STEM help / Calculation framework

Results beginning with ‘T’

Target Gearing

A prescription for the maximum relative proportion of debt to equity raised to satisfy the net funding requirement for a network.

The Target Gearing input.

Include: Standard

Tax Charge

The tax to be paid for the current year’s activities, which is shown on the profit and loss statement.

Taxable Profit multiplied by the Tax Rate input.

Include: Essential

Tax Paid

The amount of tax paid during the year, including Tax Payable from the previous year, which features in the cashflow statement.

Tax Charge multiplied by the Current Year Tax Proportion input, plus Tax Payable from the previous year.

Include: Standard

Tax Payable

The amount of tax left to pay in arrears the following year, which appears as a current liability on the balance sheet. For intermediate periods, when modelling in quarters or months, equal to the sum of Tax Payable carried forward from the previous year and cumulative Tax Charge in the current year (which won't be paid till the last period of the current year at the earliest).

In an annual model, Tax Charge multiplied by one minus the Current Year Tax Proportion input. More generally, in the last period of a year, this is calculated as Annual Cumulative Tax Charge multiplied by one minus the Current Year Tax Proportion input; and in earlier periods as Tax Payable Base plus Annual Cumulative Tax Charge, where Tax Payable Base is carried forward from the last period of the previous year.

Include: Standard

Tax Payable Base

The amount of tax left to pay in arrears the following year (which appears as a current liability on the balance sheet), calculated in the last period of a year and then carried forward through all but the last period of the following year.

Calculated in the last period of a year as Annual Cumulative Tax Charge multiplied by one minus the Current Year Tax Proportion input.

Include: Standard

Tax Rate

The annual tax rate on the network Pre-Tax Profit.

The Tax Rate input.

Include: Standard

Tax Relief Regime

A choice of four different models for handling tax relief.

The Tax Relief Regime input.

Include: Advanced

Taxable Profit

The portion of Pre-Tax Profit which is actually subject to tax, taking account of the selected Tax Relief Regime as follows.

None: Pre-Tax Profit, if positive, otherwise zero.

Immediate: Pre-Tax Profit multiplied by the Tax Rate input, even if the former is negative (in which case Tax Charge will be negative, corresponding to a credit from the government, which may be appropriate where the model represents only part of the organisation’s operations, and losses in the operation being modelled can be offset for tax purposes against profits in other operations).

Limited: Taxable Profit before Relief (1) minus the difference between Tax Relief Available (1) and Loss Remaining (1), calculated in turn from Taxable Profit before Relief (2), and so on – see the description of Taxable Profit before Relief (N).

Unlimited: Taxable Profit before Relief (U) minus the difference between Tax Relief Available (U) and Loss Remaining (U).

Include: Standard

Taxable Profit before Relief (N)

Pre-Tax Profit for the current year’s activities, taking account of any limited tax relief from more than N years ago, but before offsetting any losses from N years ago, if available (i.e., input Tax Relief Regime = Limited). (In years when Pre-Tax Profit is positive, any remaining losses are offset against tax, starting with the oldest.)

Taxable Profit before Relief (N + 1) minus the difference between Loss Carried Forward (N + 1) and Loss Remaining (N + 1), if N < 5. Taxable Profit before Relief (5) is the same as Taxable Profit before Relief (U), i.e., Pre-Tax Profit, if the former is positive, otherwise zero.

Note: If you need to accumulate losses for more than five years for limited tax relief, it is fairly straightforward to define the necessary additional results – see 5.17 Defining results. Three derived results are required for each additional year, and you must take care to link Taxable Profit before Relief (N) for the highest N (only) to Taxable Profit before Relief (U) rather than Taxable Profit before Relief (N + 1).

Include: Advanced

Taxable Profit before Relief (U)

Pre-Tax Profit for the current year’s activities, before offsetting any accumulated losses, if available (i.e., input Tax Relief Regime = Unlimited).

Pre-Tax Profit, if the former is positive, otherwise zero.

Include: Advanced

Term

The length of the term for a Debt Facility.

The Term input.

Include: Advanced

Total Assets

All assets of the business, both those which are readily convertible into cash and those which are not expected to be sold or not readily convertible to cash, which collectively should match Total Liabilities plus Equity on the balance sheet.

Current Assets plus Long-Term Assets.

Include: Standard

Total Borrowing

All forms of borrowing used to finance the business, movements in which are shown on the cashflow statement.

Overdraft plus Long-Term Borrowing.

Include: Standard

Total Liabilities

All debts of the business.

Current Liabilities plus Borrowing Payable after One Year.

Include: Standard

Total Liabilities plus Equity

The sum of all debts of the business and equity, which should match Total Assets on the balance sheet.

Total Liabilities plus Equity.

Include: Standard

Traffic

The traffic generated by connections to a Service in the current period.

For a Service: the Annual Traffic multiplied by the Period Length.

Include: Essential for a service or market segment, Standard for a network.

Traffic/Average Conn

The Traffic divided by Average Connections.

Consolidation: Quotient.

Include: Standard

Traffic/Conn

The Traffic divided by Connections.

Include: Standard

 

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