anyone know how to model em well in Excel. its a NIBCL, so i included it as working capital, and then my working capital model has the company’s negative working capital growing, in line with the past 2 years. thing is, i have the WC model, the revenue model, but i was not too sure on how to model those def revs on the liability side of the balance sheet going forward 5 years what i did was looked at past growth rates of DR and % of revs as well, as extrapolated from there, but still i was not too sure…I feel that I have enough experience modeling out the I/S, but right now, Im trying to finesse my BS and SOCF models. thx
I used to put deferred revenue into receivables (debit short-term assets) and credit deferred revenue. so your balances sheet will be balanced as a result of both increased assets and increased retained earnings. There’s no cash flow there so no need to consider when you doing your OCF model if using direct method. if you use indirect method, then minus the deferred revenue from net income since it’s non-cash revenue.
cfa1jz Wrote: ------------------------------------------------------- HMM, never thought it about that way… > There’s no cash flow there so no need to consider > when you doing your OCF model if using direct > method. if you use indirect method, then minus > the deferred revenue from net income since it’s > non-cash revenue. i think that is wrong. the def rev is a liability, and the change in this liability is an add back to cash flow – is this what you meant. I am sure it is.
Sure. I mean there’s no cash flow when you record deferred revenue current year. However cash flow is occurred when there’s a change in deferred revenue over 2 years or more. daj224 Wrote: ------------------------------------------------------- > cfa1jz Wrote: > i think that is wrong. the def rev is a liability, > and the change in this liability is an add back to > cash flow – is this what you meant. I am sure it > is.
cfa1jz Wrote: ------------------------------------------------------- > Sure. I mean there’s no cash flow when you record > deferred revenue current year. However cash flow > is occurred when there’s a change in deferred > revenue over 2 years or more. > > > good, glad i got it right. thanks, bro