Wall Street Prep — Financial Modeling Course

“Sixteen months,” Leo said. “Assuming no operational hiccups.”

Leo’s breaking point was Module 6: Debt Schedules and Circular References . wall street prep financial modeling course

He had built his model. Revenue growth was 5%. COGS followed historical averages. Depreciation was linked to PP&E. But when he added the revolver (a type of short-term loan), his Interest Expense exploded. Interest Expense ate Net Income. Net Income reduced Retained Earnings. Retained Earnings broke his debt covenants, forcing him to borrow more on the revolver, which raised Interest Expense again. “Sixteen months,” Leo said

He hit F2, traced the precedents, and typed: traced the precedents