Question Three Statement Modeling
How would you assume Cash and Equity if you have to model a 3 Statement Model and you haven’t given these two Parameters?
How would you assume Cash and Equity if you have to model a 3 Statement Model and you haven’t given these two Parameters?
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When modeling a three-statement model without explicit initial values for cash and equity, you can approach it by making reasonable assumptions based on typical industry standards or historical data of the company if available. Here’s how you can handle it:
Assuming Initial Cash:
Assuming Initial Equity:
Documentation and Justification:
By following these steps, you can construct a more informed and realistic three-statement model even when some initial parameters are not directly provided.
Sources: The Three Most Common Technicals, Help with 3-Statement Model Test, REPE Entity level investment, DCF Modeling Course ~ Pre-training text.pdf, https://www.wallstreetoasis.com/forum/asset-management/qa-equity-research-analyst-at-top-3-am?customgpt=1
Which type of equity would you use ? Stock issuances or direct investments ?
Cash on BS is linked to the ending balance of the cash flow statement. Statement of equitys closing balance is opening balance + net income - dividend paid.
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