First thing to do in this model is go to the info tab, check that the circular is off, and it is indeed off. We'll then hit Alt + F+ T, go to formulas and enable iterative calculations is off as well. In this model, we'll go through three checks, sense check, structure check and a stress check. There are a couple of errors in this model. I'll see if we can find them. We'll start by looking at the income statement. If we look down through the income statement, I don't see any of my numbers looking too bad. My revenue seems to be growing normally. Operating costs the same. EBIT seems to be going up quite normally. Very good. I noticed that interest isn't there, so that certainly is a worry. But then I realize that the circular switch is off so that makes sense for now. Earnings before tax looks okay but then I notice that my tax expense goes from 300 to 414, but then jumps to 1,122.

So that's a red flag on my sense check. If we have a look at the formula, let's investigate it. It's F6 times by F29. F29, cell above, that's fine. Let's go up to F6. And we find that we're actually looking here at our operating costs as a percentage of revenues. It should be the cell below. So back again, that instead of being F6, should be F7. Copy that to the right. That looks a bit better. Let's see if there's anything else we can find. If I go down to my balance sheet, everything seems reasonable. Admittedly, cash does jump around a little bit. But that is what happens with cash. Operating costs. Yep, growing nicely, long-term assets growing nicely. However, if we just go to the right-hand side, you might notice in cell O51 that we've got a zero and you might notice that cash suddenly jumps up through the roof. So I want to investigate that zero. I'm in column O and if I look into my formula, I see O24 but I also see times by P10 and that P is a bit worrying 'cause column P should be blank. There should be nothing in column P at all, so that's why we're getting that zero. If I investigate year one, and here it is, I've got G10 times by F24, that should be F10. Copy that right and those figures have corrected themselves and cash, it looks a bit more sensible as well. A helpful check here is to hit Alt + M + H and that reveals your formulas. If I just put this back to G10 as it was before, it kind of stands out now 'cause I'm in column F, F83, F24, F38, sum F50:F52, and that G does stand out a little bit. I'll undo that, so Alt + M + H again and we're good. Lastly, let's do some stress checks. If I go back up to the top, I can see that I've got expansionary CapEx in year 2017 to 1,400. I'm going to investigate what happens if I change that. If I put my CapEx up, then my cash will go down. So let's make a note of what cash is. Cash is 1,160.5. Let's highlight that. And my revolver at the moment is a zero. Let's go change that CapEx. Instead of 1,400, let's change it to 5,000. I'm expecting cash to go down and the revolver to go up.

There we go. Cash has gone down to zero and my revolver has shot up and it gradually gets repaid as time goes on. One other thing we might want to check, because of those changes, interest should have changed. So let's scroll down, find the interest and interest on the revolver has jumped up and interest on cash has jumped down.

So three checks for you there. Sense check, structure check and stress check.