Hi Stefano,

Thanks for your query.  I am sure the Excel file would help!  Once our technical team returns from the seasonal break, I will add it to the course.

In the meantime, please find attached the file as requested.

Kind regards,

Liam

Hello Liam,

could you check if the formula in slide 28/32 for interest receivable is correct?

I think that the correct one should be =+(J$245+(1-$I$243)*(1-J$247)*J$246)*J$241/(1-J$241*(1-$I$243)*(1-J$247))

Indeed I think that the right formula should be. 

I = r*[OB+(1-x)*(1-t)*M] / [1-r*(1-x)*(1-t)]

Thanks a lot and I'm sorry if I'm wrong about formulas.

Stefano

Hi Stefano,

Whether you're right or wrong, there's never a need to apologise.  I agree the formula looks wrong and yours looks right (although I might put one more pair of brackets in for safety!).  However, it turns out that the slide is right, but I agree it's confusing.  Note that the Non-Interest Cash Movement (row 246) includes Operating Cash Flow (Cash Flow Statement, row 22).  This includes Interest Paid (which is OK, the "non-interest" refers to the amount received), but it also includes the actual tax deduction (row 21 of the Cash Flow Statement).  Therefore "M" here is implicitly "M(1-t)" and has already been included.  Taking (1-t) would be double-counting.

It shows you are trawling through and I can see we should have perhaps made this a little clearer.  You definitely made me think though!

Cheers

Liam