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fce58cbe2e
Adds 7 optional skills under optional-skills/finance/ adapted from
anthropics/financial-services (Apache-2.0):
excel-author — openpyxl conventions: blue/black/green cells,
formulas over hardcodes, named ranges, balance
checks, sensitivity tables. Ships recalc.py.
pptx-author — python-pptx for model-backed decks (pitch,
IC memo, earnings note) that bind every number
to a source workbook cell.
dcf-model — institutional DCF (49KB skill): projections,
WACC, terminal value, Bear/Base/Bull scenarios,
5x5 sensitivity tables. Ships validate_dcf.py.
comps-analysis — comparable company analysis: operating metrics,
multiples, statistical benchmarking.
lbo-model — leveraged buyout: S&U, debt schedule, cash
sweep, exit multiple, IRR/MOIC sensitivity.
3-statement-model — fully-integrated IS/BS/CF with balance-check
plugs. Ships references/ for formatting,
formulas, SEC filings.
merger-model — accretion/dilution analysis for M&A.
All seven are optional (not active by default). Users install via
'hermes skills install official/finance/<skill>'.
Hermesification:
- Stripped every Office JS / Office Add-in / mcp__office__*
branch — skills assume headless openpyxl only.
- Replaced Cowork MCP data-source instructions with 'MCP first (via
native-mcp), fall back to web_search/web_extract against SEC EDGAR
and user-provided data'.
- Swapped Claude tool references (Bash, Read, Write, Edit, mcp__*)
for Hermes-native equivalents and Python library calls.
- Canonical Hermes frontmatter (name/description/version/author/
license/metadata.hermes.{tags,related_skills}).
- Descriptions tightened to 187-238 chars, trigger-first.
- Attribution preserved: author field credits 'Anthropic (adapted by
Nous Research)', license: Apache-2.0, each SKILL.md links back to
the upstream source directory.
Verification:
- All 7 discovered by OptionalSkillSource with source_id='official'
- Bundle fetch includes support files (scripts, references, troubleshooting)
- related_skills cross-refs all resolve within the bundle
- No Claude product / Cowork / Office JS / /mnt/skills leakage
remains in body text (bounded mentions only in attribution blocks)
Source: https://github.com/anthropics/financial-services (Apache-2.0)
292 lines
7.7 KiB
Markdown
292 lines
7.7 KiB
Markdown
# Formula Reference
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**IMPORTANT:** Use the formulas outlined in this reference document unless otherwise specified by the user.
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---
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## Core Linkages
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```
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Balance Sheet: Assets = Liabilities + Equity
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Net Income: IS Net Income → CF Operations (starting point)
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Cash Flow: ΔCash = CFO + CFI + CFF
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Cash Tie-Out: Ending Cash (CF) = Cash (BS Asset)
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Cash Monthly/Annual: Closing Cash (Monthly) = Closing Cash (Annual)
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Retained Earnings: Prior RE + Net Income - Dividends = Ending RE
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Equity Raise: ΔCommon Stock/APIC (BS) = Equity Issuance (CFF)
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Year 0 Equity: Equity Raised (Year 0) = Beginning Equity (Year 1)
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```
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## Gross Profit Calculation
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**IMPORTANT:** Gross Profit must be calculated from Net Revenue, not Gross Revenue.
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```
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Net Revenue - Cost of Revenue = Gross Profit
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```
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| Term | Definition |
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|------|------------|
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| Gross Revenue | Total revenue before any deductions |
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| Net Revenue | Gross Revenue - Returns - Allowances - Discounts |
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| Cost of Revenue | Direct costs attributable to production of goods/services sold |
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| Gross Profit | Net Revenue - Cost of Revenue |
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**Note:** Always use Net Revenue (also called "Net Sales" or simply "Revenue" on most financial statements) as the starting point for profitability calculations. Gross Revenue overstates the true top-line performance.
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## Margin Formulas
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```
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Gross Margin % = Gross Profit / Net Revenue
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EBITDA = EBIT + D&A (or = Gross Profit - OpEx)
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EBITDA Margin % = EBITDA / Net Revenue
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EBIT Margin % = EBIT / Net Revenue
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Net Income Margin % = Net Income / Net Revenue
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```
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## Credit Metric Formulas
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```
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Total Debt = Current Portion of Debt + Long-Term Debt
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Net Debt = Total Debt - Cash
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Total Debt / EBITDA = Total Debt / EBITDA (from IS)
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Net Debt / EBITDA = Net Debt / EBITDA (from IS)
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Interest Coverage = EBITDA / Interest Expense (from IS)
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Net Int Exp % Debt = Net Interest Expense / Long-Term Debt
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Debt / Total Cap = Total Debt / (Total Debt + Total Equity)
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Debt / Equity = Total Debt / Total Equity
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Current Ratio = Total Current Assets / Total Current Liabilities
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Quick Ratio = (Total Current Assets - Inventory) / Total Current Liabilities
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```
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## Forecast Formulas (% of Net Revenue Method)
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```
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Cost of Revenue (Forecast) = Net Revenue × Cost of Revenue % Assumption
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S&M (Forecast) = Net Revenue × S&M % Assumption
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G&A (Forecast) = Net Revenue × G&A % Assumption
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R&D (Forecast) = Net Revenue × R&D % Assumption
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SBC (Forecast) = Net Revenue × SBC % Assumption
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```
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## Working Capital Formulas
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```
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Accounts Receivable
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Prior AR
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+ Revenue (from IS)
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- Cash Collections (plug)
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= Ending AR
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DSO = (AR / Revenue) × 365
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Inventory
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Prior Inventory
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+ Purchases (plug)
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- COGS (from IS)
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= Ending Inventory
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DIO = (Inventory / COGS) × 365
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Accounts Payable
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Prior AP
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+ Purchases (from Inventory calc)
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- Cash Payments (plug)
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= Ending AP
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DPO = (AP / COGS) × 365
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Net Working Capital = AR + Inventory - AP
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ΔWC = Current NWC - Prior NWC
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```
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## D&A Schedule Formulas
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```
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Beginning PP&E (Gross)
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+ CapEx
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= Ending PP&E (Gross)
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Beginning Accumulated Depreciation
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+ Depreciation Expense
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= Ending Accumulated Depreciation
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PP&E (Net) = Gross PP&E - Accumulated Depreciation
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```
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## Debt Schedule Formulas
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```
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Beginning Debt Balance
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+ New Borrowings
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- Repayments
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= Ending Debt Balance
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Interest Expense = Avg Debt Balance × Interest Rate
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(Use beginning balance to avoid circularity, or iterate if circular refs enabled)
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```
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## Retained Earnings Formula
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```
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Beginning Retained Earnings
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+ Net Income (from IS)
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+ Stock-Based Compensation (SBC) (from IS)
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- Dividends
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= Ending Retained Earnings
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```
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## NOL (Net Operating Loss) Schedule Formulas
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```
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NOL CARRYFORWARD SCHEDULE
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Beginning NOL Balance (Year 1 / Formation = 0)
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+ NOL Generated (if EBT < 0, then ABS(EBT), else 0)
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- NOL Utilized (limited by taxable income and utilization cap)
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= Ending NOL Balance
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STARTING BALANCE RULE
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For a new business or first modeled period:
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Beginning NOL Balance = 0
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NOL can only increase through realized losses (EBT < 0)
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NOL cannot be created from thin air or assumed
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NOL UTILIZATION CALCULATION
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Pre-Tax Income (EBT)
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If EBT > 0:
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NOL Available = Beginning NOL Balance
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Utilization Limit = EBT × 80% (post-2017 federal limit)
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NOL Utilized = MIN(NOL Available, Utilization Limit)
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Taxable Income = EBT - NOL Utilized
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If EBT ≤ 0:
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NOL Utilized = 0
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Taxable Income = 0
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NOL Generated = ABS(EBT)
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TAX CALCULATION WITH NOL
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Taxes Payable = MAX(0, Taxable Income × Tax Rate)
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(Taxes cannot be negative; losses create NOL asset instead)
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DEFERRED TAX ASSET (DTA) FOR NOL
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DTA - NOL Carryforward = Ending NOL Balance × Tax Rate
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ΔDTA = Current DTA - Prior DTA
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(Increase in DTA = non-cash benefit on CF)
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(Decrease in DTA = non-cash expense on CF)
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```
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## Balance Sheet Structure
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```
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ASSETS
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Cash (from CF ending cash)
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Accounts Receivable (from WC)
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Inventory (from WC)
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Total Current Assets
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PP&E, Net (from DA)
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Deferred Tax Asset - NOL (from NOL schedule)
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Total Non-Current Assets
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Total Assets
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LIABILITIES
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Accounts Payable (from WC)
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Current Portion of Debt (from Debt)
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Total Current Liabilities
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Long-Term Debt (from Debt)
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Total Liabilities
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EQUITY
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Common Stock
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Retained Earnings (from RE schedule)
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Total Equity
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CHECK: Assets - Liabilities - Equity = 0
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```
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## Cash Flow Statement Structure
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```
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CASH FROM OPERATIONS (CFO)
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Net Income (LINK: IS)
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+ D&A (LINK: DA schedule)
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+ Stock-Based Compensation (SBC) (LINK: IS or Assumptions)
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- ΔDTA (Deferred Tax Asset) (LINK: NOL schedule; increase in DTA = use of cash)
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- ΔAR (LINK: WC)
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- ΔInventory (LINK: WC)
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+ ΔAP (LINK: WC)
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= CFO
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CASH FROM INVESTING (CFI)
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- CapEx (LINK: DA schedule)
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= CFI
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CASH FROM FINANCING (CFF)
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+ Debt Issuance (LINK: Debt)
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- Debt Repayment (LINK: Debt)
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+ Equity Issuance (LINK: BS Common Stock/APIC)
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- Dividends (LINK: RE schedule)
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= CFF
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Net Change in Cash = CFO + CFI + CFF
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Beginning Cash
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+ Net Change in Cash
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= Ending Cash (LINK TO: BS Cash)
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```
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## Income Statement Structure
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```
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Net Revenue
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Growth %
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(-) Cost of Revenue
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% of Net Revenue
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────────────────
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Gross Profit (= Net Revenue - Cost of Revenue)
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Gross Margin %
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(-) S&M
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% of Net Revenue
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(-) G&A
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% of Net Revenue
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(-) R&D
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% of Net Revenue
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(-) D&A
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(-) SBC
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% of Net Revenue
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────────────────
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EBIT
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EBIT Margin %
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EBITDA
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EBITDA Margin %
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(-) Interest Expense
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────────────────
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EBT (Pre-Tax Income)
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(-) NOL Utilization (from NOL schedule, reduces taxable income)
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────────────────
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Taxable Income
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(-) Taxes (Taxable Income × Tax Rate)
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────────────────
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Net Income
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Net Income Margin %
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```
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## Check Formulas
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```
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BS Balance Check: = Assets - Liabilities - Equity (must = 0)
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Cash Tie-Out: = BS Cash - CF Ending Cash (must = 0)
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RE Roll-Forward: = Prior RE + NI + SBC - Div - BS RE (must = 0)
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DTA Tie-Out: = NOL Schedule DTA - BS DTA (must = 0)
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Equity Raise Tie-Out: = ΔCommon Stock/APIC (BS) - Equity Issuance (CFF) (must = 0)
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Year 0 Equity Tie-Out: = Equity Raised (Year 0) - Beginning Equity (Year 1) (must = 0)
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Cash Monthly vs Annual: = Closing Cash (Monthly) - Closing Cash (Annual) (must = 0)
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NOL Utilization Cap: = NOL Utilized ≤ EBT × 80% (must be TRUE for post-2017)
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NOL Non-Negative: = Ending NOL Balance ≥ 0 (must be TRUE)
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NOL Starting Balance: = Beginning NOL (Year 1) = 0 (must be TRUE for new business)
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NOL Accumulation: = NOL increases only when EBT < 0 (losses generate NOL)
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```
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