TTS: Introduction to Financial Modelling

Question 1

What is a good Debt/EBITDA

Answer 1

Shows Debt Capacity
Higher is riskier
Look at it v/s peer group

Question 2

What is the interest coverage ratio

Answer 2

Interest coverage: EBITDA/Interest Payment

Question 3

What is Net Debt

Answer 3

Debt - Cash / CE

Question 4

EBITDA - CapEx / (Current Borrowings + Interest Expense)

Answer 4

Cashflow capacity to service + repay debt

don’t want to be one or below.

Question 5

What is CFADS

Answer 5

Cash Flow after Debt Service

Question 6

What is DSCR

Answer 6

CFADS / Total Debt Service (Interest + Principal)

Question 7

settings to adjust when doing financial modelling in

Answer 7

ALT F T (Settings)

• Turn on Automatic Calculations
• Disable iterative calculations at the start to prevent accidental circularity

Question 8

What is a cash sweep

Answer 8

Cash used to pay debt of the sponsor

Question 10

mechanical steps for financial modelling in excel

Answer 10

Optimise Excel settings; ALT F T

Historic data + ratios
Forecasting IS, except interest income and expense

Question 11

how to calc gross margin from COGS

Answer 11

1 - COGS is gross margin

Question 12

how to find the precedent quickly

Answer 12

CTRL + [

Question 13

WHAT IS SHORTCUT FOR A COMMENT

Answer 13

SHIFT + F2