Available modeling methods
| Method / input | Behavior |
|---|---|
| Default financing expense | Simple interest uses opening debt and revolver; detailed loans account for dated movements. |
| Expense override | Amount or percentage of an eligible debt reference. |
| Interest income | Amount, growth or percentage of an eligible cash reference. |
Know which source owns interest
An explicit detailed interest-expense source can replace schedule-derived interest. Review that source before expecting a debt change to alter expense automatically. Inputs for expense are positive cost amounts and appear as deductions in the statement. Income and expense retain their distinct paths to pre-tax income.
Example workflow
Change a loan’s rate and inspect interest, tax, net income and cash. Then compare an explicit interest amount in another scenario. For DCF, use operating FCFF and WACC rather than subtracting financing interest from FCFF a second time.
Documents the current implemented behavior. Example assumptions are not market data.