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Building a CAPEX schedule and Depreciation waterfall in a financial model

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Projecting the CAPEX and D&A schedule is a key component in a financial model. For a detailed model, it is a good practice to build the full schedules rather than just projecting them as a % of sales or taking historical numbers. In the attached excel file, I have built two CAPEX schedules:  a) Apple - For basic understanding of the concept b) Hindustan Unilever - More detailed with breakdowns of PPE Excel Model Link There are a couple of key formulas as well that should be kept in mind- 1) Closing PPE (Net block) = Opening PPE + New CAPEX - D&A Closing PPE and Opening PPE : Balance sheet items CAPEX : CFI section  D&A : CFO section 2) Net Block = Gross Block - Accumulated D&A Only Net Block (ie closing PPE) is shown on the balance sheet For Gross block and accumulated depreciation, you need to go to the notes section Treatment of Land in PPE  Lets suppose a company does a fresh round of CAPEX. It will have to buy some land and then build a factory on that...
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LBO modeling

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LBO Introduction In this post, I'll try to explain the mechanics of LBO modeling and provide you with the excel model and presentation that I had created for one of the competitions during my B-School. (Files are at the end of the post).  The main idea is that private equity companies are looking to invest in certain companies via a mix of equity and debt (debt is generally about 70%-80%) to make high returns. Most PE firms specialize in a few industries and try to make investments within the same. But at the end of the day, the main goal of a PE firm is to stay invested for 3-5 years, make some good returns (IRR) and move out. I would strongly recommend reading this article if you are completely new to LBOs. Case Overview: Now I'll briefly explain the problem statement that was given- A Private Equity firm (HNZ Capital) is looking to invest in one of the three companies via the LBO route. The three companies are: Flowserve Treehouse ASGN Question Set- Which company should HNZ...
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Asian Paints DCF Analysis

Paints Industry Overview Indian Paints industry has grown by leaps and bounds over the last decade, largely supported by government's focus on housing and infrastructure development. The industry is mainly organized (~75%) and is expected to grow with double digit CAGR in the years to come.  However, paints industry is heavily correlated with the economy's growth and is expected to witness a slowdown in case India's GDP growth rate fizzles out. Broadly speaking, there are two segments within the paints industry - Decorative segments - Paints used to paint our home's interior/exterior walls Industrial segment - Coatings using for cars, heavy machinery etc. Unlike international markets, Indian market is dominated by decorative paint segment, contributing about 75% to the total market size . Major capex news in the industry: Aditya Birla's Grasim to invest Rs.100 bn to enter into the paints segment Asian Paints announced  Rs. 87 bn  capex for greenfield, brownfield ...
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