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Level 3
Level 3: Welcome
With level 3 comes S-curves and Part V (5).
What are S-curves? In development modelling most will cash flow out their costs linearly, which is not consistent with how costs are actually incurred. Typically costs start off soft in a project, then ramp up as construction is ongoing to winding down near the closing stage. S-Curves seek to recreate this cost behaviour in our cash flows. When I first started modelling, I couldn’t find any info on modelling these, which resulted in me extracting the formula from one of NASA’s engineering spreadsheets that covered something I knew nothing about…it helps to be able to read excel!
Every medium to large scale developer will be familiar with Part V and the council’s role with these units. The general rule of thumb is 10% of any units developed must go to the relevant council at cost, but realistically everything is a negotiation. While a simple concept, it can be a bit of a pain from an analysts capacity and can frequently cause questionable hiccups in your cash flow and/or results but hey, it’s good to have these things keep us on our toes.
Level 3: About
Level 3: Features
Level 3 introduces;
Part V accommodation schedule
Part V disposal method and discounts
S-curve inputs and results on cashflow
New tab for S-curve visual representation
Excel formulas;
DATEDIF – Calculate the difference between two dates. Now I am not entirely sure of the complete technical running’s of excel but it does not register this formula in its library but it still works and is useful in a lot of modelling scenarios. The formula works like this; DATEDIF(Start Date, End Date, “m”), this will show me how many months in-between those two dates. Alternatively, the “m” can be changed to “d” for days difference and “y” for years difference.
NORMDIST/NORMSDIST - Normal Distribution and the Standard Normal Distribution help us build a cumulative amount for our S-Curves. Refer to S-Curves tab and cells C10:C19 on how this formula is put to use in its most basic form.
Drop Down Menu – In cell H18 we can see a drop-down menu created by the use of data validation function. Go to the Data tab on the top bar of your excel sheet and you should see data validation on what is know as the ribbon. Hit ‘Data Validation’ and select ‘Data Validation’ once more. Under ‘Allow:’ select ‘List’ and under ‘Source:’ I’ve entered the following “Sale on PC, Lease with Council” to create my drop-down menu.
Whilst every effort has been made to ensure complete accuracy, BTR Ireland accepts no responsibility to anyone whatsoever for any errors in this financial model or for any error or loss that may result from using it. Potential investors and their professional advisers should review and carry out their own due diligence on this financial model themselves and form their own views in relation to the reasonableness, completeness, accuracy of calculations and achievability of the projections.
Level 3: Text
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