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RORAC - Coggle Diagram
RORAC
future
(target) (Pricing RORAC)
(=) Customer rate (nominal)
(+/-) IDC, subsidies
(=) Deal IRR
(-) Cost of debt (100% MF)
(=) Gross interest margin
(+) capital advantage
(=) Net interest margin
(-) Std cost of credit risk
(-) Opex
(=) Net EBIT margin
(/) EC
(=) RORAC
(+) Fees
present
(forecast) (ACQ RORAC)
= net EBIT margin % / EC %
CURRENT monthly expected RTCS MF costs
PAST based monthly avg CoR
PLF <-- rating/score at acquisition
PLS <-- deal structure (DP, RV, term)
PAST based
mthly avg EC input
PLS
PLF
borrower type (corporate up --> EC up)
FUTURE based OR (bi-annual [VI/XII] SORC process)
PAST based monthly avg Fee
past
(actual) (PF RORAC)
= adj EBIT / avg EC
(adj EBIT = EBIT +/- fund adv)
(fund adv = [EC - equity] * 6M MF costs)
^ actual figures (incl. act. funding costs)