For expenses, we have a choice. We can continue to apportion the daily expenses according to the calculator we just used for sales or we can take a look at our historicals and see if there's an easier and more reliable way of doing it. In this case, we have a previous 13 weeks of cash flows in columns D through P, which I will now have to unhide. In practice, this could exist because we've already been through this process of creating a week-by-week cashflow or they could have been entered in as historicals, perhaps even tracked by the company itself. Either way, they are extremely helpful, as most historicals are, to see trends. The historicals demonstrate some consistency in the ratios. So, rather than do the more complicated approach we did for revenues, we are simply going to apply these ratios as forecasted assumptions. This is just another way to approach the model and it gets us again around using those complicated formulas in the revenue sections, which are less copyable in a sense 'cause we have to be careful month to month. If we did not have the benefit of this past historical data, we would have to continue using that days approach as above with revenues. Scrolling back to our forecasted weeks, columns Q through AC, we see that we have assumptions here for some of our operating costs, which are driven by revenues. The other SG&A costs, depreciation, amortization, and other income, will be handled similarly to revenues 'cause there's not really any way around that. So, I will simply go ahead and put these formulas into our model by linking to revenues. And I'm gonna anchor my row here because the row structure is going to allow me to copy at least down for a couple of rows. So, I've got my revenues in row 10 times my COGS. And again this is broken down by both payroll and employee benefits as a percentage of sales and materials as a percentage of sales. And this is done this way simply so that we can have a little more control over the expenses. And as we see historically, we're using a positive/negative presentation. So, I'm gonna go ahead and flip my presentation to negative and then I can copy down to get my materials and other. And I'm gonna do the same thing for my SG&A. I'll come back to depreciation in a moment. So, I'll go up to my revenues, I will anchor the row and I will multiply down by the assumption for payroll and benefits as a percentage of sales, flip it to negative, copy down, and I have both of those complete. Now, typically when we model we like to get one column correct before we copy. We couldn't really do that with revenues because revenues had that funky formula that kind of needed to be handled or handheld, I should say, month-to-month to make sure we were getting the proper crossover from the month transitions. In this case, however, these formulas are going to track with revenues. The nice thing about copying, of course, is that when you're done, you're done. The bad thing about copying is that if you find a mistake, of course, you have to go back and kind of make sure you redo everything in each column or recopy everything in each column. But since this is more of an advanced modeling course, I'm gonna go ahead and copy over my expenses here. The D and A actually we do have to wait to copy on because they're going to be calculated in the same way that revenues was, and we're not gonna be able to do a wholesale copy and we're gonna have to only copy sort of month-to-month or week-to-week. So, let's go ahead and take a look at how we can handle depreciation. First, we have to figure out where depreciation has been calculated. So, if we go back to our monthly income statement, we see that we have a forecast for depreciation by month. And we'll see below that we have kind of a daily depreciation expense calculated or interpolated I should say down below. So, same thing for amortization. Amortization is obviously a very small number for this company, but it's important for us to get it in here. Even though we're doing a cashflow statement model, a cashflow-based model, we obviously wanna make sure that we have depreciation in here for when we do our EBITDA reconciliation on the last page to make sure that our cash flows and our EBITDA calculation reconcile. So, back to our weekly income statement, I'm going to go ahead and link to my numbers up here. I'm going to do days from current week from the current month and apply them to my November depreciation plus days from the previous month in the current week and apply that to my October daily depreciation. And that should get me a number that looks in line with history, and it does. And again, if I anchor my columns, I can go ahead and copy that through the end of November and I should get a reasonable number, and I do. And then once I get to November, December I should say, I have to go ahead and rebuild that formula. So, I'm gonna go ahead and get days from current month in this week times my December depreciation, and here I'll go ahead and anchor the column plus days from the previous month times my depreciation from November. And I will anchor that as well, copy that across. Now, I'm into January so I will begin this process again, times January depreciation plus, and I think I'll be a little bit lazy and grab my previous months depreciation here times.

And again, I'm seem to be staying consistent with the previous weeks, so the number looks good to me. And now, what I can do is borrow a formula that's already been calculated or compiled and copy that across so I don't have to recreate a formula and risk making a mistake. So, I'm gonna have to go through the same process again for amortization, and I will do that very quickly.

Six times the monthly income statement of amortization. And it is obviously a lot of work for a very small number, but...

And I will copy my payroll and other SG&A across as I go. So, I'm now in December, I will grab my four days of December amortization on a daily basis, one, two, three, plus the holdover from November, three days, and I'll copy that across. And then lastly, I can go ahead and do the same thing for January.

For other income, what I'm going to do here

but I don't wanna go through the process of building that formula again if I don't have to. So, if I look on my monthly income statement what I can see is that the amortization is right on top of other income. So, I can actually just by modifying this formula slightly copy it down the rows on the income statement, on the monthly income statement will copy down nicely for me and get me the row that I need. However, on the day count in row 7 and 8, those are gonna need to be anchored because if they're not I won't get the proper cells. So, I will simply go into this formula and anchor row 7 with a dollar sign and row 8 with a dollar sign. And if I do that and I copy across and then copy down, I will get the correct other income on a weekly basis. And then, I'd have to do that again here. And I probably if I were doing this again and thinking ahead I might have done that at first, but I wasn't, so fortunately it's not that hard to do. So, we can go ahead and anchor our 7 and anchor our 8 in the next week and then copy down, and then do it one more time.

Anchor our 7, anchor our 8, copy across, copy down. And now again what I can do is borrow my operating income formula from the historical year and I can copy that across. And again, the numbers look to be more or less in line with previous years. There definitely has been a fall off in operating performance. This is, of course, part of the case and the trouble that this company is in. The next thing we need to do is look at legal and advisory fees in row 22. These are non-operating and they represent fees paid to financial and legal advisory to help with any restructuring. In a bankruptcy, these can be significant and are prioritized alongside debt service to ensure a smooth restructuring process. Company doesn't have to be in a bankruptcy or restructuring to be incurring these kind of legal and advisory fees, they might be headed down that path and have started to kind of line up the troops. So, we've hard coded these in the assumptions, and these are gonna be paid in every quarter. So, you can see that these have already been put onto our weekly income statement as an assumption just to kind of help push this process along. Therefore, there's nothing we have to do here with these, these aren't going to appear every week, they're gonna appear, you know, from time to time. And this is exactly the kind of thing in accrual accounting we might smooth these out over the period because they have benefit throughout the accounting period. But the last thing I wanna do at this point is take a periodic expense, accrue it for accounting purposes and then unwind it for cashflow purposes, it's just creating more work than we need to. So, I'm keeping these periodic legal and advisory fees periodic even on the income statement, which, of course, isn't technically correct, but we're not accountants here and we're not trying to redo the accountant's work, we're trying to get somewhere with the cash flows. So, I'm gonna go ahead and copy across my EBIT formula and we can see that in those periods where we have to pay the advisory fees, that's definitely a big hit to our EBIT, and it was so historically as well. And now, I can also go ahead and copy across EBITDA and this will actually take us now to the end of our income statement. Again, we don't care about anything really below EBIT.