By Kenny Whitelaw-Jones in Financial Modelling Handbook — Jan 4, 2022

Fixed asset & 100% equity financing - solution

Hopefully, as soon as you knew you were dealing with balance sheet items, you already knew you would be dealing with new corkscrews.

Here's the walkthrough.

Download the solution file for this lesson:

To obtain the worked example file to accompany this chapter buy the financial modelling handbook.

Step 1: Set up a new sheet

We need a new sheet for the calculations related to our Fixed assets.

Copy the Template sheet using Skill 9: How to create a new sheet.

I have called the asset "Asset" - you may want to choose a different label.

When we copy the Tmp sheet, we get a couple of free corkscrews. All we need to do to get this setup therefore is:

Delete the 4 line corkscrew (we need the 7 line version as we have an initial balance to inject)
Rename the labels. Use Ctrl+h to search and replace on [xxx].
Add our initial balance of $100m

We will add our share capital corkscrew on the equity sheet.

First, create space and a section heading, then add the new corkscrew using Skill 8: How to create a new balance corkscrew.

We'll add our $100m initial balance as we did with Fixed assets.

At this stage, we are not going to model the flows, but it's helpful to rename the placeholders so that we know what's going to go in there.

Fixed asset corkscrew:

Download flow: Depreciation (could also be asset retirement or disposals in other contexts

Share capital corkscrew:

Using skill 2: How to create a link.

Since we are adding $100m to both sides of the balance sheet, the balance sheet continues to balance.

As usual, run through the Section Completion Checklist before moving on.

Download the model complete to this point:

To obtain the worked example file to accompany this chapter buy the financial modelling handbook.

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