Modelling accounts payable - assignment

The case tells us that:

"Payment terms agreed with the O&M contractor specify that the O&M fee will be paid monthly within 30 days of month-end."

Therefore, we will have one month of O&M costs unpaid at the end of each quarter. We can reuse the Accounts Receivable logic and replace the ingredients.

Guidance on Accounts Payable assignment.

  • I'm always keen to reuse components wherever possible. I'd therefore approach this by copying the Accounts Receivable logic.
  • Since many of the links are row anchored, you'll have to systematically go through the copied blocks to ensure that each link is pointing to the correct place for the new Accounts Payable logic. Errors can easily creep in here. Read each label and make sure it's right.
  • When we've completed this section, the "Cash paid for O&M costs" and the "Accounts payable balance" line items should go to the cash flow and balance sheet, respectively. Our balance sheet should then balance.

Download the start file for this assignment:

To obtain the worked example file to accompany this chapter buy the financial modelling handbook.


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