Question

M'USD 2018 2019 2020 Revenue                   120                   13

M'USD 2018 2019 2020
Revenue                   120                   133                   160
PPE Gross beginning balance                     56                     74                     94
Accumulated Depreciation beginning balance                   (16)                   (22)                   (29)
Depreciation for the year                       5                       6                       7
Capital expenditures during the year                   (18)                   (20)                   (22)

Based on that information and using the same ratios as in the last year as well as last year's growth rate in revenue for 2021 you forecast:
Assume CAPEX is made at the end of the year.


Select one or more:

a. CAPEX in 2021 is around 26.5M

b. Using depreciation to Capex ratio depreciation expense in 2021 is around 8.4M

c. The Net PPE in 2020 is 146M

d. The BOP Gross PPE is 130M in 2021

e. EOP net PEE in 2021 is around 186.5M

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Answer #1
Financial Forecasting for 2021
M 'USD
Particulars 2018 2019 2020 2021
Revenue 120 133 160 192.48
PPE Gross beginning balance 56 74 94 116
Accumulated Depreciation beginning balance (16) (22) (29) 37
Depreciation for the year 5 6 7 8
Capital expenditures during the (18) (20) (22) (24)
WN 1 : Sales growth rate in 2020 ((160-133)/133*100) = 20.30 %
So, Revenue for 2021 shall be in same growth as (160*120.30%) = M'USD 192.48
WN 2: PPE Gross beginning balance = Last year beginning balance + capital expenditures during the last year
PPE Gross beginning balance in 2021 (94 + 22) = M'USD 116
WN 3: Estimated CAPEX at the end of the year is M'USD 2 as same expenditure maintained with same growth
of company.
WN 4: Depreciation for the year shall be increased by M'USD 1, so it will be M'USD 8 for 2021 as same growth
in capital expenditure noted as last year.

Select one or more:

 Answer
a. CAPEX in 2021 is around 26.5M CAPEX in 2021 is 24 M. So 26.5 M is wrong.
b. Using depreciation to Capex ratio depreciation expense in 2021 is around 8.4M Using depreciation to CAPEX ratio depreciation to be M 7.64 (7/22*24)
So 8.4 M is wrong.
c. The Net PPE in 2020 is 146M Net PPE in 2020 is M 80 (94+22-29-7). So 146M is wrong
d. The BOP Gross PPE is 130M in 2021 Gross PPE is M 140 (116+24). So 130M is wrong
e. EOP net PEE in 2021 is around 186.5M Opening net PPE in 2021 is M 79 (116-37). So 186.5 M is wrong.
As answer given based on the forecast inspired by the assumption as made. No any option matched or selected.
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