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EduPristine>Blog>Financial Modeling Contest: Complete the LinkedIn Model

Financial Modeling Contest: Complete the LinkedIn Model

February 19, 2011

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.

Problem

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: contests@edupristine.com

What’s the duration of the contest?

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

About Author

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Trusted by Fortune 500 Companies and 10,000 Students from 40+ countries across the globe, it is one of the leading International Training providers for Finance Certifications like FRM®, CFA®, PRM®, Business Analytics, HR Analytics, Financial Modeling, and Operational Risk Modeling. EduPristine has conducted more than 500,000 man-hours of quality training in finance.

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