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4png also note that we do not complete the interest

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4.png· Also, note that we do not complete the “Interest Expense (Income)” row as we will have arelook a the Income Statement at a later stage.· Interest Expense and Interest Income is covered in the Debt Schedule.· We have also not calculated Depreciation and Amortization which has already been included inthe Cost of SalesThis completes the Income Statement (atleast for the time being!)#4- Working Capital ScheduleNow that we have completed the Income statement, the next step in this Financial Modelingtraining course is to look at the Working Capital Schedule—Below are the steps that are to befollowed for Working Capital ScheduleStep 4A—Link the Net Sales and Cost of Sales-1a.pngStep 4B—Reference the Balance Sheet Data related to working capital· Reference the past data from the balance sheet· Calculate net working capital· Arrive at increase/ decrease in working capital· Note that we have not included short term debt and cash and cash equivalents in the workingcapital. We will deal with debt and cash separately.-2.pngStep 4C—Calculate the Turnover Ratios· Calculate historical ratios and percentages· Use the ending or average balance· Both are acceptable as long consistency is maintained
-3.pngStep 4D—Populate the assumptions for future working capital items· Certain items without an obvious driver are usually assumed at constant amounts· Ensure assumptions are reasonable and in line with the business-4.pngStep 4E—Project the future working capital balances-5.pngStep 4F—Calculate the changes in Working Capital· Arrive at Cash Flows based on individual line items· Ensure signs are accurate!-5.pngStep 4G—Link up the forecasted Working Capital to the Balance Sheet-7.pngStep 4H—Link Working Capital to the Cash Flow Statement-8.png#5—Depreciation ScheduleWith the completion of the working capital schedule, the next step in this Financial ModelingTraining Course is the project the capital expenditure requirements of Colgate and project theDepreciation and Assets figures.Colgate 2013–10K, Page 49
· Depreciation and Amortization is not provided as a separate line item, however it is included inthe cost of sales· In such cases, please have a look at the Cash flow statements where you will find the

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Term
Spring
Professor
lenny
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