BS Query

kr79
Posts: 5
Joined: Mon Oct 15, 2012 1:46 pm

BS Query

Postby kr79 » Sun Oct 28, 2012 4:03 pm

Dear Pristine Team,

I'm halfway through building a financial model. I just finished modelling the cashflow numbers...the numbers match with the historical Cash Balance numbers in the Balance Sheet.

However, when I take the future cash flow numbers and plug it back in the BS, the BS is not balancing. I just wanted to know if this is a expected outcome? Or should the projected BS always be balanced?

I understand that the BS may not be balancing because of an error in any of the projected line items in the BS. If this is the case, is there any process, employing which I can decipher where I;m going wrong? Or isit just by trail and error method?

Kindly help me with this, looking forward for your response.

Best Regards,
KR.

Tags:

content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Re: BS Query

Postby content.pristine » Mon Oct 29, 2012 2:43 pm

Hi KR,

The BS would need to match. Perhaps you are forgetting or double adding items in the CF statement. Check for this. There is no hit-or-trial method.

8-)

kr79
Posts: 5
Joined: Mon Oct 15, 2012 1:46 pm

Re: BS Query

Postby kr79 » Mon Oct 29, 2012 3:16 pm

Thanks, I just figured I had done a mistake. The BS is now balancing :)

Regards,
KR.

content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Re: BS Query

Postby content.pristine » Mon Oct 29, 2012 3:39 pm

That's cool!
Where did you go wrong?

8-)

kr79
Posts: 5
Joined: Mon Oct 15, 2012 1:46 pm

Re: BS Query

Postby kr79 » Mon Oct 29, 2012 3:51 pm

Thanks for asking.

I had projected a BS line item called "Share Premium" (falling under the shareholders equity). The projection was basically equivalent to the most recent years actual stated number (FY12A) ....and for the projection (FY13-FY17) I had kept FY12A's number as constant

The difference in the BS was basically because of that. When I made the share premium zero for the future years, the BS balanced.

But honestly, I'm unable to justify to myself as to why I need to keep the 'Share Premium' to zero.

Would you you know why?


Return to “Open Source Financial Modeling”



Disclaimer

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®, Claritas® 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 abuse@edupristine.com and we will rectify it.