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Circular reference on debt service reserve account - no thanks!

Precision is the enemy of flexibility. Have you ever found yourself building your financial model when your coding of a flexible target for the debt service reserve account (”DSRA”) causes a circular reference?

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Sorry, but your financial model looks like Berlin (before 1989)

Following an initial review of a client’s financial model our team often has a conversation on the topic “what do you think of the model?” A discussion on this topic is likely to evolve around structure, formatting, scenarios, flexibility, complexity, level of detail, accuracy, usability, timing, size, number of authors, external links, industry conventions, acronyms, vba macros and a number of other parameters, all equally important in getting an overall understanding of the challenges of a financial model audit of the particular financial model.

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MMRA – major maintenance reserve account

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

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PLCR – Project Life Cover Ratio

The project life coverage ratio (PLCR) is a commonly used debt metric in project finance. Together with the debt service coverage ratio (DSCR) and loan life coverage ratio (LLCR), these debt metrics, in one form or another, usually appear in project finance term sheets and loan documentation, so they need to be modelled clearly and accurately.

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Excel data tables

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.

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