Project Finance Structuring with Sculpting with Complex Issues

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This website just has tons of corporate finance models, project finance models, energy analysis, merger models, databases, exercises, video explanations, case studies and excel utilities that you cannot find anywhere else.


Debunking Conventional Wisdom About Finance Theory and About Financial Modelling

  • Unlike consulting companies that give you all of the usual blah, blah, blah, complete with their acronyms, colour codes and best practice rules, the project finance models and exercises on this website demonstrate how to solve complex structuring issues after you hit the circular reference wall.  For example, problems such as debt sculpting where the DSCR includes cash produced by changes in the DSRA are solved with unique user-defined functions;
  • Unlike the simplistic McKinsey value driver formula or DCF models that do not deal with normalisation of terminal cash flow, nuanced corporate finance issues are addressed in detail on the website.  For example, financial models are developed that demonstrate why the McKinsey value driver formula V = (E x (1-g/ROI)/(cost of capital-g) contains errors and biases attributable to inflation and changing growth rates;
  • Unlike Damoradan and others who use magic potion to derive country risk premia for debt and equty, files and videos on this website show that typical cost of capital adjustments for projects in developing countries amount to theft from local populations. Through evaluating implied probabilities of expropriation and implied probability of default, the black box Damoradan models are proved to be rubbish;
  • Unlike consultants and business school professors who continue to advocate tired old CAPM and WACC formulas, creative ways to assess the cost of capital are presented and analysed on the website. These methods, including regression of market to book and earned returns and implied cost of capital from multiples, are illustrated with comprehensive financial databases that you can modify and automatically update yourself;
  • Unlike S&P and many others who suggest credit quality is better with high return on investment, the project finance and corporate finance case studies presented on the website demonstrate that high returns can be a big danger sign. High returns attract firms to an industry which can lead to surplus capacity or the high returns can create political risk by assuming stupidity on the part of governments. Continuing high returns depend on monopoly power (e.g. Google or Microsoft) or keeping consumers addicted to products (e.g. Apple or Disney). Exercises, videos and completed financial models on this website demonstrate that valuation and credit analysis often boils down to assessment of whether monopoly positions and/or addictions will continue;
  • Unlike some Harvard Business School cases which advocate using the APV method in valuation and get lost in the issue of how to deal with tax deductions for interest expense, this website clarifies valuation issues using financial models to prove concepts. Age old arguments about how to treat taxes in the WACC are resolved with financial models by showing how net of tax debt amount should be used along with debt cost that is not adjusted for income tax when developing cost of capital;
  • Unlike people who steal your money when you use Paypal (Elon Musk) and who make grandiose assertions about energy storage from batteries, energy analysis is developed using clear approaches enabling you to understand the drivers to cost and benefit analysis. The energy analysis includes comprehensive merchant market databases and unique methods of integrating project finance concepts into a carrying charge rate;
  • Unlike bankers and analysts who assert solar power cannot possibly be produced for 2 USD cents per kWh, the resource analysis combined with cost of carrying charge rates in the energy analysis section of the website demonstrate that the low solar levelised costs are not surprising;
  • Unlike business television announcers who have a big smile when the stock market has “winning streaks”, databases developed on this website allows you to think about finance issues in a deeper manner.  For example, a comprehensive stock price database allow you to compare stocks to economic indicators and commodity prices and understand that large increases in the stock market imply: 1. the economy will grow at very high (impossible) rates; or, 2. providers of capital (shareowners) will take more value from the economy than other providers of economic service (e.g workers); or, 3. the cost of capital (required return) has declined;
  • Unlike other websites, tools that you can use to fix excel problems (like interpolation, colouring, copying to the right) and convert PDF to excel are provided with open source using VBA code that you can download for free. Using these tools, you can become a top modeller rather than a copy and paster.