We've opened up a model that needs editing and the first thing I notice is at the bottom left hand corner it says Circular References. So I want to go to the Info tab, and if I go down to the Circular Switch, I can see it's got a one in it. So let's turn that off. And yes, that has gotten rid of that circular reference. Circular reference usually means that the iterations are turned off, but let's just double check. So I press Alt + FT, go to Formulas, and iterations are turned off. Let's have a look at the instructions we've got for this session. And we're told to edit the model to include the following items: a 10-year long-term debt tranche two with issuance of 700 in year 2016 and interest rate of 4.5%.

In the Model 1 tab, let's plan the changes that we want to put through. Underneath my income statement and balance sheet assumptions I've got my net debt assumptions. And I can see that there's long-term debt issuance repayment in there already. So I'm gonna add an extra line, I'll call this one debt one and I'll call the next one debt two. We've got an interest rate there as well so that'll be interest rate for debt one, we'll have a new line for debt two.

On the income statement, we'll have to make sure that our interest expense is updated. My boss has told me that unfortunately I can't put any new rows in the income statement, balance sheet, and cashflow statement this time. I don't know why, but the boss has decided that. So I'll have to incorporate the new interest into that formula. In the balance sheet, the long-term debt there, again, I'll have to incorporate the new debt into that line item.

And in the cashflow statements, my long-term debt issuance and repayments, I'll need to incorporate the new debt item into there as well. As that's linking up to the balance sheet debt, we should find that the figures just flow through into the cashflow statements. Underneath this section we've got the net debt and interest calculations, and it's that long-term debt issuance line there at the moment that's just incorporating debt one, I'll need to incorporate debt two. And the biggest change will involve this section here. We've got beginning long-term debt, we've then got issuance and ending, that's all for debt one. I'll keep that intact so I'll insert some extra lines underneath and do something similar for debt two. I'll then have to do interest on long-term debt one, add an extra line for debt two. And then we've got some stats underneath here, we'll update them to include the new debt and new interest.