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Financial Analysis, Planning and Forecasting Theory and Application By Alice C. Lee San Francisco State University John C. Lee J.P. Morgan Chase Cheng F. Lee Rutgers University Chapter 23 Simultaneous-Equation Models for Financial Planning

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Outline 23.1 Introduction 23.2 Warren and Shelton model 23.3 Eastman Kodak as a case study 23.4 Francis and Rowell (FR) model 23.5 Summary Appendix 23A. Procedure of Using Microsoft Excel to Run FINPLAN Program Appendix 23B. Program of FINPLAN With An Example

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23.1 Introduction

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23.2 Warren and Shelton model

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TABLE 23.1 The Warren and Shelton Model (Cont.) III. Financing the desired level of assets

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23.2 Warren and Shelton model TABLE 23.1 The Warren and Shelton Model (Cont.)

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23.2 Warren and Shelton model

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TABLE 23.2 List of unknowns and list of parameters provided by management (Cont.)

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23.2 Warren and Shelton model TABLE 23.3 FINPLAN input format (Cont.)

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23.2 Warren and Shelton model TABLE 23.3 (Cont.) Historical or Base-Period input: Balance Sheet

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23.2 Warren and Shelton model TABLE 23.3 (Cont.) Historical or Base-Period input: Balance Sheet

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23.2 Warren and Shelton model TABLE 23.3 (Cont.) Historical or Base- Period input: Income Statement

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23.2 Warren and Shelton model TABLE 23.3 (Cont.) Historical or Base-Period input: Income Statement

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23.2 Warren and Shelton model TABLE 23.3 (Cont.) Statement of Cash Flows

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23.2 Warren and Shelton model TABLE 23.3 (Cont.) Retained Earnings Statement

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23.2 Warren and Shelton model TABLE 23.3 (Cont.) Retained Earnings Statement The above data of financial statements is downloaded from the COMPUSTAT dataset. @NA represents data is not available.

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23.3 Eastman Kodak as a case study Data sources and parameter estimations Procedure for calculating WS model

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23.3Eastman Kodak as a case study

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Procedure for Calculating WS Model By using the data above, we are able to calculate the unknown variables below: (1) Sales t = Sales t-1 (1 + GCALS t ) = 11,703.7 1.0726 = 12,553.38 (2) EBIT t = REBIT t-1 Sales t = 0.1967 12,553.38 = 2,469.25 (3) CA t = RCA t-1 Sales t = 0.1368 12,553.38 = 1,717.30

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23.3 Eastman Kodak as a case study (4) FA t = RFA t-1 Sales t = 0.6805 12,553.38 = 8,542.58 (5) A t = CA t + FA t = 1,717.30 + 8,542.58 = 10,259.88 (6) CL t = RCL t-1 Sales t = 0.1698 12,553.38 = 2,131.56 (7) NF t = (A t – CL t – PFDSK t ) – (L t-1 – LR t ) – S t-1 – R t-1 – b t {(1 – T t )[EBIT t – i t-1 (L t-1 – LR t )] – PFDIV t } = (10,259.88 – 2,131.56 – 0) - (4,880.60 – 553.70) – 716.1 – 9,006.20 – 0.6054 {(1-0.3524) (2,469.25 - 0.0631 (4,880.60 – 553.70) – 0} = -6,781.92

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23.3 Eastman Kodak as a case study (12) i t L t = i 0 (L 0 – LR t ) + i e t NL t = 0.0631 (4,880.60 – 553.70) + 0.0631 NL t = 273.03 + 0.0631 NL t (8) NF t + b t (1-T)[i NL t + U L t NL t ] = NL t + NS t -6,781.92 + 0.6054(1 - 0.3524)(0.0631NL t + 0.03NL t ) = NL t + NS t -6,781.92 + 0.0365 NL t = NL t + NS t (a) NS t +0.9635NL t = -6,781.92 (9) L t = L t-1 – LR t + NL t (b) L t = 4,880.60 – 553.70 + NL t L t – NL t = 4,326.90 (10) S t = S t-1 + NS t (c) -NS t + S t = 716.1 (11) R t = R t-1 + b t {(1 – T t )[EBIT t – i t L t – U L t NL t ] – PFDIV t } = 9,006.20 + 0.6054{0.6476[2,469.25 – i t L t - 0.03NL t ]}

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23.3 Eastman Kodak as a case study Substitute (12) into (11) R t = 9,006.20 + 0.6054{0.6476[2,469.25 – (273.027 + 0.0631NL t ) - 0.03NL t ]} = 9,006.20 + 861.04 - 0.0357NL t (d) R t = 9,867.24 - 0.0357NL t (13) L t = (S t + R t )K t L t = 1.2446S t + 1.2446R t (e) L t – 1.2446S t – 1.2446R t = 0 (b) – (e) = (f) 0 = (L t – NL t – 4,326.90) – (L t - 1.2446S t - 1.2446R t ) 4,326.90= 1.2446S t + 1.2446R t – NL t (f) – 1.2446(c) = (g) 4,326.9-4,880.7= (1.2446S t - 1.2446R t – NL t ) – 1.2446(-NS t + S t ) 3,435.64= 1.2446NS t - NL t + 1.2446R t

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23.3 Eastman Kodak as a case study (g) – 1.2446(d) = (h) 3,435.64 - 12,280.77 = (1.2446NS t – NL t + 1.2446R t ) – 1.2446(.0494NL t + R t ) - 8,845.13 = 1.2446NS t – 1.06148NL t (h) – 1.2446(a) = (i) 1.2446NS t – 1.06148NL t – 1.2446(NS t + 0.9505NL t ) = - 8,845.13 + 8,440.78 NL t = 180.15 Substitute NL t in (a) NS t + 0.9635(180.15) = -6,781.92 NS t = -6,955.49

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23.3 Eastman Kodak as a case study Substitute NL t in (b) L t = 4,880.60 – 553.70 + 180.15 = 4,507.05 Substitute NS t in (c) 10,159.65 + S t = 716.10 S t = -6,239.39 Substitute NL t in (d) R t = 9,867.24 - 0.0357(180.15) R t = 9,860.81 Substitute NL t L t in (12)… i t (4,505.76) = 273.027 +0.0357(180.15) i t =0.0631

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23.3 Eastman Kodak as a case study (14) EAFCD t = (1 – T t )(EBIT t – i t L t – U L t NL t )- PFDIV t = 0.6476 [2,469.25 – (0.0631)(4,505.76) - 0.0631(178.86)] = 1,407.55 (15) CMDIV t = (1 – b t )EAFCD t = 0.3946(1,407.55) = 555.42 (16) NUMCS t = X 1 = NUMCS t-1 + NEWCS t X 1 = 461.10 + NEWCS t (17) NEWCS t = X 2 = NS t / (1 – U s t ) P t X 2 = - 6,955.49 / (1 - 0.1016)P t (18) P t = X 3 = m t EPS t X 3 = 23.70(EPS t )

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23.3 Eastman Kodak as a case study (19) EPS t = X 4 = EAFCD t / NUMCS t X 4 = 1,407.55 / NUMCS t (20) DPS t = X 5 = CMDIV t / NUMCS t X 5 = 555.42 / NUMCS t (A) = For (18) and (19) we obtain X 3 = 23.70(1,407.55) / NUMCS t =33,452.55/X 1 Substitute (A) into Equation (17) to calculate (B) (B) = -6,955.49 / (1-0.1016)(23.70)(1,407.55) / X 1 (B) = 0.2321X 1

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23.3 Eastman Kodak as a case study Substitute (B) into Equation (16) to calculate (C) (C) = X 1 = 461.10 - 0.2321X 1 (C) = X 1 = 374.24 Substitute (C) into (B)… (B) = 0.3231X 1 (B) = 116.92 From Equation (19) and (20) we obtain X 4, X 5 and X 3 X 4 = 1,411.5 / 374.24 = 3.76 X 5 = 555.42 / 344.24 = 1.48 X 3 = 23.70(3.76) = 89.11

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23.3 Eastman Kodak as a case study The results of the above calculations allow us to forecast the following information regarding Anheuser-Busch in the 2000 fiscal year ($ in thousands, except for per share data): Sales = $12,553.38 Current Assets = $1,717.30 Fixed Assets = $8,542.58 Total Assets = $10,259.88 Current Payables = $2,131.56 Needed Funds = ($6,781.92) Earnings Before Interest and Taxes = $2,469.25 New Debt = $180.15 New Stock = ($6,955.49) Total Debt = $4,507.05 Common Stock = ($6,239.39) Retained Earnings $9,858.34 Interest Rate on Debt = 6.31% Earnings Available for Common Dividends = $1,407.55 Common Dividends = $555.42 Number of Common Shares Outstanding = 374.24 New Common Shares Issued = 86.86 Price per Share = $89.11 Earnings per Share = $3.76 Dividends per Share = $1.48

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23.3 Eastman Kodak as a case study TABLE 23.4 The Comparison of Financial Forecast of Anheuser-Busch Companies, Inc.: Hand Calculation and FinPlan Forecasting.

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23.3 Eastman Kodak as a case study TABLE 23.4 The Comparison of Financial Forecast of Anheuser-Busch Companies, Inc.: Hand Calculation and FinPlan Forecasting. (Cont.)

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23.3 Eastman Kodak as a case study TABLE 23.5 FINPLAN input

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23.3 Eastman Kodak as a case study TABLE 23.6 Pro forma balance sheet of Anheuser-Busch Companies, Inc.: 2000-2003

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23.3 Eastman Kodak as a case study TABLE 23.7 Pro forma income statement of Anheuser-Busch Companies, Inc.: 2000-2003

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23.3 Eastman Kodak as a case study TABLE 23.8 Results of sensitivity analysis

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23.4 Francis and Rowell (FR) model The FR model specification A brief discussion of FR’s empirical results

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23.4 Francis and Rowell (FR) model TABLE 23.9 List of variables for FR model.

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23.4 Francis and Rowell (FR) model TABLE 23.9 List of variables for FR model. (Cont.)

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23.4 Francis and Rowell (FR) model TABLE 23.9 List of variables for FR model. (Cont.)

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23.4 Francis and Rowell (FR) model TABLE 23.9 List of variables for FR model. (Cont.)

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23.4 Francis and Rowell (FR) model TABLE 23.10 List of equations for FR Model.

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23.4 Francis and Rowell (FR) model TABLE 23.10 List of equations for FR Model. (Cont.)

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23.4 Francis and Rowell (FR) model TABLE 23.11 Sector interdependence

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23.4 Francis and Rowell (FR) model TABLE 23.12 Variable interdependence within sector seven

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23.4 Francis and Rowell (FR) model TABLE 23.13 Transformation of industry sales moments to company NIAT and EBIY moments

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23.4 Francis and Rowell (FR) model TABLE 23.13 Transformation of industry sales moments to company NIAT and EBIY moments (Cont.)

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23.4 Francis and Rowell (FR) model TABLE 23.13 Transformation of industry sales moments to company NIAT and EBIY moments (Cont.) (Cont.)

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23.4 Francis and Rowell (FR) model TABLE 23.13 Transformation of industry sales moments to company NIAT and EBIY moments (Cont.) (Cont.)

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23.4 Francis and Rowell (FR) model TABLE 23.13 Transformation of industry sales moments to company NIAT and EBIY moments (Cont.) (Cont.)

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23.4 Francis and Rowell (FR) model

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23.5 Summary Two simultaneous-equation financial planning models are discussed in detail in this chapter. There are 20 equations and 20 unknowns in the WS model. Annual financial data from Anheuser-Busch Co. are used to show how the WS model can be used to perform financial analysis and planning. A computer program of the WS model is presented in Appendix B. The FR model is a generalized WS financial-planning model. There are 36 equation and 36 unknown in the FR model. The two simultaneous-equation financial-planning models discussed in this chapter are an alternative to Carleton's linear-programming model, to perform financial analysis, planning, and forecasting.

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Appendix 23A. Appendix 23A. Procedure of Using Microsoft Excel to Run FINPLAN Program

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The program of FinPlan is available on the Website: http://www.pegasus.rutgers.edu/~wpthttp://www.pegasus.rutgers.edu/~wpt

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Appendix 23B. Program of FINPLAN With An Example This program is composed under Visual Basic Application (VBA) environment. Option Explicit Sub FinPlan() Dim i As Integer 'Looping control variable Dim bNYEARFound As Boolean 'Check if Year Being Simulated is found Dim NDATE As Integer 'Year immediately preceeding the first forecasted year Dim NUMVR As Integer 'Variable code number Dim NYEAR() As Integer 'Year being simulated Dim N As Integer '1 The number of years to be simulated Dim SALES() As Double '2 Sales in the simulation year Dim GSALS() As Double '3 Growth rate of sales Dim ORATE() As Double '4 Operating income rate (EBIT/SALES) Dim T() As Double '5 Federal income tax rate Dim CARAT() As Double '6 Ratio of current assets to sales Dim FARAT() As Double '7 Ratio of fixed assets to sales Dim CLRAT() As Double '8 Ratio of current liabilities to sales Dim ZL() As Double '9 Long term debt Dim ZI() As Double '10 Interest rate on total debt

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Appendix 23B. Program of FINPLAN With An Example Dim ZIE() As Double '11 Interest rate on new debt Dim ZLR() As Double '12 Debt repayments Dim PFDSK() As Double '13 Preferred stock Dim PFDIV() As Double '14 Preferred dividends Dim S() As Double '15 Common stock Dim ZNUMC() As Double '16 Cummulative number of common stock shares outstanding Dim R() As Double '17 Retained earnings Dim B() As Double '18 Retention rate Dim ZK() As Double '19 Desired debt to equity ratio Dim PERAT() As Double '20 Price / Earnings ratio Dim UL() As Double '21 Underwriting commission of new debt Dim US() As Double '22 Underwriting commission of new stock

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Appendix 23B. Program of FINPLAN With An Example Dim O() As Double 'Operating income Dim CA() As Double 'Current assets Dim FA() As Double 'Fixed assets Dim A() As Double 'Total assets Dim CL() As Double 'Current liabilities Dim ZNF() As Double 'Estimated needed funds Dim ZNL() As Double 'Value of new debt issued Dim EXINT() As Double 'Interest expense Dim DBTUC() As Double 'Debt underwriting commission Dim EAIBT() As Double 'Earnings after interest and before tax Dim TAX() As Double 'Federal income taxes Dim EAIAT() As Double 'Earnings after interest and after tax

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Appendix 23B. Program of FINPLAN With An Example Dim EAFCD() As Double 'Earnings available for common dividends Dim COMDV() As Double 'Common stock dividends Dim ZNS() As Double 'Value of new common stock issued Dim TLANW() As Double 'Total liabilities and net worth Dim COMPK() As Double 'Computed debt to equity Dim ANF() As Double 'Actual needed funds Dim P() As Double 'Per share market price of common stock Dim ZNEW() As Double 'Value of new common stock shares issued Dim EPS() As Double 'Common stock earnings per share Dim DPS() As Double 'Common stock dividends per share

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Appendix 23B. Program of FINPLAN With An Example On Error GoTo ErrorHandler Columns("a").ColumnWidth = 29 'Set default column A width Range("a2").Select 'Get the year being simulated from cell A2 NDATE = ActiveCell.Value Range("b5").Select 'Get the variable code number from cell B5 NUMVR = ActiveCell.Value bNYEARFound = False While NUMVR <> Empty And Not bNYEARFound If NUMVR = 1 Then 'If the number of years to be simulated is found N = ActiveCell.Previous.Value + 1 bNYEARFound = True End If ActiveCell.Offset(1, 0).Activate NUMVR = ActiveCell.Value Wend

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Appendix 23B. Program of FINPLAN With An Example If Not bNYEARFound Then N = 5 'If the number of years to be simulated is not found 'then set the default of N as 5 ReDim NYEAR(N) ReDim SALES(N) ReDim GSALS(N) ReDim ORATE(N) ReDim T(N) ReDim CARAT(N) ReDim FARAT(N) ReDim CLRAT(N) ReDim ZL(N) ReDim ZI(N) ReDim ZIE(N) ReDim ZLR(N) ReDim PFDSK(N) ReDim PFDIV(N) ReDim S(N) ReDim ZNUMC(N) ReDim R(N) ReDim B(N) ReDim ZK(N) ReDim PERAT(N) ReDim UL(N) ReDim US(N)

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Appendix 23B. Program of FINPLAN With An Example NYEAR(1) = NDATE For i = 2 To N NYEAR(i) = NYEAR(i - 1) + 1 Next Range("b5").Select NUMVR = ActiveCell.Value While NUMVR <> Empty Select Case NUMVR Case 2 SALES(1) = ActiveCell.Previous.Value Case 3 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 GSALS(i) = ActiveCell.Previous.Value Next

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Appendix 23B. Program of FINPLAN With An Example Case 4 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 ORATE(i) = ActiveCell.Previous.Value Next Case 5 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 T(i) = ActiveCell.Previous.Value Next Case 6 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 CARAT(i) = ActiveCell.Previous.Value Next Case 7 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 FARAT(i) = ActiveCell.Previous.Value Next

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Appendix 23B. Program of FINPLAN With An Example Case 8 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 CLRAT(i) = ActiveCell.Previous.Value Next Case 9 ZL(1) = ActiveCell.Previous.Value Case 10 ZI(1) = ActiveCell.Previous.Value Case 11 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 ZIE(i) = ActiveCell.Previous.Value Next Case 12 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 ZLR(i) = ActiveCell.Previous.Value Next

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Appendix 23B. Program of FINPLAN With An Example Case 13 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 PFDSK(i) = ActiveCell.Previous.Value Next Case 14 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 PFDIV(i) = ActiveCell.Previous.Value Next Case 15 S(1) = ActiveCell.Previous.Value Case 16 ZNUMC(1) = ActiveCell.Previous.Value Case 17 R(1) = ActiveCell.Previous.Value Case 18 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 B(i) = ActiveCell.Previous.Value Next

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Appendix 23B. Program of FINPLAN With An Example Case 19 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 ZK(i) = ActiveCell.Previous.Value Next Case 20 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 PERAT(i) = ActiveCell.Previous.Value Next Case 21 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 UL(i) = ActiveCell.Previous.Value Next Case 22 For i = ActiveCell.Next.Value + 1 To ActiveCell.Next.Next.Value + 1 US(i) = ActiveCell.Previous.Value Next End Select

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Offset(1, 0).Activate NUMVR = ActiveCell.Value Wend ReDim O(N) ReDim CA(N) ReDim FA(N) ReDim A(N) ReDim CL(N) ReDim ZNF(N) ReDim ZNL(N) ReDim EXINT(N) ReDim DBTUC(N) ReDim EAIBT(N) ReDim TAX(N) ReDim EAIAT(N) ReDim EAFCD(N) ReDim COMDV(N) ReDim ZNS(N) ReDim TLANW(N) ReDim COMPK(N) ReDim ANF(N) ReDim P(N) ReDim ZNEW(N) ReDim EPS(N) ReDim DPS(N)

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Appendix 23B. Program of FINPLAN With An Example For i = 2 To N 'Solve simultaneous equations for N periods SALES(i) = SALES(i - 1) * (1 + GSALS(i)) O(i) = ORATE(i) * SALES(i) CA(i) = CARAT(i) * SALES(i) FA(i) = FARAT(i) * SALES(i) A(i) = CA(i) + FA(i) CL(i) = CLRAT(i) * SALES(i) ZNF(i) = (A(i) - CL(i) - PFDSK(i)) - (ZL(i - 1) - ZLR(i)) - S(i - 1) - R(i - 1) _ - B(i) * ((1 - T(i)) * (O(i) - ZI(i - 1) * (ZL(i - 1) - ZLR(i))) - PFDIV(i)) ZNL(i) = (ZK(i) / (1 + ZK(i))) * (A(i) - CL(i) - PFDSK(i)) - (ZL(i - 1) - ZLR(i)) ZL(i) = (ZL(i - 1) - ZLR(i)) + ZNL(i) ZI(i) = ZI(i - 1) * ((ZL(i - 1) - ZLR(i)) / ZL(i)) + ZIE(i) * (ZNL(i) / ZL(i)) If ZNL(i) <= 0 Then ZI(i) = ZI(i - 1) EXINT(i) = ZI(i) * ZL(i) DBTUC(i) = Abs(UL(i) * ZNL(i)) EAIBT(i) = O(i) - EXINT(i) - DBTUC(i) TAX(i) = T(i) * EAIBT(i)

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Appendix 23B. Program of FINPLAN With An Example EAIAT(i) = EAIBT(i) - TAX(i) EAFCD(i) = EAIAT(i) - PFDIV(i) COMDV(i) = (1 - B(i)) * EAFCD(i) R(i) = R(i - 1) + B(i) * ((1 - T(i)) * (O(i) - ZI(i) * ZL(i) - UL(i) * _ ZNL(i)) - PFDIV(i)) S(i) = ZL(i) / ZK(i) - R(i) ZNS(i) = S(i) - S(i - 1) TLANW(i) = CL(i) + PFDSK(i) + ZL(i) + S(i) + R(i) COMPK(i) = ZL(i) / (S(i) + R(i)) ANF(i) = ZNF(i) + B(i) * (1 - T(i)) * (ZI(i) * ZL(i) + UL(i) * _ ZNL(i) - ZI(i - 1) * (ZL(i - 1) - ZLR(i))) P(i) = (PERAT(i) * EAFCD(i) - ZNS(i) / (1 - US(i))) / ZNUMC(i - 1) ZNEW(i) = ZNS(i) / ((1 - US(i)) * P(i)) ZNUMC(i) = ZNUMC(i - 1) + ZNEW(i) EPS(i) = EAFCD(i) / ZNUMC(i) DPS(i) = COMDV(i) / ZNUMC(i) Next

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Appendix 23B. Program of FINPLAN With An Example Range(ActiveCell.Offset(0, -1), ActiveCell.Offset(70, N)).Clear 'Clear the report area ActiveCell.Offset(6, 0).Activate 'Select the Income Statemet Starting Cell With ActiveCell.Font.Bold = True.Size = 11 End With ActiveCell.Value = "Pro forma Income Statement" 'Generate Income Statement ActiveCell.Offset(2, -1).Activate For i = 1 To N ActiveCell.Offset(0, i).Value = NYEAR(i) Next

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Offset(2, 0).Activate Range(ActiveCell, ActiveCell.Offset(15, N)).NumberFormat = "###0.00" ActiveCell.Value = "Sales" For i = 1 To N ActiveCell.Offset(0, i).Value = SALES(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Operating income" For i = 1 To N ActiveCell.Offset(0, i).Value = O(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Interest expense" For i = 1 To N ActiveCell.Offset(0, i).Value = EXINT(i) Next

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Underwriting commission -- debt" For i = 1 To N ActiveCell.Offset(0, i).Value = DBTUC(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Income before taxes" For i = 1 To N ActiveCell.Offset(0, i).Value = EAIBT(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Taxes" For i = 1 To N ActiveCell.Offset(0, i).Value = TAX(i) Next

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Net income" For i = 1 To N ActiveCell.Offset(0, i).Value = EAIAT(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Preferred dividends" For i = 1 To N ActiveCell.Offset(0, i).Value = PFDIV(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Available for common dividends" For i = 1 To N ActiveCell.Offset(0, i).Value = EAFCD(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Common dividends" For i = 1 To N ActiveCell.Offset(0, i).Value = COMDV(i) Next

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Debt repayments" For i = 1 To N ActiveCell.Offset(0, i).Value = ZLR(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Actl funds needed for investment" For i = 1 To N ActiveCell.Offset(0, i).Value = ANF(i) Next ActiveCell.Offset(5, 1).Activate 'Generate Balance Sheet With ActiveCell.Font.Bold = True.Size = 11 End With

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Value = "Pro forma Balance Sheet" ActiveCell.Offset(2, -1).Activate For i = 1 To N ActiveCell.Offset(0, i).Value = NYEAR(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Font.Bold = True ActiveCell.Value = "Assets" ActiveCell.Offset(1, 0).Activate Range(ActiveCell, ActiveCell.Offset(9, N)).NumberFormat = "###0.00" Range(ActiveCell.Offset(10, 0), ActiveCell.Offset(15, N)).NumberFormat = "###0.0000" ActiveCell.Value = "Current assets" For i = 1 To N ActiveCell.Offset(0, i).Value = CA(i) Next

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Fixed assets" For i = 1 To N ActiveCell.Offset(0, i).Value = FA(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Total assets" For i = 1 To N ActiveCell.Offset(0, i).Value = A(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Font.Bold = True ActiveCell.Value = "Liabilities and net worth" ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Current liabilities" For i = 1 To N ActiveCell.Offset(0, i).Value = CL(i) Next

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Long term debt" For i = 1 To N ActiveCell.Offset(0, i).Value = ZL(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Preferred stock" For i = 1 To N ActiveCell.Offset(0, i).Value = PFDSK(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Common stock" For i = 1 To N ActiveCell.Offset(0, i).Value = S(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Retained earnings" For i = 1 To N ActiveCell.Offset(0, i).Value = R(i) Next

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Total liabilities and net worth" For i = 1 To N ActiveCell.Offset(0, i).Value = TLANW(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Computed DBT/EQ" For i = 1 To N ActiveCell.Offset(0, i).Value = COMPK(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Int. rate on total debt" For i = 1 To N ActiveCell.Offset(0, i).Value = ZI(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Per share data" ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Earnings" For i = 1 To N ActiveCell.Offset(0, i).Value = EPS(i) Next

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Appendix 23B. Program of FINPLAN With An Example ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Dividends" For i = 1 To N ActiveCell.Offset(0, i).Value = DPS(i) Next ActiveCell.Offset(1, 0).Activate ActiveCell.Value = "Price" For i = 1 To N ActiveCell.Offset(0, i).Value = P(i) Next Exit Sub ' Exit to avoid ErrorHandler. ErrorHandler: ' Error-handling routine. Select Case Err.Number ' Evaluate error number. Case 9 MsgBox "'The number of years to be simulated' does not match your " & _ "'Last Period' input.", vbExclamation Case 11 MsgBox Str$(Err.Number) & ", " & Err.Description & Chr$(10) & _ "'The number of years to be simulated' does not match your " & _ "'Last Period' input.", vbExclamation Case Else MsgBox Str$(Err.Number) & ", " & Err.Description End Select End Sub

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