Operating Model Resources

actually, i was wondering if someone could critique an operating model i made this weekend for a company...

just got done with the 7 year forecasted operating model - but my circular reference is not working....anyone know any good ways to find out why? i saw that net income is showing up, but the direct link from the cash flows statement to the net income number shows a Div!/0 thingy....circular is definitely on...

Are you using average interest? Change to beginning period then back to average to break circ.

Or alternatively, go to the first cell that "works" (net income, or interest expense line), and re-drag it over the projection period.

Thank you for the advice.

Yes, the net interest line takes the average -LT debt * interest rate + average cash balance * assumed return...

The company has no real other items to consider...

I tried re-doing the formula and it worked! You're a genius! All i had to do was as you said, change to beginning, then back to average...

Why did that work now?

PM and I'll have a look at it... Got the spare time..

Dashri.... this is a relatively undocumented headache that i once had to figure out too, it works because you have to "jump start" the model sometimes in order to start the iteration process.

What alot of analysts do is have a toggle from average int exp to beg of period balance int exp, and switching this on and off helps break the circ bust.