Tutorials

In a project finance transaction, we often need to model semi-annual debt service in a quarterly period model. This tutorial demonstrates how to code this concept in a flexible way which minimises a whole range of potential errors.

Category: Project Finance Modelling - Advanced | Date: 27 May 2009

In Excel, you can create data tables to see how different input values affect the result of a formula without having to re-type or copy the formula for each input value. This adds a new dimension to Excel that is very powerful but takes practice to get used to.

Category: Excel - Advanced | Date: 26 February 2009

A good scenario manager allows you to look at a different ‘world’ in the model by changing just one cell. When combined with our 1-D Data Table approach the results of the Scenarios are shown without pressing any buttons!

Category: Project Finance Modelling - Basic | Date: 26 February 2009

This tutorial and the accompanying sample workbook focuses on the Debt Service Coverage Ratio (DSCR) which is widely used in Project Finance models. It is a debt metric used to analyse the project’s ability to repay debt periodically.

Category: Project Finance Modelling - Basic | Date: 25 September 2008

The Loan Life Cover Ratio (LLCR) is one of the most commonly used debt metrics in Project Finance. Unlike period-on-period measures such as the Debt Service Cover Ratio (DSCR) it provides an analyst with a measure of the number of times the cashflow over the scheduled life of the loan can repay the outstanding debt balance.

Category: Project Finance Modelling - Basic | Date: 25 September 2008

In a project finance model, we often need to calculate depreciation of an asset which includes ongoing costs such as maintenance capital expenditure. This tutorial shows how to code the depreciation in one line as opposed to a traditional matrix method – hence reducing complexity and file size.

Date: 27 May 2009

Interest rate risk is where the risk that interest rates move and adversely affect the project economics. There are a range of approaches to interest rate risk management to protect your cost of funds on borrowings. This tutorial explains how to model the mechanics of interest rate hedging in a clear and transparent way which will satisfy most users of project finance analysis most of the time.

Category: Project Finance Modelling - Basic | Date: 23 March 2009

When capital expenditure is lumpy and / or large it is common to need to consider and model a major maintenance reserve account (MMRA/c). This tutorial describes the function of MMRA and how to code and link it to the Financial Statements.

Category: Project Finance Modelling - Advanced | Date: 23 March 2009

The Project Life Cover Ratio (“PLCR”) is commonly used debt metric in project finance. Together with the Debt Service Cover Ratio (“DSCR”) and Loan Life Cover Ratio (“LLCR”), these debt metrics in one form or another usually appear in project finance term sheets and loan documentation so need to be modelled clearly and accurately.

Category: Project Finance Modelling - Basic | Date: 09 March 2009

We have earlier published a Tutorial titled “Project Finance Modelling Top 10 Mistakes”, describing a wide variety of problems in Project Finance Models which can be attributed to a lack of model simplicity. This article together with the examples in the accompanied workbook suggests ways to simplify a Project Finance Model.

Date: 29 January 2009