Financial Modelling #3: My Financial Modelling Training Case Study

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Here is one of the case studies I use for my Financial Modelling Training class. I will, in future posts in this series, share the answers to the case study questions with detailed breakdown of the steps to the solutions.

If you are in a hurry and would like to get the solution file (Excel) without steps breakdown, email me at for the Excel file of the solution.

Financial Modelling Class: Naija Limited Case Study

Tunde, Ahmed, Ebiri and Emeka have been friends for 30 years since their university days and are now at the peak of their chosen careers. They decided to come together and start a company called Naija Limited that will source for high quality Nigerian made goods, repackage them and sell to supermarkets.
1.       On January 1, 2016 they pulled funds together and started the business with a cash amount of N500 million and incorporated the company as a 1 billion authorized shares company at 50 kobo per share.
2.       On January 16, 2016 they bought with cash a building at Ikeja, Lagos for N250 million naira to use as office, repackaging factory and warehouse.
3.       On January 24, 2016 they bought with cash some packaging equipment and setup factory plant for N100 million.
4.       On January 26, 2016 they bought with cash an inventory of N80 million.
5.       On February 1, 2016 they hired 10 people to make up the company staff and pay them a total monthly cash salary of N8 million on the last day of each month (note: first payment will happen on 29th February 2016)
6.       On February 12, 2016 they recorded their first sale of N15 million from an inventory of N8 million and were paid instantly by bank deposit (cash)
7.       On February 25, 2016 they recorded another sale of N30 million from an inventory of N14 million but were not paid immediately by the customer.
8.       Every month, the company incurs general office expense (cleaning, office supplies, etc.) of N2 million but the expense is paid for in advance on the first day of the month starting from month of March.
9.       Starting from March the company began incurring monthly telephone bills, internet bill, electricity bill and water bill (grouped as utility bills) all totaling N1 million and are postpaid every 10th of the month.
10.   On March 5, 2016 the payment for the N30 million sales came in as cash payment.
11.   On March 15, 2016 the company took a loan of N300 million from Zenith Bank to be paid back over six (6) years with a bi-yearly payment of N30 million split into N3 million to cover interest and N27 million to repay principal on February 15th and August 15th of every year.
12.   On April 12, 2016 the company struck a deal with Shoprite to supply products of N100 million on the 15th of every month starting from April for sales across Shoprite nationwide supermarkets. It is on a NET 30 term so payment comes exactly one month after sales is invoiced/recorded. Inventory costs for the products are N35 million.
13.   To support sales, the company partnered with a key supplier of its inventories to supply it inventory worth of N35 million every first day of the month on a NET 45 term (payment to be made of the 15th of the next month) starting from May 2016.
14.   On December 31 2016, the company declared dividends of N60 million for its owners.
15.   The company’s income tax is N20 million and will be paid the next year (2017).
16.   The capital assets of the company will be depreciated by N20 million in the first year (2016).

1.       Build a Journal for Naija Limited detailing the year’s transactions
2.       Build a T-Accounts for Naija Limited from the Journal
3.       Build a General Ledger for Naija Limited
4.       Build a Trial Balance for Naija Limited using the General Ledger
5.       Adjust the trial balance on an accrual basis

6.       Build the Income Statement, Balance Sheet and Cash Flow Statement from the Trial Balance


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