Net Borrowing
The net funding requirement for the network, defined as Overdraft plus Long-Term Borrowing minus the sum of Cash, Cash Deposits and Investments.
Balancing Variable minus Equity.
Note: Share Capital, and hence Equity, must be calculated before Net Borrowing, as the amount of Share Capital is not allowed to decrease.
Note: x represents the Balancing Variable in 10.3.14.1 Understanding the equations.
Include: Standard
Net Fixed Assets
The depreciated value of Resources installed in the network. (Also called Written-Down Value.)
Note: This result has been re-defined so that it no longer includes current-year depreciation, so that, for example, a Resource with a Physical Lifetime of 1 never shows any written-down value in the end-of-year balance sheet.
Include: Essential for a function and a resource, Standard for a network, service, market segment and service/resource).
Net Initial Assets Check
A cross-check to see how the initial assets calculated from the pre-run installation of Resources compare with the amount implied by the other year-zero initial values for the balance sheet. If this result is positive, Initial Long-Term Borrowing will have been increased by the required amount; whilst if negative, Initial Investments will have been increased by the deficit. It should be zero if the year-zero data are well matched.
The assets at the beginning of year zero are calculated from the (end-of) year-zero results as Net Tangible Assets plus Net Intangible Assets minus Capital Expenditure plus Depreciation plus Amortisation.
The amount implied from the year-zero initial values is calculated as the sum over Services of Initial Creditors, plus Initial Tax Payable plus Initial Dividends Payable plus Initial Long-Term Borrowing plus Initial Share Capital plus Initial Retained Earnings, minus Initial Current Account minus Initial Cash Deposits, minus the sum over Services of Initial Debtors, minus Initial Investments.
This result is only significant in year zero, and is defined as zero for subsequent years.
Include: Advanced
Net Intangible Assets
The written-down value of intangible assets, such as capitalised licence fees.
The amortised value of Resources with input Tangible = No.
Include: Standard
Net Interest Expense
The net amount of money spent on interest payments by the network.
Interest Expense minus Interest Income.
Include: Essential
Net Interest ExpenseConn
Net Interest Expense divided by the total number of Connections.
Include: Standard
Net Profit
The annual profit of the network after payment of interest and tax, but before dividends.
Pre-Tax Profit minus Tax Charge.
Include: Essential
Net Profit Margin
A measure of the profitability of the business.
Net Profit as a proportion of Revenue.
Include: Essential
Net Surplus Cash
The amount of surplus cash, after allowing for cash required in the ‘current account’. A positive amount is shown as Surplus Cash, whereas a negative amount is shown as (positive) Long-Term Borrowing Required.
Minus the sum of Net Borrowing plus Current Account.
Include: Standard
Net Surplus Cash Adjusted
The amount of surplus cash, after allowing for cash required in the ‘current account’ and also any surplus Debt Facility balances.
Net Surplus Cash plus the difference between Long-Term Borrowing and Long-Term Borrowing Required.
Include: Standard
Net Tangible Assets
The written-down value of tangible assets.
The depreciated value of Resources with input Tangible = Yes.
Include: Standard
New Borrowing
The amount of new borrowing required over and above residual Debt Facility balances, allowing for amortisation in the period.
Long-Term Borrowing Required minus Debt Balance0 after Amortisation.
Include: Standard
New Connections
The number of new connections to a Service, including those arising from churn.
Include: Standard
NPV (EBITDA Multiplier)
The net present value of the network, i.e., cumulative discounted cashflow generated to date, including a terminal value based on a multiple of the final year EBITDA.
NPV (Zero Terminal Value) plus EBITDA multiplied by EBITDA Multiplier.
Select Constants from the Edit menu in the Results program to change the value of the EBITDA Multiplier constant when the Network NPV (EBITDA Multiplier) graph is displayed. The graph is updated automatically to reflect the new EBITDA Multiplier.
Include: Standard
NPV (Perpetuity Rate)
The net present value of the network, i.e., cumulative discounted cashflow generated to date, including a terminal value based on growth to perpetuity.
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where Cn is the Free Cashflow and p and d
are the Perpetuity and Discount rates, respectively.
Select Constants from the Edit menu in the Results program to change the value of the Perpetuity Rate constant when the Network NPV (Perpetuity Rate) graph is displayed. The graph is updated automatically to reflect the new Perpetuity Rate.
Include: Standard
NPV (Zero Terminal Value)
The net present value of the network, i.e., cumulative discounted cashflow generated to date, making no allowance for the terminal value of the network.
Calculated from the Free Cashflow (Cashflow before Financing with Net Interest Expense and Change in Investments added back) and the Discount Rate.
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Select Constants from the Edit menu in the Results program to change the value of the Discount Rate constant when the Network NPV (Zero Terminal Value) graph is displayed. The graph is updated automatically to reflect the new Discount Rate.
Note: It is possible to refine this formula – see 10.3.15 Financial valuation.
Include: Essential
NPV at X%
The net present value of the network, i.e., cumulative discounted cashflow generated to date, making no allowance for the terminal value of the network.
Calculated from the Free Cashflow (Cashflow before Financing with Net Interest Expense and Change in Investments added back) and a fixed Discount Rate of X%.
The Discount Rate is set in the global Financial Data dialog in the Editor.
Include: Standard