Loan DCF Valuation

1. BPM Financial Modelling
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Primary Developer: Michael Hutchens
Cover Notes:
Demonstrates the valuation of the loan allowing for variable interest rate assumptions.

2. Table of Contents
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Section & Sheet Titles
1. Assumptions
a. Time Series Assumptions
b. Loan Assumptions
2. Outputs
a. Loan Outputs
3. Appendices
3.1. Lookup Tables
a. Time Series Lookup Tables
3.2. Checks
a. Checks
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3. Assumptions
Section 1.
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4. Time Series Assumptions
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Time Series Assumptions
Core Time Series Assumptions
Title Primary
Periodicity þÿ 1
Financial Year End þÿ 31 þÿ 12
Start Date 1-Jan-11
Periods 10
Denomination þÿ 2
Historical & Forecast Period Titles
Include in Period Titles? FALSE
Actual Periods 3
Budget Periods -
Data & Projections - Timing Assumptions
Data Term Basis þÿ 1
Data - Active Periods 3
Projections - Start Date 1-Jan-13
Notes:
- A Financial Year End assumption of 28th of February is assumed to be a month end financial year end, even in a leap year.
- The "Model Denomination" assumption will not necessarily automatically change the denomination of the outputs of this model.
- A "Budget Period" refers to either a period in the current financial year or periods containing combined actual and forecast data.
- "Data & Projections - Timing Assumptions" are used as the basis for related data and projections time series sheets.
- Use the bpmToolbox "Update Time Series Columns" tool to hide inactive data and projections time series periods.
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5. Loan Assumptions
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Year Ending 31 December 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Loan Assumptions
Loan Description: $100 Bond @ 10% p.a.
Loan Outstanding Opening
1-Jan-11
Opening Balance 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Drawdowns - - - - - - - - - -
Repayments - - - - - - - - - (100.0)
Closing Balance 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 -
Interest Expense
Interest Rate (% p.a.) 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Valuation
Discount Rate (% p.a.) 10.00%
Notes
- Interest expense is calculated based on opening loan balance in each period - e.g. drawdowns and replayments are assumed to be made at the end of each period.
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6. Outputs
Section 2.
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7. Loan Outputs
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Year Ending 31 December 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Loan Outputs
Loan Description: $100 Bond @ 10% p.a.
Loan Outstanding
Opening Balance 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Drawdowns - - - - - - - - - -
Repayments - - - - - - - - - (100.0)
Closing Balance 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 -
Interest Expense
Interest Rate (% p.a.) 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Days in Period 365 366 365 365 365 366 365 365 365 366
Days in Financial Year 365 366 365 365 365 366 365 365 365 366
Effective Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest Expense 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0
Valuation
Valuation Dates 1-Jan-11 31-Dec-11 31-Dec-12 31-Dec-13 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 31-Dec-18 31-Dec-19 31-Dec-20
Net Cash Flows
Initial Loan Amount (100.0) - - - - - - - - - -
Drawdowns - - - - - - - - - - -
Repayments - - - - - - - - - - 100.0
Interest Expense - 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0
Net Cash Flows (100.0) 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 110.0
Discount Factors
Discount Rate (% p.a.) 10.00%
Effective Discount Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Discount Factors 1.0000 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855
Discounted Cash Flows & NPV
Discounted Cash Flows (100.0) 9.1 8.3 7.5 6.8 6.2 5.6 5.1 4.7 4.2 42.4
Net Present Value (NPV) -
Internal Rate of Return (IRR)
Implied Rate of Return (IRR) 10.00%
Error Check -
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8. Appendices
Section 3.
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9. Lookup Tables
Sub-Section 3.1.
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10. Time Series Lookup Tables
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Time Series Lookup Tables
Month Days Names
Month Days LU_Mth_Days
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Month Names Names
Month Names LU_Mth_Names
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11. Time Series Lookup Tables
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January
February
March
April
May
June
July
August
September
October
November
December
Denomination Names
Denomination LU_Denom
$Billions Billions
$Millions Millions
$'000 Thousands
$ Currency
Data Term Basis Names
Data Term Basis LU_Data_Term_Basis
Active Data Periods
Projections Start
Periodicity Names
Periodicity LU_Periodicity
Annual Annual
Semi-Annual Semi_Annual
Quarterly Qtrly
Monthly Mthly
Period Type Names Names
Period Type Names LU_Period_Type_Names
Year Yr_Name
Half Year Half_Yr_Name
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12. Time Series Lookup Tables
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Quarter Qtr_Name
Month Mth_Name
Periods In Year Names
Periods In Year LU_Pers_In_Yr
1 Yrs_In_Yr
2 Halves_In_Yr
4 Qtrs_In_Yr
12 Mths_In_Yr
Conversion Factors Names
Conversion Factors
10 Ten
100 Hundred
1,000 Thousand
1,000,000 Million
1,000,000,000 Billion
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13. Checks
Sub-Section 3.2.
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14. Checks
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Error Checks
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Errors Detected - Summary
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Error Checks
Error Checks Check Include? Flag
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Total Errors: Err:508
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15. Checks
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Sensitivity Checks
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Sensitivities Detected - Summary
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Sensitivity Message (Empty if None):
Sensitivity Checks
Sensitivity Checks Check Include? Flag
Total Sensitivities: -
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16. Checks
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Alert Checks
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Alerts Detected - Summary
Total Alerts: -
Alert Message (Empty if None):
Alert Checks
Alert Checks Check Include? Flag
Total Alerts: -
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