Excel Spreadsheets

In this model spreadsheet, forward term structure of interest rates is modeled. Then, using the model predicted forward yield curves, balance sheet of a hypothetical bank is simulated by employing the duration measure. This balance sheet simulation shows the possible variations in the shareholders’ wealth (assets minus liabilities, sometimes called “economic value”) caused by the mismatch (gap) on the balance sheet.

A balance sheet shows the financial position of your company at a single moment in time; in this case, it will be as of opening day. You can use your startup expenses to get the basic data for the balance sheet. Here are some accounting rules which will help you construct an accurate balance sheet: Assets are recorded at the lower of cost or current market value. Since your assets will be newly acquired, put them down at cost. If you have donated personal possessions to the business, enter them at market value.

Projecting your balance sheet can be quite a complex accounting problem, but that does not mean you need to be a professional accountant to do it or to benefit from the exercise. The desired result is not a perfect forecast, but rather a thoughtful plan detailing what additional resources will be needed by the company, where they will be needed, and how they will be financed. Using your last historical balance sheet as a starting point, project what your balance sheet will look like at the end of the 12 month period covered in your Profit & Loss and Cash Flow forecasts. How will the year’s operations affect assets, debts and owners’ equity? For example, if you are planning significant sales growth in the coming year, go through the balance sheet item by item and think about the probably effects of assets.