Modelling Debt Part I – The Capital Structure

Any financial model that has been developed to support a transaction, whether it be for project finance, a merger or acquisition (M&A), a leveraged (LBO) or a management (MBO) buyout will have an associated capital structure and will have a ‘debt’ section. This section is very different to the ‘operations’ section of the model and […]

Advanced Graphing – Step / Waterfall Charts

Download Excel file This is the second tutorial in a series that discusses how the graphing functions in Excel can be used to enhance your financial model. This tutorial focuses on the ‘Step’ or ‘Waterfall’ charts and how they can be developed and incorporated into a financial model. A waterfall chart effectively displays variances and […]

Modelling Capex and S-Curves

Download Excel file Capital Expenditure (Capex) is a common component of all project finance and many other types of financial model. An asset (power station, refinery, toll road etc) has to be constructed before it can generate any income. In the early stages a projects assessment there may not be a lot of information regarding […]

Implementing ‘Intelligent’ Model Checks

Download Excel file The most common and arguably the most important check in a financial model is the balance sheet check (Net Assets = Shareholder Equity), but you would be surprised at how many models I’ve seen with this missing or with a plug number inserted so that the check is always “OK”. A project finance model […]

Carry Forward Tax Losses (and Expiries)

Download Excel file It is common in a project, particularly in the early phases, for the taxable income of the project vehicle to be negative i.e. the project is in “tax losses”. This may be due to any or all of: Deductions for interest during construction “Ramp up” phase of the project where revenue is […]