As soon as you open up this file, an error pops up It tells us that there are one or more circular references So we need to get rid of this circular reference. So first of all I press "OK" And some blue lines appear and I could scroll up and down and have a look at them The first thing I want to check is this interest in the income statement? If it is, then that's okay But it's not, I can see that there's no interest going into the income statement and the blue lines have not attached to it This is an unintentional circular In order to go looking for this, I'm going to use the error checking tool. Now the shortcut for that is ALT M K D C Now this shows me all of the cell references in a circular. I'm going to start all the way down at the bottom, F192 Now I need to pay attention to the labels here, it says short term borrowings (this is a reference to short term borrowings) What I want to do is go up through the blue arrows and check all of the labels to see if anything doesn't seem to fit So short term borrowings, okay so we scroll up to the next blue blob And we now have quite a few Ending short term borrowings, is the sum of the two above, okay! Short term borrowings issuance or repayment, no problem there. Surplus cash revolver requirement No problem there! Everything so far is to do with borrowings or cash to pay off borrowings So there's nothing that seems out of place and all of the formulas seem fine I now come up to cell F133 and it says change in operating working capital. That does seem a bit strange and it does seem to stand out Let's carry on up And I get to the balance sheet and it's now got total current liabilities and short term borrowings, okay. Keep on going up again And we get to operating working capital and operating current liabilities So operating working capital seem to stand out, everything else seemed to be borrowings or cash related Well let's see if we can check these formulas, is that correct? Yes, current operating assets minus current operating liabilities, no problem there Current operating liabilities is coming from F104. Let's see what that is And instead of it being current operating liabilities in F103, it's coming form total liabilities in F104 What we have is we have, short term borrowings going into our operating working capital Short term borrowings should definitely not be going into operating working capital The upshot of this is that short term borrowings are now going into my debt calculation to help me calculate short term borrowings So I'm using short term borrowings to calculate short term borrowings. And that is a circular reference So let's work our way back up, let's change that error reference It shouldn't have been F104, it should have been F103 Now I notice the error moves to column G, there's now a new circular reference that has popped up Because Excel can only show me one circular reference at a time. But if I copy this to the right Again it moves to the right, I copy again, it moves to the right. And if I copy it all the way to the end, it should disappear You'll notice in the bottom left hand corner, at the moment it says I've got a circular reference But if I copy this to the right, the circular reference disappears