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 LinkedInâ€™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:
- 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.
- 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.
- 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.
- Balance Sheet and P&L Sheet:
- The Cash balance on the balance sheet will also earn some interest rate on it. Letâ€™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: email@example.com
Whatâ€™s the duration of the contest?
Contest is open from 11 AM, 19thFeb, 2011 till 9 A.M. IST 21st Feb, 2011.