In model three a, we're being asked to forecast an income statement, balance sheet, and cashflow statements. Let's start by having a quick look at the income statements. So in the income statements, we can see we have some figures already for period minus one and zero. We've got our historical figures. If we go a bit further up the page, we can see we have some ratios and statistics based on those historical figures.

We've then got some forecast assumptions. So I can see that revenue growth is forecasted to be 5% in period one, and what we need to do is thus forecast that extra 5% revenue and cogs and SG&A in the income statements. So let's start doing that now. So in the income statements, I do notice that we've got some subtotals missing in the historical years, so let's fill those in first.

So I start by summing up revenue cogs and depreciation to get gross profit of 40. Next up is operating profits, which is the sum of gross profit and SG&A.

Next up, net income being the sum of operating profit and tax expense. So we've got a net income of 20. I'm going to copy each of those subtotals into period zero and also into period one by selecting those cells and pressing control R to copy to the right.

Great. I'm now gonna start forecasting period one. So having looked at the assumption at the top, I know it's going to be 5% growth based on last year. So I right equals 1 plus go up to the very top, grab that 5% and multiply that by last's revenue of 110. Thus this is revenue is 115.5.

Next we move on to cogs. Again, I go up to my assumptions at the top and cogs is 50% of revenue.

Next up, depreciation, again, back up to the top. Interesting one. This one, my depreciation assumption is 27.5% of the beginning net PP&E. Well, that's the same as your net PP&E from last year. So I need to go down to my balance sheets and find net. PP&E for last year was 45 plus. I've got gross profit already done now of 45.4 SG&A costs are next 10% of revenues. So 10% times by my revenue line. 115.5 operating profit is now done. And the last one is tax expense, again, back up to the top. And my tax expense is 25% of operating profits.

So underneath the income statement, we have an extra last line here earnings per share. My earnings per share is net income divided by my shares outstanding. So that's 2.00 in period minus one. I can copy that to the right. Now I've got div 0 in period one because I don't have any shares outstanding there at the moment. So let's go back up to our assumptions and there is our assumption for shares outstanding. It's still 10, thus I've now got earnings per share into the forecast period. Period 1 of 2.54.