We are almost done with the trickiest part of the Facebook Model. We almost have the cash flow statement with us. Just to recap, the basic steps in creating the cash flow statements were:
1. Categorizing Balance Sheet items of Facebook in Operating, Investing and Financing Activities
2. Taking difference of two consecutive years and place it in the respective head in the Cash Flow Statement
If you remember we had also discussed the BASE Rule where we had discussed the generalized methodology of creating the closing accounts of the balance sheet from the other statements. It is time we put all our basic knowledge into action!
Now that we have the basic elements of the cash flow statement with us and the pre requite knowledge to create the cash flow statement, we would find the real cash at the end of the year and ensure that it balances with the cash in the balance sheet.
Today we calculate the closing cash balance for Facebook in the cash flow statement and ensure that it balances the cash in the balance sheet. Please note that this balancing is a basic error check in the model. If you are not getting it right, it is time to check your old numbers.
Remember: Closing Cash Balance = Beginning Cash Balance + Net Changes in Cash Flow
Try on your own and calculate the closing cash balance for the Facebook and see whether the resultant figure is the one that is given in the historical balance sheet.
2moro we would release the cash flow statement of facebook. You would see that the closing cash balance calculated in the Cash Flow Statement is same as the Cash in Facebookâ€™s balance sheet. Tomorrowâ€™s integrated linked model would include all financial statements for facebook
Once we have the Cash Flow Statement in the model, we would clearly see the linkage between P&L, B/S and the cash flow statement. CUL8R!!
Why go hunting for each individual post on our blog, when the entire Facebook Valuation Program can come right in your inbox? Yes. It's now a simple click away, just provide your email address in the form below, and we will email you the entire 1 month program 1 article a day!!
Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc
CFA® Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA® Institute, CFA® Program, CFA® Institute Investment Foundations™ and Chartered Financial Analyst® are trademarks owned by CFA® Institute.
Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to firstname.lastname@example.org and we will rectify it.
2017 © Edupristine. ALL Rights Reserved.