I’m trying to calculate cash flows at different occupancy rates, but when I try to find the NPV of the property at those assumed occupancy rates, the whole model goes awry. I don’t know what’s happening.
Any pointers on how to run these analyses more efficiently?
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Is the property still cash flow positive at all these different occupancy rates? If you fall below breakeven occupancy, then you have an issue of negative cash flow which must be solved. Given what you wrote, that's only thing that jumps out.
It’s not. I have to show my principal the minimum occupancy rate needed in order to have a positive NPV. Problem is, when I run these analyses, the model goes all over the place. I need to figure this out
Not sure what "all over the place" means, so without more detail, hard to give any ideas
So when I ran the basic analysis - at an assumed 100% occupancy rate - the NPV and cashflows were at a certain number. But when I started running sensitivities at different occupancy rates, starting with 10% and gradually moving up, and auto filled the next ten cells, the NPV and cash flows at 100% occupancy were way different than the original analysis at 100% occupancy.
I would just audit the formulas and results line by line, year by year until you figure it out.
Gonna try that.
I’m kind of in charge of the ‘corporate finance’ aspect of our family run re business which would include building excel models, lmk if you have any pointers or excel shortcuts I can use
I'm out of my "excel guy" days so not best person to ask for shortcuts. My only advise with this type of situation is to just not be afraid to grunt it out and rebuild if you need to. Being fast is only a "skill" in fast paced world of transactions (like IB or IS/DE), being methodical and accurate (which takes time) is more apt for your type of role.
Sounds like you have a fucked up circular reference somewhere. How big is the model? Like redever said you’ll have to audit the formulas. It probably went wrong with the interest reserve or capital sizing somewhere.
can you look at a previously saved version of the model and try and back into where things got messed up?
I figured it out! Thanks
Can you be more specific, maybe post screenshots or a link to the model? It's hard to audit an excel spreadsheet from the info you gave.
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