Assumptions Report No. 5 - Funding, Interest Rates & Related Items

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Guidance on Entering Assumptions > Assumptions Report No. 5 - Funding, Interest Rates & Related Items

This assumptions report deals with funding and a diversity of related matters.

 

Interest rates (% per year):
-Cash at bank
-Short-term loans/credit (Overdraft)
-Long-term debt/notes
Increases in long-term debt/notes ($000)
Long-term debt/note repayments ($000)
When calculating interest on Short-term loans/credit, Exl-Plan applies the specified interest rate to the previous year’s closing balance (if any) plus 50% of the current year’s pre-interest cashflow (if this negative).

To calculate interest on Cash at bank, Exl-Plan uses the specified interest rate and the previous year’s closing cash balance (if any) plus 50% of the current year’s pre-interest cashflow (if this is positive). Once interest for the year has been calculated, any positive net cashflow for the year is used to reduce any existing Short-term loans/credit and the balance is then treated as Cash at bank. If the net cashflow is negative, it is used to reduce any Cash at bank and/or added to any existing Short-term loans/credit.

Long-term debt interest is based on the specified Long-term debt interest rate and the previous year’s closing balance for any Long-term debt plus half the net change for the year arising from any repayment or increase in the balance outstanding.

 

Total long-term debt/notes ($000)
Proportions payable within one year: 
Estimate approximate percentages so that liabilities for these loans etc. can be allocated between current and long-term liabilities in the projected balance sheets. When using this facility, account must be taken of any repayments anticipated during the following year as well as any increases in loans likely to arise during the current year. To ignore this facility and treat all liabilities for loans etc. as long-term liabilities, enter zeros throughout.

 

Miscellaneous income ($000)
This is credited directly to the income statements. Consider whether it should be entered gross or net of any taxes.

 

Operating lease payments ($000)
These should exclude finance and capital leases, which should be treated as capital expenditure financed by long-term debt.

 

Intangible asset amortization ($000)
Enter the amounts by which these assets should be written down. Use a negative number to increase the value of intangible assets.

 

Changes (+/-) in accrued expense ($000)
Changes (+/-) in prepaid expenses ($000)
These  rows enable adjustments to be made to the projected cashflows and balance sheets to take account of prepaid and accrued expenses. It is not essential to use this feature unless it is desired to make specific adjustments in order to improve the accuracy of the cashflow projections or to accommodate substantial cash movements, which cannot be handled elsewhere.

 

Proceeds of new stock issues ($000)
Enter amounts net of expenses and commissions.

 

No. of new ordinary shares issued (000s)
No. of ordinary shares issued & fully paid at opening balance sheet date (000s)
These numbers are used to calculate share-based values such as earnings per share etc. in the Ratio Analysis Report.

 

Effective federal/state tax rate (%)
Enter an effective combined tax rate after taking account of net operating loss carry forwards etc. The payment of resultant taxes is handled in Assumptions Report No. 7 - Year-End Credit Balances. Ignore this item if the business is a sole trader or partnership.

 

Dividends declared ($000)
Enter values for dividend declarations for each year. The payment of dividends is handled in Assumptions Report No. 7 - Year-End Credit Balances.

If the business is a sole trader or partnership this item changes automatically to Drawings ($000) and the following two rows facilitate the entry of income tax liabilities and payments.

 

Income tax provisions ($000)
Income tax payments ($000)
Enter estimated amounts. This item does not apply when Exl-Plan has been set up for a corporation.

See Also:

Assumptions Report No. 1 - Sales Forecasts

Assumptions Report No. 2 - Materials/Goods, Other Direct Costs & Purchases

Assumptions Report No. 3 - Overhead Expenses

Assumptions Report No. 4 - Fixed Assets

Assumptions Report No. 6 - Sales & Related Taxes

Assumptions Report No. 7 - Year-End Credit Balances

Opening Balance Sheet

Prior-Year Income Statement

Detailed Guidance on Generating Projections

Guidance on Entering Assumptions

Changing Exl-Plan



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