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How Valutico calculates the Interest Expense and Interest Rate for Adjusted Present Value.
How Valutico calculates the Interest Expense and Interest Rate for Adjusted Present Value.

APV, Adjusted Present Value, Interest Rate, Interest Expense, Calculates, Calculation, Formula, Method, Methodology

Updated over a week ago

For Valutico's calculations, we would look at the previous year's average and the current year's debt - then multiply that by the interest rate.

(Cost of Debt pre-tax, calculated by taking the Credit Spread + Risk-free rate.)

For example, to calculate the Interest Expense of a company with 1500mn in Debt in 2021, and 1500m in debt in 2022, with an interest rate of 4.4% - the calculation would be:

( (1500mn + 1500mn) / 2 ) * 0.05 = 1500mn x. 0.05 ~ 65.7 Interest Expense.

(All he values are rounded off for this example, please refer to the image below for the detailed example)

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