Financial Statement Modeling - Apple

Overview In this advanced exercise, you will build a fully integrated three-statement financial model for Apple by forecasting the Income Statement, Balance Sheet, and Cash Flow Statement for 2019–2021 using historical data from 2016–2018. You will translate growth rates, margins, and schedule-based assumptions into linked projections, ensuring consistency across all statements. This exercise mirrors real-world multi-statement modeling used in equity research, investment banking, and corporate finance, with a focus on non-cash adjustments and balance sheet linkages. While professional analysts often prepare 5-year forecasts, this exercise uses JPMorgan estimates through 2021, producing a 3-year projection—a common approach for simplified exercises and public company analysis. Learning Goals Build an integrated 3-statement financial model using historical data and forward-looking assumptions. Forecast key revenue drivers, margins, and operating costs to derive profitability metrics. Create and link supporting schedules for D&A, interest income & expense, PP&E, debt, and retained earnings. Model working capital changes and translate them into operating cash flows. Reconcile cash balances so that ending cash from the Cash Flow Statement matches the Balance Sheet. Key Concepts Revenue & Gross Margin: Using growth rates and margins to project top-line performance. Cost of Revenue (COGS) and Operating Expenses: Forecasting R&D and SG&A as a percentage of sales. Gross Profit, EBITDA, EBIT, EBT, and Net Income: Understanding how operating and non-operating items flow through the Income Statement. Working Capital Dynamics: Using DSO, DIO, and DPO to project receivables, inventory, and payables. Non-Cash Adjustments: Incorporating depreciation, amortization, and stock-based compensation into cash flow modeling. Investing Activities: Modeling capital expenditures and long-term asset changes. Financing Activities: Capturing debt movements, dividends, and share repurchases. Retained Earnings and Stockholders’ Equity: Linking net income, dividends, and buybacks to equity balances. Balance Sheet Identity: Ensuring assets equal liabilities plus equity after all projections.

Practice Financial Statement Modeling - Apple with interactive Excel modeling exercises in our Financial Statement Modeling module.

This hands-on modeling exercise helps you master Financial Statement Modeling - Apple through real-world Excel practice and financial modeling techniques.