To fill in the balance sheet, there are a few things we need to do First of all we need to fill the subtotals for the historical periods We then need to use the forecast assumptions to come up with our forecast figures Two items that we won't look at here will be net PP&E and equity We need to do calculations for them, so we'll do separate calculations Let's do the historical subtotals first So I total up my current assets and I'm going to copy that subtotal to the right, including into period 1 Total assets, I sum up the current assets and the net PP&E and again copy into period 1 Current liabilities sum up Total liabilities sum up And total liabilities and equity need summing So we've done all of our historical subtotals and we've done our subtotals for period 1 check To do a simple version of this, I'm going to take total liabilities and equity and I'm going to subtract the total assets If the balance sheet balances then this should come to zero And it does! Fantastic, a balanced balance sheet, nothing better in the world I'm going to copy that to the right, hope for zeros across and indeed that's what we get We're going to also leave cash out because we'll need the cash flow statement to fill that figure in So we start with accounts receivable, let's go to the top and find the accounts receivable assumption There it is! 8.2% multiplied by revenues So now we go up, find our revenue line of 115.5 That gives me accounts receivable of 9.5 Next up inventories! We do the same thing, go up to the top Find our inventories assumption, 9.1% times by COGs Net PP&E, we said we would leave that one off for now. We need to do a calculation So I now go to accounts payable, up to the top, find the assumption 7.3% of COGs Accrued expenses up to the top, find that assumption and it's 54.5% of SG&A costs Again, let's go looking into our income statement, find SG&A (selling, general and admin) Long-term debt, up to our assumptions again And I can see we have an increase or decrease in long-term debt of 10 So I need to add that into last year's figure to make that an increase or decrease So it's gone up to 30 Equity, we said we would leave that one out, so that is a calculation So our balance sheet for period 1 has been done apart from cash, equity and net PP&E We now check that our balance sheet balances and unfortunately it is unbalanced by 25.8 Why is that? Because we have missed off those three items: cash, net PP&E and equity