Before doing this edit, a few checks. We check that the circular is off. So if I go to the Info tab, I can see the circular switch is zero. And if I hit Alt + FT, iterations are turned off. Let's start putting this edit through. It's 10 year long-term debt tranche two with issuance of 700 in year 2016, and an interest rate of 4.5%.

So I insert a new a line underneath the current debt. I'm gonna call that current debt one and the new debt will be debt two. The issuance that we want is 700. That's in the second year, so I'm gonna put zeros in every other year, and with a 700 in 2016. We also need an interest rate. So I'll put a new line underneath the current interest rates. Call the current one debt one and the new one debt two. The new interest rate is 3.5%. Curiously, it's a little bit lower than the current interest rates. There must be a very good reason for it and that's our assumptions updated. Next, we'll go down to the next debt section. So underneath the income statement, balance sheet, and cashflow this is where we'll now carry on. At the moment it says long-term debts, one issuance sale. I can see that's actually linking up to cell B17. I don't want that to say debt one, I want that to just be all my long-term debt. So I'm gonna copy that value in there. I can now update it and get rid of that one. I'll come back and I'll change those numbers in just a minute. The big change is going to be this section here, so I'm gonna leave that as it is, but I'm gonna insert some lines underneath and then copy those headings down. For the first ones that we left there, that's long-term debt one. Again, I can see that's linking up to the previous heading, so I'm gonna copy that, paste values, and I can then edit that to long-term debt one issuance and ending long-term debt one.

In the next section, let's update everything. So it says two. Again, I can see that I've got a rogue link here. So let's copy those. Heading's from above, let's change that one to a two, ending long-term debt two. Getting your labels right is crucial. As you saw when I copied down there, we had a rogue label come in with the revolver and we saw some dynamic links. Dynamic links are okay as long as they're linking to the right thing. Now ending long-term debt two starts with a zero. I'm gonna hard code that in, which means I'll need my cell styles. So I'll make that blue hard code. My beginning links back to the previous year's ending and the issuance repayment comes from our assumptions. So there it is in F18, it's zero. Next year it'll be 700. My ending long-term debt is the sum of the two items above. And then I copy all of that to the right. Now, what should I see? I should see an issuance of 700 in year two and then I should see that balance carry on every year thereafter. So there's the issuance and I see the ending balance of 700 every year thereafter. Fantastic. So the debt has been introduced. We'll have to link it to a few other things in a minute. Now, let's do the interest. I'm going to leave the current interest as it is, that's debt one. And then underneath that we'll have interest on debt two.

Let's see how the interest has been calculated for debt one. We can see it's an average of last year and this year's ending balance times by the interest rate. I want to do the same kind of thing. I want to keep consistency as much as possible. So last year and this year, multiplied by my assumption, and there's my assumption in F21. As I copy that to the right, I should see the figure jump up in year two, and it does. At the bottom of here we've got some statistics, so we need to update those. First of all, the debt. At the moment, that's just adding up the revolver and long-term debt one. I need to add in debt two as well. Copy that to the right and we see a big jump.

Now, the net debt underneath is being driven by the debt. Debt to EBITDA, being driven by debt. Net debt to EBITDA being driven by net debt, that's all fine. But my EBITDA interest expense is currently excluding that new interest. So I'll scroll up and I'll now add in interest on long-term debt two.

Copy that to the right. I should see those multiples change a little, and they do. So I've updated all my statistics and I've updated the new tranche of debt. There's my debt tranche two. I need to update a few other things. So here we had long-term debt issuance or repayments that's just linking to debt tranche one, so I need to add onto that. Debt tranche two, just scroll up to the top And add in tranche two. There it is. Copy right. And I see a big jump in some of those figures. I'm happy with the net debt and interest calculations. Now, the two last things I need to do in the balance sheet long-term debt, I need to include debt too. And in the income statement I need to include interest two as well. So here's our balance sheet at the moment, just linking down to F103. So let's scroll down. There's F103 that it's linking to. I need to add in F107 as well.

Let's check that we see that change in the balance sheet being reflected in the cashflow statement. I should see a big change between 2015 and 2016. It's roughly 1400 and there it is. We see our debt going up by just under 1400. Last up in my income statement, I want to update the interest expense. At the moment it's adding up just F109 and F110. That's the revolver and debt one interest. So I need to add my debt to interest. So I scroll down and there it is, my interest on long-term debt two.

Copy to the right. It's all zeros at the moment because the switch is turned off. Before I turn it on, let's check the balance sheet balances, and it does. So let's turn the switch on. Change that zero on the Info tab to a one. I get a circular reference warning and let's turn iterations on, Alt + FT. Go to Formulas, Enable iterative calculations. Let's go back to model one. I check it's still balancing, it is. And I go back up to my income statements and interest is now flowing through.