Month: June 2020

Predict, Not Extrapolate.

Payable is the New Debt for China’s Top Developers

For China’s property developers, there are three main sources of funding to support land acquisition and property construction – debt, pre-sale, and increase in payable. Debt, either bank loans or bonds, must be repaid with cash at a pre-defined maturity date. Pre-sale, the proceeds from preselling uncompleted properties, is repaid in kind by delivering completed…
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Why 3-Statement Forecasting is not Enough

By Jack Xu In the previous article, I discussed what constitutes a model for the purpose of forecasting the future values of a variable. A model specifies the cause that changes the values of that variable. A forecast that simply assigns the future values based on prior experiences is not a model. In this article…
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Financial Modelling: What is NOT modelling?

By Jack Xu What is NOT modeling When modeling for real-world applications, we almost always deal with the time series of a variable. For example, with revenue, we are interested in the values of revenue over a period of forecasting horizon, such as four quarters each year for the next 5 years. That is a…
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