How Prepayments Are Tracked

While the concept of a prepayment is relatively simple, there are numerous methods of tracking prepayments and calculating prepayment rates. Prepayment terminology cannot only differ between asset classes, but even between companies within the same industry. It is important to understand what each prepayment expression means and the underlying calculation involved so historical data can be interpreted and used to make projections. Prior to exploring how to work with prepayment data, it would be...

Introduction

The basic idea behind any financial model is to bring order and understanding to the numerous variables and complex information that financial transactions present. Learning to build one from a blank spreadsheet is often a daunting task to newcomers because of the sheer amount of information and nearly infinite methods of manipulating data. This book seeks to bring a systematic, well-explained method to constructing a particularly popular and adaptable type of model the cash flow model. Through...

The Process Of Building A Cash Flow Model

Although the primary purpose of this book is to guide a reader through the mechanics of constructing a cash flow model, there are some steps that should be taken before and after the model is created in Excel. In particular for readers new to financial modeling, it is important to go through each of these steps to save time. As one becomes more fluent in financial modeling, the steps can be combined, such as building both the basic and advanced framework at the same time rather than in two...