To underpin our balance sheet, we're going to need to do some base calculations.

The first switch is pp e.

A base calculation will refer to the last ending and it will add and subtract to get to the next ending.

The CapEx here is given in the assumptions as a percentage of sales.

The depreciation is given as a percentage of prior year.

And so if you take that literally you could take prior year or just beginning pp and E, and that needs to be a negative figure.

So we may have to add a times minus one to that like I've just done.

We would then close the base and that could then be rolled on and we would predict their PP e Every year.

We're going to do the same thing with intangibles, but it's a little more simple.

Our amortization is simply given as a flat amount, and that is the only interaction with intangibles.

In this model. You can see there's no forecasted acquisition of intangibles, and that's mainly because we wouldn't be forecasting the acquisition of other companies.

There is an argument that we should be adding in capitalized development costs, but we haven't gone that deep with this model.

The equity base needs to be built up from the previous ending, so we need to go and find that in the p and l, excuse me, the balance sheet, the last equity is line 93.

That will become the next equity.

This is a liability effectively that you have to your shareholders.

And whenever you make net income, which we have from the p and l, that net income represents a greater liability because any net income is owned by the shareholders.

When you pay dividends, you are effectively resolving that liability.

Now we're looking for dividends and we have dividends.

We have them up here, but we only have them per share.

What we'll need to do is think carefully about how many dividends we're going to pay.

Are we going to pay dividends to our basic shareholders? So the ones that are already there or our diluted shareholders, all of them that will be there one day and the answer is basic, is probably more accurate.

You are probably only going to pay dividends to the shares that are outstanding as opposed to the ones which are diluted, which may include shares that do not exist yet, such as share options that have not been exercised.

This means the dividends will be the dividend per share multiplied by the basic assay.

That will be a negative 'cause. As I said earlier, you are resolving that liability and that then completes our equity base.

The next area is not really a base, it's a helpful calculation.

You can see there's no opening and closing, so it doesn't really fulfill the definition of a base calculation.

What it does is it figures out operating working capital, which will be then a very useful shortcut when we create the cash flow statement because this thing will drive the cash flow statement.

We can't just start forecasting from 24 because we'll need a 2324 movement for the cash flow statement.

This means at the very least, we need to find OWC in the past year, but we may as well start earlier than that.

We'll need to go and find the current operating assets.

So cash is financial receivables are operating, inventories are operating.

Other, we don't exactly know, but we tend to assume is operating.

Anything below that will be non-current and so excluded from current.

And so outside the scope of OWC for operating liabilities, we'll go and do the same with liabilities.

Debt is financial in nature, so instead we have a really nicely packaged line there.

It just says current operating liabilities.

So that was a bit easier.

We can now find the OWC by finding the gap between them.

You see, Axo is sustaining usually a positive operating working capital, and that means that this would be a cash drain on them.

You could think about it as tins of paint.

They need to be built. They sit around on shelves and the longer they sit around, the more cash that is occupied by those tins of paint that could be spent on machines expansions, m and a activity.

And so broadly speaking, a positive figure there that's getting bigger is bad and a negative FA figure there that's getting more negative is good.

Although of course there are caveats having done the last calculation, you'll notice it's not really working for 2024, and that's 'cause it actually relies on forecasts.

So we'll leave it there and it will populate itself later.