Case Study Looping Back - Debt Service Capacity Charge
- 02:33
This video passes through the model again, filling in blanks. Here we calculate total revenue.
Transcript
So we've done dividends and we're ready to start doubling back. The overall tactic is to go back to other tabs and make sure that everything is filled in. because we're about to enter into a highly circular part of the model. We're just gonna make sure again, that you've got iteration off. If you try to test anything, switch it on and forgot about it, it's quite easy to forget. And so now and again it's just good to jump in there and make sure that iteration is off. The other thing we would check is whether the switch is off. And it is, again, if you've done a bit of checking then you may have switched that on for some reason. And so just making sure that it's off is a good idea at this point. Now in operations, you can see here we've got no gaps until capacity charge. We skipped that very early and we said that we're going to charge the off takers for the debt service and they're gonna pay for 100 percent. And so they're gonna de-risk the project to a great deal there. This be negotiated point. So we've got that 100 percent as an assumption just in case it goes down.
And what we're gonna do is we're gonna build a switch protected because this is circular, remember that's noted in blue. And if it is on, we will go and fetch. You can see what we want as we want the total debt service. Now you can see that's gonna come out as a negative figure, so we'd like to flip that sign just to make sure it works because we're turning it into revenue and we need to give it a fail state, which is a zero there. So let's copy that to the right. I know all zeros. So we've created a switch there and we've turned off iteration, so let's just check that's working.
Okay, nothing's happening.
It's because the switch is off, throws the switch and you can see that's working okay. And what it's doing is it's creating a new revenue stream. If we've got the switch on and that revenue stream is a debt service and it will create then money and that money will become interest. And so it is kind of circular and that's why we've protected it with a switch.
Now what we should do really is turn the switch back off again, go back into our non iteration and we should now move on and look for the next gap. And you can see we're done with operations and so we'll be ready to move on to source and uses.