Introduction & Objectives
The Borrowing Capacity User Model (Capacity)
is an Excel-based business planning tool that will be available free of
charge to all registered social landlords and National Housing Federation
members. This section sets out its purpose and logic and gives brief guidance
on its completion.
The detailed specification for the model was provided by a steering committee
representing the Housing Corporation, the National Housing Federation
and a number of individual housing associations of varying sizes.
The objectives were defined as follows:
- To facilitate widespread good practice business planning throughout the sector by simplifying the application of the methodology developed in the Do you have the capacity? report.
- To equip the Federation with better tools for sector financial analysis in order to negotiate and inform key bodies on behalf of its members.
- To provide associations with a model which will enable them to meet Housing Corporation expectations on the provision of information when they are bidding for capital grant (see note).
- To produce an FV5 return for the Corporation
Note: The third objective has subsequently
been clarified by the Corporation as relating to those associations bidding
for ADP partnership status.
The output from the model will include, as well as the projected financial
statements,
- a Financial Profile of selected ratios as developed for “Measuring Up” and recent Global Accounts
- Profitability, Cash Flow, Credit and Capacity Maps developed from those used in “Measuring Up” and Global Accounts
- a new selection of ratio charts and graphs to illustrate 30-year trends in key ratios
- forward-looking measures of capacity based on 30-year cash flows, as developed in "Do you have the capacity?", as well as more traditional measures of capacity.
| Logic of the Model >> |