Here we want to calculate the Consolidated tax expense for the new Co.

There are quite a lot of items to include here. So, how can we organize them in our head? Well, our first one a standalone combined tax expense. That's the tax expense for companies A and B or our acquirer and Target.

But every item after that looks at something that happens because of just the deal these are due to deal adjustments.

So the impact the financing extra interests means less profit means less tax.

The impacts of cost and revenue synergies net of the restructuring costs again. They're going to increase profits and increase taxes. So they're another deal adjustment.

The impact of reduced depreciation is another deal adjustment and if within some them all up, we'll get to the new code tax expense all our Consolidated tax expense.

So here we're using our classic M and a formula to consolidate a line item. You take company A's figure company B's figure and then any deal adjustments.

So let's get on to modeling them.

We'll be working in column G.

For many of the deal adjustments we're going to need to tax them and we'll use the new codes MTR.

We can find that on the assumptions tab.

All the way down to the bottom of the left hand corner in row 43, I click on that. I'm going to lock onto that.

So now let's get bringing everything together. My Standalone combined tax expense that's going to be company A's and Company B's tax expenses. So firstly I go to the acquire tab I scroll down find their tax in column G.

And then I add on to that.

The tax from the calendarized target tab again same place.

Down to the tax and column G.

The other items are all here on the calcstab, very handy to have all of our calculations in one place.

Firstly the impact of financing.

What we've got.

just above Is the new co-net interest expense? Now I want to compare that to the Standalone combined net interest expense. It currently shows zero because we've got our circular switch turned off.

Any extra interest expense that's happening here, which we will have.

Will lead to profits going down and then tax goes down as well. So I want to find a difference between them and then tax that at the 30% now at the moment that's going to give me a negative figure which actually makes my tax look like it's going up. I want to change it from negative to positive. So let's just put a negative symbol at the start.

And now we've got that positive impact on financing.

Next we have the impact of synergies and restructuring. I can sum all of them up.

We've got our cost energies in row 7 Revenue in 9 and restructuring in 11.

Some all of them up and then we need to multiply them by the tax rates of 30% Now the impact of all of those is to increase your profits if your profits increase that means your tax should be increasing but here we're showing a positive number. So again, we'll just go in and edit that.

And put a negative sign at the beginning.

The impact of reduced depreciation again. That's at the top of this page.

In row 13, we have the capital expenditure synergies. They led to depreciation savings depreciation savings. However, they put your profits up and so our tax needs to go up as well. So I'll multiply that by the tax rate.

And then put a negative sign at the beginning because our tax needs to go up if I then sum all of those items the Standalone combine tax expenses and then all of the deal adjustments we get to the new codes new tax expense of 1,748.6.

The last thing we need to do now is put that new code tax expense into the new codes income statement. So if we go to the new code tab we can see the incomes de and F. We've got the two companies Standalone tax expenses added together.

But from column G onwards after the deal we need that new figure from the calcs tab.

Because we had the impact of financing on the new tax expense that impact of financing will lead to a circular so our tax will lead to a circular as well.

So I'm going to use an if statement to get around that I'm gonna say if Open brackets the Cirque switch equals a 1 and that circswitch is on the model intro tab is update the top.

If the silk switch equals a one I want the new tax expense of 1748.6 to appear.

However, if that value is false, I just want a zero.

Now at the moment our Cirque switch is off.

So we get a zero appear here.

If we just go to that model into a tab for a second there we can see that search switch. It's there in row 9.

If I would turn that on I would then get a circular reference warning. So I would need to go into my Excel options and enable iterative calculations.

The only things we need to do now are to copy all of these figures from G to the right and we do the same thing on the newco tab copy that new text to the right and we'd be done.