Excel spreadsheet

Sheet1

Key Check Figures
Schedules
Schedule B	July	August	September	Sched E15
Total collections	$2,274,993	$2,572,479	$2,858,704	$929,200
Schedule D
COGS	$1,692,384	$1,909,842	$2,156,968
Schedule E
Total Payments	$2,076,010	$1,985,264	$2,177,350
Projected Income statements
Net Income before Taxes	$125,877	$161,323	$203,086
Projected Balance Seet	September
Accounts Receivable	$3,079,662
Inventory	$1,587,432
Fixed Assets, net of depreciation	$1,522,000
Total Assets	$6,230,594
Accounts Payable	$896,796
Projected SCF	July	August	September
Cash excess (deficit)	-$527,715	-$166,635	-$206,252

1

EXCEL PROJECT: FINANCIAL PLANNING AND MODELING CASE

(100 points)

GENERAL INSTRUCTIONS: READ THIS ENTIRE ASSIGNMENT CAREFULLY

BEFORE STARTING YOUR WORK. Failure to follow the instructions will result in point

deductions. Late Projects will be subject to a 10 point for each day (or a fraction of a day) and

will not be accepted after the third day following the deadline.

Download all files from the Canvas course page, including the accompanying excel template,

and save

them. DO NOT COPY AND PASTE THE EXCEL TEMPLATE INTO A NEW

WORKBOOK AND DO NOT WORK THROUGH THE WEB BROWSER. Use formulas

in all spreadsheet cells and reference given data cells as necessary. You will NOT earn credit

for ENTERING HARDCODED VALUES. BE SURE TO REGULARLY SAVE YOUR

WORK. Excuses about lost work will not be accepted. Maintain a second (backup) copy of

your file as well.

PROJECT OBJECTIVES

The project requires to complete an Excel-based financial model template. Such models are

extensively used in business planning, decision-making, and for obtaining business financing.,

making but also emphasizes critical thinking and general business skills. Specifically, the case

has the following objectives: (1) to obtain experience using Excel within a planning and decision

context; (2) to integrate a range of managerial and financial accounting concepts; and (3) to

reinforce financial statement relationships through linking projected financial statements.

You will complete a financial planning model that is derived from a set of assumptions and link

together statements of projected cash, income and balance sheets that articulate. An Excel

template, which is available for downloading, is structured with a separate worksheet (or tab) for

each of the following sections: Sheet (1) Assumptions; Sheet (2) Supporting Schedules; Sheet (3)

Projected Income Statement and Balance Sheet; and Sheet (4) Projected Cash Flow.

Sheet (2) provides supporting schedules for detailed computations, which in turn links to the

projected income statements and balance sheet contained within Sheet (3), along with projected

cash flow in Sheet (4).

2

To work correctly, all cells of your model should be linked together via formulas, or cell

references, across all worksheets. (A 5th sheet labeled, Graph contains data to produce a cost-

volume-profit graph from current period, baseline information. You should use the ChartWizard

in Excel to create the graph. The Excel template already contains the key assumptions as well as

some formulas.

Within a real-life practice situation, you would need to independently develop and obtain support

for the necessary assumptions that have been provided to you. In Part I of the Excel case, you

should complete the model formulas and linkages to Sheets (2), (3) and (4

To accomplish this, the financial model must articulate (i.e., interconnect, or link) across all

schedules and statements. Thus, a change in assumption should flow through and automatically

update all related schedules in Sheet (2) and projected statements in Sheets (3) and (4). This

requires entering formulas within the cells to calculate the required values, rather than

hardcoding values into the cells.

OUT-WEST PRODUCTS, INC. CASE

You’re Hired!

Cynthia Valley formed Out-West Products, Inc. (OWP) in 2020 when she obtained an exclusive

franchise to nationally distribute a pen-based input device that provides effortless communication

with standard personal computers. Recent high sales growth of the base model pen-based input

device (PID-B), along with expected sales growth for a new premium model (PID-P), requires

adding new management team members. The Company hires you as a management trainee to

assume direct responsibility for financial planning activities. Your first assignment is to prepare

a financial plan for the next three months, starting July 1.

CASH COOLECTION PATTERN is as follows:

30% of a month’s sales are collected by month-end. An additional 40% is collected in the

month following, and the remaining 30% is collected in the second month following sale.

Thus far bad debts have been negligible.

Since OWP’s policy is to never stock out of its pen-based input devices (PIDs), and potentially

forfeit market share to competitors, the Company maintains fairly high inventory levels.

Therefore, desired ending inventories are equal to 70% of the next month’s sales in units.

3

Prior to June, OWP sold only the basic model PID-B at a price of $230 per unit. The PID-B

costs OutWest Products $155 each from the manufacturer and it pays for purchases as follows:

CASH Disbursements PATTERN is as follows:

60% in the month of purchase and the remaining 40% the following month.

The company’s monthly operating expenses (organized by cost behavior) are also provided in the

Assumptions Sheet of the excel template. All operating expenses are paid during the month, in

cash, with the exception of depreciation and insurance expenses.

New fixed assets, including personal computers and office furniture, will be purchased

during September for $90,000 cash. Ignore depreciation for these newly acquired since they

are insignificant. The Company declares dividends of $20,000 each quarter, payable in the

first month of the following quarter.

OWP’s actual balance sheet at June 30, 2020 is provided at the end of the template’s

Assumptions Sheet.

However, the Company also desires a minimum ending cash balance each month of $35,000

to meet regular operating expenses. Assume borrowings occur at the beginning of the

period. To further simplify, assume no tax consequences.

REQUIRED:

Financial Planning Model (100 Points)

Download the Excel template from your Blackboard course page – DO NOT MODIFY THE

FORMAT OF THE TEMPLATE. Save the file and do not attempt to complete the template

directly from the course page and do not copy and paste sheets into a new workbook. Case

assumptions have already been provided in the template’s assumptions sheet. If necessary, it

may be helpful to review Chapter 3 (CVP Analysis) and Chapter 6 (Budgeting) in your textbook

prior to beginning the project. Be sure to regularly save your work as you complete the

model. Remember that you must use formulas so that any changes in input data

automatically update your model. Otherwise, your model will not work adequately, and

you will lose points. First, complete the sheets of the Excel template, as indicated below.

Complete Sheet 2 (Schedules)

1) Sales and merchandise purchase plans with supporting schedules. (40 points)

4

a) A sales plan by month and in total - including a schedule of projected cash collections

from sales

and accounts receivable, by month and in total.

b) A purchases plan in units and in dollars, including a schedule of projected cash payments

for

purchases, by month and in total.

[Note: The cost of inventory on hand is released to cost of goods sold before costs for the

purchase of additional units (i.e., use a FIFO cost flow assumption for all months).]

Complete Sheet 3 (Inc. St. and Bal. Sheet)

2) Projected contribution format income statements by month and in total. (20 points)

3) Projected balance sheet for the quarter as of September30. (20 points)

Complete Sheet 4 (Statements of Cash Flow)

4) Projected statements of cash by month and in total – internal budget format. (15 points)

Graph (5 points)

Use the data in the Graph worksheet to create a cost-volume-profit graph.

Highlight the cells A13:H16. Click insert and Select a line chart type for the CVP graph (your

choice of style).

Be sure that your graph closely resembles a standard CVP graph or points will not be awarded.