To forecast our balance sheet, we build our calculations from top to bottom. So we start with assets, then liabilities, and then equity. However, we do need to remember that we are gonna leave cash and the revolver blank until after we've built the cash flow statement. So the first item that we're going to forecast is current operating assets. If we look at our assumptions for these, we can see that these are forecast as a percentage of revenue on the basis that if revenue increases, things like receivables and inventory would also be expected to increase.

So let's forecast our current operating assets and we'll take our assumption and multiply that by our forecast revenues to give current operating assets of 2,586. Moving down our balance sheet, we now have PP and e and intangible assets. This is something that we've already forecasted in our balance sheet calculations, so we simply need to grab the ending balance from our PP and e and intangible assets base calculation. Moving on down to liabilities, the first item that we can forecast is current operating liabilities. Looking again at our balance sheet assumptions, we can see that these are also forecast as a percentage of revenues on the basis that an increase in revenues would result in an increase in purchases from suppliers and things like trade payables. So let's forecast our current operating liabilities, and we're gonna grab the assumption and then multiply that by forecast revenues, and that gives us current operating liabilities of 1789.5. The next item that we're gonna forecast is long-term debt. If we take a look at our net debt assumptions, we can see that we have an explicit forecast for the amount of long-term debt issuance or repayment in each year. So we simply need to add the forecast assumption to the prior year balance.

So if we go down to our debt, so let's forecast our long-term debt and we take our assumption and add that to the prior year amounts, giving us forecast long-term debt of 5111.7. Moving on down, we just have equity left, And this is very straightforward as we've already forecasted this in our balance sheet calculations. So we can just grab the ending balance from our equity based calculation and pop that into our balance sheet.

One thing to point out, at this stage, It's outta balance by 575.1. Now, we are not going to worry about this yet as we know that we haven't yet completed the cash flow statement, so we don't have cash or the revolver in the balance sheet yet. Now that we've finished all of the forecasts that we can build for now, we can copy our formulas Over to the right. So select all of your year one forecasts, and then copy over to column J, control R. So We now have five years of forecast for our balance sheet line items. There's one final Step that I'm going to do now, And this is in readiness for building the cash flow statement. I'm going to build a separate sum of net operating working capital in the balance sheet calculation section of the model. I'm just gonna link these amounts in To the balance sheet, Including the amount for the last historic year. So I'll grab current operating assets and current operating liabilities, and then I'm gonna calculate the net of these two numbers.

I can then copy this formula all the way to the end of my forecasts.

This will make our cashflow statement bill much more straightforward as we'll just need to deal With one line item for working capital.