Discussion Analysis (S1)
• Other public and non-public, non-material information

I am sure if you tried hard, you would have got the Right assumptions. Let’s discuss the issues on our Assumption Layout for Facebook valuation forum.

Next Step

Now that we have the assumptions ready, we focus on projecting financial statement (P/L & B/S) of Facebook. As a next step, we will start with the unfilled template to project the financial statements of Facebook.

Next Step:

We already have the assumptions for modeling financial statements of Facebook in place with us. In the last tutorial we had started discussing regarding projecting future P/L, B/S and CFS of Facebook. We also had released a simple template for modeling future P/L, B/S and CFS of Facebook.

Projecting future financial statements is a part of complete financial analysis, done by using the assumptions modeled for the subject company. These Projecting Financial Statement for Facebook (P/L, B/S and CFS) are than used in present value based formula (DCF) to access a company’s market value. I give you a simple hint on using assumption to model the Projecting Financial Statement for Facebook and you should try to build the future statements of Facebook on your own.

How to model Projecting Financial Statement for Facebook?

Modeling future P/L Statement uses the assumptions related to each line item in the P/L statement

Example:

Likewise modeling future B/S uses the assumptions related to each line item in the B/S.

Example of selected B/S items is given as follows:

Note: Remember to complete Balance Sheet modeling you have to link cash & cash equivalents in the balance sheet with the closing cash balance calculated in the cash flow statement.

Once future P/L & B/S is in place, modeling future cash flow statement (CFS) becomes a simple exercise because you have already categorized and linked the CFS with the P/L and B/S while modeling the historical cash flow statement. Now you just need to drag the formula till the required number of periods.

I hope you all will be able to do it correctly!!

In case you find any problem in modeling future P/L, B/S and CFS please write in our forum/blog, we will like to answer you queries.

Next Step

We will release filled template of projected future financial statements (P/L, B/S & CFS), so that you can check your progress.

Next Step:

If you have been following the posts till now, this post is as simple as it can be! This just releases the complete Projected Statements for Facebook. It is like a guide for you to check your efforts for the past few days. If you have been working hard, I am sure you would enjoy the glory today!

Recap of the steps in getting the Projected Statements for Facebook

Modeling future P/L & B/S Statement uses the assumptions related to each line item in the respective statements.

Note: Remember to complete Balance Sheet modeling you have to link cash & cash equivalents in the balance sheet with the closing cash balance calculated in the cash flow statement.

Modeling future cash flow statement (CFS) becomes a simple exercise once future P/L & B/S are in place, because you have already categorized and linked the CFS with the P/L and B/S line items while modeling the historical cash flow statement. Now you just need to drag the formula till the required number of periods!!

I am sure if you tried hard, you would have got the Right forecasted statements of Facebook. If not, let’s discuss the issues on our forum.

Next Step

Now that we have the complete historical and Projected Statements for Facebook, we focus on performing ratio analysis of Facebook. Next we will start with the unfilled template to perform financial ratio analysis of Facebook.

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