05 Operational Modeling
What are the operational schedules?
1. revenue
2. cost
3. working capital
4. assets
5. depreciation
6. income tax
revenue schedule
1. days in period
OPERATIONAL
1. sales volume
2. plant capacity
3. operational efficiency
VOLUME
1. sales volume growth
2. sales volume
PRICING
1. pricing increases
2. unit price
REVENUE
1. sales volume
2. sales price
3. revenue
Capacity Exceeded?
What is the relation between operational leverage and revenue volatility?
low OL ==> low RV
high OL ==> high RV
cost schedule
1. sales volume
2. inflation
VARIABLE COSTS
1. per unit
2. total
FIXED COSTS
1. per unit
2. total
SUMMARY
1. per unit
2. total
working capital schedule
1. days in period
2. revenue
3. COGS
AMOUNTS PER DAY
1. AR
2. INV
3. AP
TOTAL AMOUNTS
1. AR
2. INV
3. AP
NET WORKING CAPITAL
1. current assets
2. current liabilities
3. NWC
"cash from WC items"
asset schedule
1. CapEx
2. Blended DEP rate
PROPERTY, PLANT & EQUIPMENT (acc. basis)
1. beginning
2. capex
3. accounting DEP
4. ending
TAX BASIS
1. beginning
2. capex
3. tax DEP
4. ending
What is the relation between accounting income and tax income?
tax income = accounting income (or EBT)
+ accounting DEP
- tax DEP
- use of tax losses
What are the 3 types of tax expenses and how can we calculate them?
1. Total Tax Expense = accounting income * tax rate
2. Current Tax Expense = tax income * tax rate
3. Deferred Tax Expense = Total Tax - Current Tax