An Index Linked Bond is one in which bond cash flows are calculated with reference to future inflation rates. As at 2008, government issued index linked bonds exceeded $1.5 trillion.
This modelling guide explains how to model index linked bonds.
Dividend Policy resolves two questions:
Question 1: Does dividend policy affect firm value?
Question 2: If so, What is the optimal level of distribution ratio i.e., % Net Income to be distributed as dividend (Payout ratio). These issues are discussed under Irrelevance Theories (Modigliani and Miller’s Model) and
Relevance Theories (Walter’s Model , Gordon’s Model)
"A Term Sheet is a bullet-point document which outlines the material terms and conditions for investment. It is a non-binding document except in certain cases. While dealing with investors such as angel funds as an investee you might come across Term Sheet which would be provided to you if they intend to invest in your startup or business. A Term Sheet guides legal counsels in preparation for much detailed definitive Agreements for investment such as Shareholder’s Agreement or Share Subscription Agreement.
As an investee, you should be aware of documents like Term Sheets, Shareholders Agreement, Share Subscription Agreement etc. This presentation shall give you a brief idea of what Term Sheet is and what does it include?
Dividend Policy resolves two questions:
Question 1: Does dividend policy affect firm value?
Question 2: If so, What is the optimal level of distribution ratio i.e., % Net Income to be distributed as dividend (Payout ratio). These issues are discussed under Irrelevance Theories (Modigliani and Miller’s Model) and
Relevance Theories (Walter’s Model , Gordon’s Model)
"A Term Sheet is a bullet-point document which outlines the material terms and conditions for investment. It is a non-binding document except in certain cases. While dealing with investors such as angel funds as an investee you might come across Term Sheet which would be provided to you if they intend to invest in your startup or business. A Term Sheet guides legal counsels in preparation for much detailed definitive Agreements for investment such as Shareholder’s Agreement or Share Subscription Agreement.
As an investee, you should be aware of documents like Term Sheets, Shareholders Agreement, Share Subscription Agreement etc. This presentation shall give you a brief idea of what Term Sheet is and what does it include?
In financial modelling, consistent, uniform design increases efficiency and reduces error.
This modelling guide sets out some recommendations for a “default” model design. This will often have to be adapted, but it’s a good place to start.
In this presentation, we review methods and best practices for the portfolio construction and evaluation process. The presentation covers risk and return estimation, mean-variance optimization as well as techniques for analyzing exposure to loss and wealth potential.
Watch full video on Youtube - https://youtu.be/Qmw15cG2Mv4
This video enhances your knowledge on portfolio management. It explains the meaning, types, process and objective of managing portfolio which comprises of stocks, mutual funds, commodities, metal, real estate etc. diversified sort of investments.(portfolio management)
Thank You
Derivative is a product whose value is derived from the value of one or more basic underlying variables. Refer to the presentation for more information on derivatives.
Financial statements are written records that convey the business activities and the financial performance of a company.
Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes.
Modelling can be tough – by following this guide you can shift your stress and make your colleagues lives hell!
The consequences for falling for some, or all of the following temptations are described in more than eighty spreadsheet problems at www.eusprig.org/stories.htm
Banks quote interest rates on a simple annual basis. These are known as quoted (or nominal) rates.
They often need to be manipulated in order to undertake modelling calculations.
Since different money markets quote using different conventions, it is important that the modeller understands how the quoted rate should be manipulated.
In financial modelling, consistent, uniform design increases efficiency and reduces error.
This modelling guide sets out some recommendations for a “default” model design. This will often have to be adapted, but it’s a good place to start.
In this presentation, we review methods and best practices for the portfolio construction and evaluation process. The presentation covers risk and return estimation, mean-variance optimization as well as techniques for analyzing exposure to loss and wealth potential.
Watch full video on Youtube - https://youtu.be/Qmw15cG2Mv4
This video enhances your knowledge on portfolio management. It explains the meaning, types, process and objective of managing portfolio which comprises of stocks, mutual funds, commodities, metal, real estate etc. diversified sort of investments.(portfolio management)
Thank You
Derivative is a product whose value is derived from the value of one or more basic underlying variables. Refer to the presentation for more information on derivatives.
Financial statements are written records that convey the business activities and the financial performance of a company.
Financial statements are often audited by government agencies, accountants, firms, etc. to ensure accuracy and for tax, financing, or investing purposes.
Modelling can be tough – by following this guide you can shift your stress and make your colleagues lives hell!
The consequences for falling for some, or all of the following temptations are described in more than eighty spreadsheet problems at www.eusprig.org/stories.htm
Banks quote interest rates on a simple annual basis. These are known as quoted (or nominal) rates.
They often need to be manipulated in order to undertake modelling calculations.
Since different money markets quote using different conventions, it is important that the modeller understands how the quoted rate should be manipulated.
The reality of financial modelling is that the model build is not linear. We do not always get all the data at once and we do not always have all the necessary information. It’s important to have a coherent plan for these situations.
This modelling guide shows you how to present “placeholders” in a clear and efficient way. It also explains a technique of creating “placeholders” that will help you indicate clearly that something in your model is temporary code.
Sometimes we need to multiply a vertical range of numbers, by a horizontal range of numbers. This requirement occurs frequently in project finance in calculating reserve account balances. This modelling guide shows you how to use the MMULT function effectively for this requirement.
A project’s internal rate of return (IRR) includes all relevant cash flows regardless of when they occur.
Construction period cash flows may be modelled on one timeline (e.g. monthly) and operations period cash flows might be on a different timeline (e.g. quarterly).
So to calculate an appropriate internal rate of return, we use an approach based on two timelines – each with a corresponding set of cash flows.
We’ve taken three operations that we perform most often when constructing calculations and automated them using macros.
These additions will make a significant contribution to your construction skill efficiency, by removing the need to repeat lengthy keystroke combinations.
There are numerous different ways of repaying the principal on a term loan: annuity style; level principal; bullet; balloon and sculpted repayment profiles.
A financial model should be able to switch easily from one scenario to another. A good Excel function to use is INDEX.
IF, CHOOSE and OFFSET are also frequently used by modellers – but they lack the structure, transparency and flexibility of INDEX.
There are two basic types of line item in financial models – flows and balances.
Balances are amounts at a point in time. Balances can be financial or non financial.
Every balance has similar properties. This guide explains what those properties are, and gives a standard model component that can be used for all balances.
This modelling guide focuses on advance payments and retentions in construction contracts – this financial modelling approach can also be applied to other contracts where similar mechanisms are applied.
Goal seek is one of the most powerful tools in Excel. It can be useful in a wide range of situations.
This guide will show you how to get the best from goal seek and present some tips to make our lives easier while working with it.
This guide assumes that you know a bit about how goal seek works.
Inventories are short term assets held as part of an organisation’s core business operations.
Inventory management is an important part of working capital management. Where inventory levels are significant, a good model should show the impact on cash of holding such significant levels.
We will look at how to model three types of inventory: raw materials, work in progress and finished goods.
Excel, by default, recalculates all open workbooks whenever there is a change in an input or a formula in any of the open workbooks.
Excel has a number of options that allow you to control when open workbooks are recalculated.
There are two types of calculation mode in Excel: automatic and manual
This modelling guide will explore the different Excel calculation modes and how to use them.
Consistent formatting is important in models. It helps communicate what particular cells are for, and helps to communicate useful information about the structure of the model.
In order to facilitate easy, consistent formatting, we have a set of FAST format macros.
When building models in excel sometimes files become large, slowing down your modelling progress and making simple calculations painstakingly slow.
Size is often a function of the number of calculations and complexity of formulae. There are also causes of excess file size that are not related to model complexity. This modelling guide explains how to reduce file size in excel, by dealing with two such causes – end cells and unused styles.
Corporation tax is a levy on profits earned by companies. A corporation is often required to make periodic payments of tax in respect of its estimated tax liability.
Modelling the frequency of tax instalments in a financial model is important if an organisation’s cash flows are to be modelled appropriately. It is also possible to model the frequency of payments such that they adapt with changes to the model timeline.
This modelling guide explains how to model instalment payments in a flexible, structured and transparent way.
Working with more than one timeline in a model is common. Modellers need to be able to take series data calculated in a high resolution timeline (e.g. quarterly) and aggregate it in a low resolution timeline (e.g. annual).
In this modelling guide, we will explain how to aggregate quarterly series data in an annual model using SUMIF and SUMPRODUCT.
Losses sustained by a company might be available to match against future profits. Lower future profits mean less tax paid.
A “tax loss carry forward” refers to the practice of matching the losses of previous periods with a current period’s profits.
This modelling guide explains how to calculate and account for tax loss carry forwards that have a limited shelf life i.e. they are forecast to expire.
Everybody knows that in financial modelling, inputs, calculations and outputs should be separate.
When you’re in the “build phase” of a model, there can be short term benefits of locating inputs next to the calculations they are driving.
The guide explains those benefits, and shows you how to quickly and easily move the inputs to dedicated input sheets at the end of the build.
Events in the real world have an annoying habit of not occurring on your financial model period end dates. This modelling guide gives you reusable code to calculate partial period factors. This will allow you to easily deal with events that occur in between period end dates.
Accounting depreciation - Initial balances and ongoing capital expenditure (This guide replaces the guide - Advanced depreciation using SUMIF)
Ongoing capital expenditure programmes give rise to modelling challenges when it comes to accounting depreciation. Care must be taken since assets start and stop depreciating at different times.
In this guide, we will also consider how to model accounting depreciation relating to a partially depreciated initial balance.
This modelling guide looks at how to model key aspects of a loan – including a choice of debt repayment profiles (level debt service vs level principal).
The accompanying spreadsheet includes a presentation sheet that shows the main features of the loan.
An annuity debt repayment profile involves “level debt service” – with interest reduces and principal increasing over the term of the debt. This modelling guide explains how calculate an annuity payment profile.
Apples WACCThe calculation of a firm’s cost of capital for each.docxssusera34210
Apple's WACC
The calculation of a firm’s cost of capital for each category of capital that is proportionately weighted is done by the weighted average cost of capital. The following are also included in calculating the WACC: common stock, any other long-term debt, preferred stock, and bonds. The WACC can be increased as the beta and the rate of return on equity continues to increase. For a company to have an increase in WACC, it implies that there is a decrease in valuation and an increase in the risk. The WACC can also be used as a hurdle rate against companies and investors can gauge ROIC performance. To calculate WACC, the following formula can be used:
WACC= E/V * Re + D/V * Rd * (1-Tc)
Weight Calculation
The company’s assets are financed by their equity and debt, so in order to determine this information; we must calculate the weight of equity and the weight of debt. The market value of equity is also known as the market cap as well. For Apple, their market capitalization is $1501993.770 million. “As of Mar. 2020, Apple’s latest two-year average Short-Term Debt & Capital Lease Obligation was $18494 Mil and its latest two-year average Long-Term Debt & Capital Lease Obligation was $92771 Mil. The total Book Value of Debt (D) is $1111265 Mil” (Apple WACC).
Weight of Equity= E/(E+D)= 1501933.770/ (1501933.770 + 111265) = 0.931
Weight of Debt= D/(E+D)= 111265/ (1501933.770 + 111265) = .069
Cost of Equity
“The cost of equity is the return a company requires to decide if an investment meets capital return requirements” (Kenton, 2020).
Cost of equity= .660% + 1.09 * 6%= 7.2%
This is calculated by risk-free rate of return + beta of asset * (expected return of the market –risk free rate of return).
Cost of Debt
Apple’s interest expense as of Sept 2019 was $3576 mil and its total book value $111265 mil.
Cost of debt= 3576/111265= 3.21%
The next step would be to calculate the average tax rate minus 1. So one would take the WACC formula and multiply it by the 1-average tax rate and the formula for this is:
WACC = E/(E/D) * Cost of equity + D/(E+D) * Cost of debt * (1-tax rate)
The latest tax rate for Apple over the last two years averages to 17.14%.
WACC= .931 * 7.2% + 3.21% * (1-17.14%)
WACC= 6.89%
For any company, it cost to raise capital. Any firm that is able to generate a higher ROIC% than it costs the company to raise the capital that is necessary for the investment is earning excess returns. With Apple’s WACC being 6.89% and their ROIC 22.56%, it implies that Apple is able to generate higher returns on their investment than it cost the company to raise capital that is needed to invest. As Apple continue to generate positive excess returns on new investments in the future, they will see their value increase as the growth continues to increase.
2 Corinthians 9:10AMP says, “Now He who provides seed for the sower and bread for the food will provide and multiply your seed for sowing [that is, your resources] and increase the harve.
Solutions Manual for Advanced Accounting 11th Edition by BeamsZiaPace
Full download : https://downloadlink.org/p/solutions-manual-for-advanced-accounting-11th-edition-by-beams/ Solutions Manual for Advanced Accounting 11th Edition by Beams
On Thursday February 3ʳᵈ 2022 at 07:00 GMT (08:00 CET and 02:00 EST) Shell plc will release its fourth quarter results and fourth quarter interim dividend announcement for 2021.
In previous guides we have considered the use of VLOOKUP and INDEX / MATCH as a means of matching constants with a corresponding date on a horizontal timeline.
In this modelling guide, we will look at SUMIF.
Financial Models sind oft komplex und schwierig zu lesen. Lange Formeln, die auf weit entfernte Stellen im Modell hinweisen, tragen dazu bei.
Berechnungsblöcke helfen dabei, Modelle einfacher zu lesen und zu navigieren.
It is tempting to dive straight into the spreadsheet when faced with a strict deadline.
However, taking the time to plan and create the model structure visually can be effective in ensuring the logic of the model is clear to the model developer and to anyone that uses the model later.
This guide concentrates on producing a conceptual model using tools that are readily available in Microsoft Office.
To simulate is to try to duplicate the features, appearance and characteristics of a real system.
The idea behind simulation is to imitate a real-world situation mathematically, to study its properties and operating characteristics, to draw conclusions and make action decisions based on the results of the simulation.
The real-life system is not touched until the advantages and disadvantages of what may be a major policy decision are first measured on the system's model.
In this guide we will consider how to model a net present value (“NPV”). We will also consider the Excel functions available that are specific to calculating an NPV.
Charts and graphs are used to make information clearer and easier to understand. They play a critical role in helping people to visualise large amounts of information, make better decisions and communicate their results to others.
This modelling guide explains how to make quick charts and how they can be useful in analysing data.
In this guide we analyse the trend of operating revenues, operating costs and operating profits / (losses) over the timeline of a project.
Les modèles financiers sont parfois complexes et difficiles à lire. Un élément important créant cette complexité : l’utilisation de longues formules référant à d’autres cellules du modèles.
Les blocs de calculs aident à faciliter la lecture et la navigation dans un modèle.
Calculation blocks are a key feature of FAST models; they help to make models more readable.
Sometimes however, we have to repeat the same kind of calculation many times. Having lots of the same kind of calculation block is not always the best approach.
Top mailing list providers in the USA.pptxJeremyPeirce1
Discover the top mailing list providers in the USA, offering targeted lists, segmentation, and analytics to optimize your marketing campaigns and drive engagement.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
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Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
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[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
An introduction to the cryptocurrency investment platform Binance Savings.Any kyc Account
Learn how to use Binance Savings to expand your bitcoin holdings. Discover how to maximize your earnings on one of the most reliable cryptocurrency exchange platforms, as well as how to earn interest on your cryptocurrency holdings and the various savings choices available.
Understanding User Needs and Satisfying ThemAggregage
https://www.productmanagementtoday.com/frs/26903918/understanding-user-needs-and-satisfying-them
We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
In this webinar, we won't focus on the research methods for discovering user-needs. We will focus on synthesis of the needs we discover, communication and alignment tools, and how we operationalize addressing those needs.
Industry expert Scott Sehlhorst will:
• Introduce a taxonomy for user goals with real world examples
• Present the Onion Diagram, a tool for contextualizing task-level goals
• Illustrate how customer journey maps capture activity-level and task-level goals
• Demonstrate the best approach to selection and prioritization of user-goals to address
• Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
2. Everything that is beautiful and
noble is the product of reason and
calculation.
Charles Baudelaire
3. ABOUT THE FINANCIAL
MODELLING HANDBOOK
Financial modelling should be collaborative. Collaboration reduces
error, speeds up development time and lowers cost. The Financial
Modelling Handbook is a collaborative, crowd-sourced guide to
building better financial models using the FAST Standard.
www.financialmodellinghandbook.com/contribute
4. financialmodellinghandbook.com
KOMAL
Komal Aggarwal is a Financial Modeller at
F1F9. She works mostly on projects in the oil
& gas, mining and energy sectors.
She likes doing adventurous sports.
Financial Modelling
HANDBOOK
5. An Index Linked Bond is one in which bond cash flows are
calculated with reference to future inflation rates. As at 2008,
government issued index linked bonds exceeded $1.5 trillion.
This modelling guide explains how to model index linked bonds.
financialmodellinghandbook.comFinancial Modelling
DOWNLOAD THIS GUIDE AND THE
ACCOMPANYING EXCEL EXAMPLE
HANDBOOK
INDEX
LINKED BONDS
How to model
6. financialmodellinghandbook.comFinancial Modelling
HANDBOOK
CALCULATING INTEREST
The first part of the interest calculation looks at interest without inflation.
This is done by applying a periodic interest rate to the un-indexed beginning
balance of the bond.
Formula in cell J14 = $F10 / $F11 * J12 * J13
Since the annual interest rate was quoted on a 30 / 360 basis, it has been
converted to a periodic rate by dividing it by quarters in a year.
1
1
7. financialmodellinghandbook.comFinancial Modelling
HANDBOOK
UN-INDEXED BOND BALANCE
The un-indexed repayments are calculated by multiplying the total bond amount by
the repayment profile.
Formula in cell J19 = $F17 * J18
2
3
The un-indexed bond balance is calculated using the bond balance at the start of
forecast period; the calculated un-indexed repayments reduce the balance and are
modelled in a cork screw.
Formula in cell J27 = IF(J23 = 1, J22, J25 - J26)
2
3
9. financialmodellinghandbook.comFinancial Modelling
HANDBOOK
REPAYMENTS AND BALANCE
The indexed principal repayment and indexed bond balance are both calculated by
multiplying the un-indexed amounts by a specific indexation factor.
Formula in cell J47 = J45 * J46
Formula in cell J53 = J51 * J52
The index linked bond repayment is exported to the cash flow statement.
5
5
10. In an inflationary environment, the balance of an index linked bond increases
even if there are neither cash movements nor further borrowings.
Consequently, if there are bond repayments, the bond balance will be reduced by
an amount that is less than the bond repayments.
In a deflationary environment, the opposite will happen.
Changes in the bond balance arising from inflation are charged through the
income statement.
INDEXATION
11. financialmodellinghandbook.comFinancial Modelling
HANDBOOK
INDEXATION (CONT.)
The change in the index linked bond balance is the difference between
current and previous period balances.
Formula in cell R58 = (R56 - Q56) * R57
6
7
The indexation charge is calculated by summing the change in the index linked bond
balance and the indexed repayments made.
The indexation charge is the sum of repayments calculated in step 5 and the change
in the index linked bond balance calculated in step 6.
Formula in cell Q62 = SUM(Q60:Q61)
6
7
12. financialmodellinghandbook.comFinancial Modelling
HANDBOOK
INDEX LINKED BOND BALANCE
The indexation charge calculated in step 7 is added to the bond balance, while the
indexed repayments are deducted from the bond balance.
Formula in cell J72 = IF(J67 = 1, J66, J69 + J70 - J71)
The balance for an index linked bond can be calculated using a standard cork screw.
8
8