Debt modelling 1: Balance and initial drawdown
By breaking down the debt modelling process into small steps I’m hoping to show that it’s more straightforward than you might expect.
Kenny Whitelaw-Jones
Debt modelling: Concepts & assignment
We have until now assumed that business will be 100% equity funded. It's time to change this.
Share capital redemption
What's the value of $100m in 25 years?
Modelling depreciation - solution
My hypothesis about how depreciation will impact IRR
Modelling depreciation - assignment
Can a non-cash item like depreciation impact IRR?
Modelling IRR - solution
Step by step walk through of setting up the IRR calculation
Modelling IRR - assignment
Every business has a metric or set of metrics that matter the most. For our case study model, it's IRR.
What's going on with retained earnings?
At the end of the last section, I left you with a question. You are only allowed to read on if you have a hypothesis.
Modelling dividends - solution
What is the maximum amount of dividend that the model could pay?
Looking at the income statement, at present, there is $322.7m of Profit after tax being generated over the life of the project.
At present, those profits are not going anywhere. They are being retained in the business.
Modelling dividends - assignment
I said earlier in the book that it's useful to have a balancing balance sheet as early as possible in the model build. It helps us ensure that we are keeping our accounting and the internal consistency of our model on track.
Similarly, it's helpful to