Advanced Project Finance Modelling

Re-examine the main principles underpinning our financial modelling methodology

Share insights into effective modelling of refinancing analysis for rapid and robust analysis:

• Discuss the mechanics of a refinancing – amount, timing, fees and repayment
• Learn different ways to treat the refinance fee
• Discuss the concept of sequential refinancing

Learn powerful techniques for alternative repayment methods for debt sculpting:

• Understand how to effectively model debt sculpting
• Build in switches to allow different structures to be rapidly analysed
• Develop a Debt Service Reserve Account (‘DSRA’) from first principles
• Integrate the DSRA into the financial statements and reinforce the purpose of the cashflow waterfall

Build working capital forecast and integrate it into a developed model

• Model debtor and creditor accounts
• Discuss common errors and pitfalls

Learn a structured approach to comprehensive depreciation calculations:

• Remove the need for cumbersome tables
• Incorporate switches for multiple depreciation methods
• Easily replicate calculations for accounting and tax depreciation
• Build out a maintenance capex programme that can be easily incorporated into depreciation calculations
• Produce easily replicable tax calculations for geared and ungeared taxation and incorporate the tax losses into the taxable income

Understand how financial statements are constructed and how to identify common problems:

• Master the structure of completed three way financial statements
• Learn how to continuously test and debug the integrated statements
• Incorporate all of the debt components into integrated statements
• Develop checks to automate error checking within the model and discuss the importance of these when developing complex financial models

Understand critical concepts and techniques in debt sizing to support debt structuring discussions:

• Single factor optimisation via maximum gearing or minimum DSCR to vary debt size to achieve target cover ratios
• Discuss dual factor optimisation to achieve target cover ratios and returns

Use advanced Excel techniques for rapid and accurate multi-dimensional sensitivities:

• Develop simple macros to avoid common circularities inherent in project finance calculations
• Become familiar with the VBA environment and understand some core functionality
• Discuss common errors when starting to develop macros and how to make macros more efficient
• Use VBA to control data tables so they do not adversely affect calculation speed