[normilet]

Hello All,

I'm new to the forum and just want to say thank you in advance for any help that is given, it is much appreciated.

I have been given a simple accounting exercise and have hit a stumbling block or two, it has been a few years since I have had to work on this kind of thing .

Basically I have been given an integrated P&L, Cash flow and Balance Sheet to complete. The idea is that Year 0 is the financial profile of a company the year prior to its notional acquisition by a Private Equity fund. My task is to complete Years 1-5 based on the below assumptions:

ASSUMPTIONS: P&L, CASHFLOW AND BALANCE SHEET

· Revenue growth of 5.0% p.a. Years 1-5.
· Gross and EBITDA Margins remain unchanged.
· Depreciation = Capex.
· Corporation Tax of 12.5% paid during the year
· Debtor, Stock and Creditor Days remain unchanged Years 0-5.

ASSUMPTIONS: BUY-OUT
· Company is acquired for 6.0x EBITDA.
· Same entry and exit multiple.
· Acquisition is funded 50/50 debt equity.
· The interest rate on the debt is 5%.

After this, I need to calculate the equity IRR and Money Multiple based on an exit at the end of year 5.

Basically everything listed in Year 0 has been given to me, I haven't edited any cells or added formulas etc, all numbers were already supplied.

I think I have the P&L figured out, based on the 5% revenue growth assumptions etc shown above. Not 100% certain that my assumption on depreciation is correct (comment in spreadsheet).

In the Cash flow, the only thing I'm uncertain on is the "Movement in Working Capital" line item, not sure if that is a heading or if it is something else to be calculated.

My biggest problem is the Balance Sheet. I have assumed that since there was -100 depreciation, then a 10% depreciation rate hold true on the fixed assets. Not sure what to do with stock, & debtors so I assumed they remained unchanging. Also unsure of my current liabilities and how to derive those. Bank debt I have assumed remains at -4500 but I'm not sure if that's where it supposed to go. I have also assumed that share capital remains the same and that retained earnings is the previous years retained earnings plus this years profit after tax (vaguely recall that being how that was calculated, I'm open to correction!).

Any help that could point me in the right direction and let me see where I am going wrong would be much appreciated.

Thanks,

T