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Financial Modeling Contest: Complete the LinkedIn Model

February 19, 2011
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Preparing an integrated financial model from the scratch for the equity valuation has always been a daunting task which requires both finance acumen and patience. Here is a challenging problem which checks both of these much required qualities of a good modeler.


You are provided with the template of LinkedIn’s incomplete model, which you need to figure out and complete. The blanks are highlighted with yellow color.

Following are 4 problems which you need to solve:

  1. Revenue Build-Up Sheet:
    • Making the projections for Number of registered Members and Corporate Solution Customers
    • Calculating the Quarterly Revenue from each head: Hiring Solution Revenue, Marketing Solution Revenue, Premium Solution Revenue
    • Finally consolidating quarterly revenues into yearly numbers and updating the P&L statement.
  2. Cash Flow Statement:
    • Preparing the complete Cash flow statement from the Profit & Loss statement and Balance sheet.
    • Updating the balance sheet by linking the Cash and Cash Equivalents row.
  3. Valuation Sheet:
    • Calculating the cost of Equity
    • Calculating the FCFF and FCFE and then discounting these free cash flows to get the Equity Value of the firm.
  4. Balance Sheet and P&L Sheet:
    • The Cash balance on the balance sheet will also earn some interest rate on it. Let’s suppose 4% per annum. Also if the cash balance of the company goes negative, they have any overdraft facility which charges at 6% per annum. You need to incorporate this interest calculation in the model.

How to get the template?

You can download the template @: Click this link.

How to submit?

You can submit your answer files mailing us at:

What’s the duration of the contest?

Contest is open from 11 AM, 19thFeb, 2011 till 9 A.M. IST 21st Feb, 2011.


About the Author

Anil Bains has developed end-to-end financial models for Real Estate, FMCG, Power, Roads and Telecom Sector and released them as Open Source. He has extensive experience in the financial services, analytics and training domain. Apart from making Financial Modeling simple and accessible for the masses, Anil loves playing volleyball and has a mean spike.


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