Glossary

Term Definition
An annual amount representing the allocation of the cost
Amortization
of an intangible asset over a period of time.
Money spent by a company on acquiring or maintaining
Capital Expenditure (CapEx)
fixed assets such as property, plant and equipment.
The direct costs of producing the goods sold by a
company. Examples include the cost of raw materials,
Cost of Goods Sold (COGS)
distribution and labor directly involved in the production of the
goods.
An annual amount representing the allocation of the cost
Depreciation
of an tangible asset over a period of time.
The dividend payout ratio is the percentage of net income that
a company pays out to its shareholders as dividends. On the
Dividend Payout Ratio other hand, the part of net income that is not paid out to
shareholders is left for re-investment into the company to
provide for future growth.

A company's earnings before interest, taxes, depreciation and

amortization (EBITDA) is a common financial metric used as a
proxy for a company's operational profitability. However, it can
EBITDA be misleading in some circumstances, because it does not
include the cost of capital investments such as property, plant
and equipment, whose cost is recognised over time in the
depreciation and amortization line items.

A company's earnings before interest and taxes (EBIT) is an

financial metric that includes all income and expenses, except
EBIT
net interest expense and income tax. It is another common
proxy for a company's operational profitability.

Within large Excel files, at times, the file can freeze and not
F9 Key (Calculate the Workbook) / Fn+F9 on Mac calculate a new formula or change for some time. In this case,
hit the F9 key which should cause the workbook to calculate.

The average number of days that a company holds its

Inventory Days inventory before selling it. The lower the number, the more
efficient the company is at selling its stock.

Net working capital is the difference between a company's

current assets and current liabilities. For most companies, this
involves adding accounts receivable and inventory, and
subtracting accounts payable.

Taking this one step further, to calculate the Change in NWC

for a given period, the formula is Change in NWC (Period 2) =
NWC (Period 1) - NWC (Period 2).
Net Working Capital (NWC)
The formula may seem counterintuitive. An example will help
clear this up. For instance, if NWC(2) is 10 and NWC(1) is 6,
then the Change in NWC = 6 - 10 = -4. The change in NWC is
negative as it represents a use of cash in period 2 (i.e. to
increase the net current asset base from 6 to 10 in period 2,
this had to be paid for using cash, and hence represents a use
of cash).

An operating expense is an ongoing cost incurred in

running a business, that is not a direct cost. Examples include
Operating Expenses (OpEx)
head office costs, general and administrative costs, and
centralised marketing costs.
The average number of days that a company takes to pay its
suppliers. Also known as Days Payable Outstanding (DPO).
Payable Days
The higher the number, the longer it takes the company to pay
its suppliers.
The average number of days that it takes a company to collect
payment after a sale has been made. Also known as Days
Receivable Days
Sales Outstanding (DSO). The lower the number, the quicker it
is for the company to get paid.
 Forecast Assumptions

Dec-YE Unit FY20E FY21E FY22E FY23E FY24E

* Revenue

Cupcakes
Number of Units Sold # 100,000 110,000 119,900 129,492 138,556
Average Sale Price $ 4.00 4.16 4.33 4.50 4.68

Ice Cream
Number of Units Sold # 60,000 66,000 71,940 77,695 83,134
Average Sale Price $ 3.00 3.12 3.24 3.37 3.51

Drinks
Number of Units Sold # 50,000 55,000 59,950 64,746 69,278
Average Sale Price $ 2.50 2.60 2.70 2.81 2.92

* Costs

Cost of Goods Sold (COGS)

COGS per Cupcake $ 1.50 1.53 1.56 1.59 1.62
COGS per Ice Cream $ 0.80 0.82 0.83 0.85 0.87
COGS per Drink $ 1.10 1.12 1.14 1.17 1.19

Operating Expenses (OpEx)

Staff Costs $ 150,000 157,500 165,375 173,644 182,326
Occupancy Costs $ 60,000 61,800 63,654 65,564 67,531
Marketing Costs $ 10,000 10,500 11,025 11,576 12,155
Other Costs $ 5,000 5,250 5,513 5,788 6,078

Depreciation & Amortization (D&A)

Annual D&A % of revenue (5.0%) (4.8%) (4.5%) (4.3%) (4.0%)

* Cash Flow

Net Capital Expenditure (Capex) % of revenue (5.0%) (4.8%) (4.5%) (4.3%) (4.0%)
Change in Net Working Capital (NWC) % of revenue (1.0%) (1.0%) (1.0%) (1.0%) (1.0%)
Dividend Payout Ratio % 60.0% 60.0% 60.0% 60.0% 60.0%

* Other

Tax Rate % 21.0% 21.0% 21.0% 21.0% 21.0%

Debt Interest Rate % 4.0% 4.0% 4.0% 4.0% 4.0%
Cash Interest Rate % 1.0% 1.0% 1.0% 1.0% 1.0%

* END
 P&L Forecast

Dec-YE Unit FY20E FY21E FY22E FY23E FY24E

Cupcakes Revenue $ 400,000 457,600 518,735 582,644 648,366

Ice Cream Revenue $ 180,000 205,920 233,431 262,190 291,765
Drinks Revenue $ 125,000 143,000 162,105 182,076 202,614
Total Revenue $ 705,000 806,520 914,271 1,026,909 1,142,745
Growth % 14% 13% 12% 11%

Cupcakes COGS $ (150,000) (168,300) (187,116) (206,127) (224,967)

Ice Cream COGS $ (48,000) (53,856) (59,877) (65,961) (71,989)
Drinks COGS $ (55,000) (61,710) (68,609) (75,580) (82,488)
Gross Profit $ 452,000 522,654 598,669 679,242 763,300
Margin % 64% 65% 65% 66% 67%

Staff Costs $ (150,000) (157,500) (165,375) (173,644) (182,326)

Occupancy Costs $ (60,000) (61,800) (63,654) (65,564) (67,531)
Marketing Costs $ (10,000) (10,500) (11,025) (11,576) (12,155)
Other Costs $ (5,000) (5,250) (5,513) (5,788) (6,078)
EBITDA $ 227,000 287,604 353,102 422,670 495,211
Margin % 32% 36% 39% 41% 43%

D&A $ (35,250) (38,310) (41,142) (43,644) (45,710)

EBIT (Operating Income) $ 191,750 249,294 311,960 379,026 449,502
Margin % 27% 31% 34% 37% 39%

Net Interest $ (15,850) (13,909) (11,256) (7,821) (3,539)

Profit Before Tax (PBT) $ 175,900 235,386 300,704 371,206 445,962
Margin % 25% 29% 33% 36% 39%

Tax Expense $ (36,939) (49,431) (63,148) (77,953) (93,652)

Net Profit After Tax (NPAT) $ 138,961 185,955 237,556 293,253 352,310
Margin % 20% 23% 26% 29% 31%

Dividend Payout Ratio % 60% 60% 60% 60% 60%

Gross Dividends $ 83,377 111,573 142,534 175,952 211,386

* END
 Cash Flow Forecast

Dec-YE Unit FY19A FY20E FY21E FY22E FY23E FY24E

EBITDA $ 227,000 287,604 353,102 422,670 495,211

Taxes $ (36,939) (49,431) (63,148) (77,953) (93,652)
Change in NWC $ (7,050) (8,065) (9,143) (10,269) (11,427)
Net Interest $ (15,850) (13,909) (11,256) (7,821) (3,539)
Net Capex $ (35,250) (38,310) (41,142) (43,644) (45,710)
Dividends $ (83,377) (111,573) (142,534) (175,952) (211,386)
Net Cash Flow $ 48,534 66,317 85,880 107,032 129,497
Debt Repayment $ (48,534) (66,317) (85,880) (107,032) (92,237)
Cash to Balance Sheet $ - - - - 37,259

Opening Cash $ 15,000 15,000 15,000 15,000 15,000

Cash to Balance Sheet $ - - - - 37,259
Closing Cash $ 15,000 15,000 15,000 15,000 15,000 52,259

* Supporting Debt Schedule

Opening Debt $ 400,000 351,466 285,149 199,269 92,237

Debt Repayment $ (48,534) (66,317) (85,880) (107,032) (92,237)
Closing Debt $ 400,000 351,466 285,149 199,269 92,237 -

* END
Outputs

Example Chart (Cupcake Volume - 2020-24)

160,000

138,556
140,000
129,492
119,900
120,000
110,000
100,000
100,000

80,000

60,000

40,000

20,000

0
FY20E FY21E FY22E FY23E FY24E

Forecast Revenue (2020-24) - Column Chart

Chart Title
700,000

600,000

500,000

400,000

300,000

200,000

100,000

-
1 2 3 4 5

Cupcakes Revenue $ Ice Cream Revenue $ Drinks Revenue $

Forecast Debt (2020-24) - Line Chart

Chart Title
500000

400000

300000

200000

100000

0
1 2 3 4 5 6

-100000

-200000

Opening Debt $ Debt Repayment $

Forecast Cash (2020-24) - Area Chart

Chart Title

60000

50000

40000

30000

20000

10000

0
1 2 3 4 5 6
Cash to Balance Sheet $ Closing Cash $

Cupcakes Operating Metrics (2020-24) - Combination Column & Line Chart

Chart Title

160000

140000

120000

100000

80000

60000

40000

20000

0
1 2 3 4 5

Cupcakes Number of Units Sold # Average Sale Price $