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We now proceed to create our final submodel, which contains our operating expenses. 


OPEX

Operative Expensive (OPEX) are in our case modeled as the sum of the three nodes: "M&S", "R&D" and "G&A": (Marketing & Sales, Research and Development, General & Administrative)


Splitting costs into Personnel and Non-Personnel and their Projection

Once again, you have the chance to train ROLLFORWARD projections, this time also with transforming the personnel split into non-personnel split  with ADDEACH formula  as described in 3. MDE Product.

Try to use the description to create your functions and when ready, have a look at the solution

Nr.NodeDescription
1.M&S Personnel Cost

Switch the sign of \'Base Data\'.\'Base Data M&S\', use \'Drivers\'.\'M&S Personnel Split\' to calculate the personnel part of costs. Roll it forward afterwards with \'Drivers\'.\'Merit Increase\' as a driver.

2.M&S Non-Personnel Cost

Transform the \'Drivers\'.\'M&S Personnel Split\' into the non-personnel split. Apply the result to
\'Base Data\'.\'Base Data M&S\' to calculate the non-personnel costs. Project the result into the future with \'Drivers\'.\'Inflation\' as driver.

3.R&D Personnel Cost

Same logic as 1 with nodes:
\'Base Data\'.\'Base Data R&D\'
\'Drivers\'.\'R&D Personnel Split\'
\'Drivers\'.\'Merit Increase\'

4.R&D Non-Personnel Cost

Sames logic as 2. with nodes:
\'Drivers\'.\'R&D Personnel Split\'
\'Base Data\'.\'Base Data R&D\'
\'Drivers\'.\'Inflation\'

5.G&A Personnel Cost

Same as 1. with nodes:
\'Base Data\'.\'Base Data G&A\'
\'Drivers\'.\'G&A Personnel Split\'
\'Drivers\'.\'Merit Increase\'

6.G&A Non-Personnel Cost

Same as 2. with nodes:
\'Drivers\'.\'G&A Personnel Split\'
\'Base Data\'.\'Base Data G&A\'
\'Drivers\'.\'Inflation\'

Solution



Nr.Nodefx
1.M&S Personnel CostROLLFORWARD(-1 * \'Base Data\'.\'Base Data M&S\' * \'Drivers\'.\'M&S Personnel Split\',\'Drivers\'.\'Merit Increase\')
2.M&S Non-Personnel CostROLLFORWARD(-1 * \'Base Data\'.\'Base Data M&S\' * ADDEACH(\'Drivers\'.\'M&S Personnel Split\'*-1,1),\'Drivers\'.\'Inflation\')
3.R&D Personnel CostROLLFORWARD(-1 * \'Base Data\'.\'Base Data R&D\' * \'Drivers\'.\'R&D Personnel Split\',\'Drivers\'.\'Merit Increase\')
4.R&D Non-Personnel CostROLLFORWARD(-1 * \'Base Data\'.\'Base Data R&D\' * ADDEACH(\'Drivers\'.\'R&D Personnel Split\'*-1,1),\'Drivers\'.\'Inflation\')
5.G&A Personnel CostROLLFORWARD(-1 * \'Base Data\'.\'Base Data G&A\'*\'Drivers\'.\'G&A Personnel Split\',\'Drivers\'.\'Merit Increase\')
6.G&A Non-Personnel CostROLLFORWARD(-1 * \'Base Data\'.\'Base Data G&A\' * ADDEACH(\'Drivers\'.\'G&A Personnel Split\'*-1,1),\'Drivers\'.\'Inflation\')


If entered correctly, your model should look somewhat like this:


Next Step

Now that you have created all five sub-models you should have a fully functional Profit model for a multinational diversified enterprise covering all three important areas (Product, Services, Operating Expenses). Let\'s combine it quickly into a final profit and loss model in P&L which won\'t take you more than 3 minutes. 

Next Page

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