Mapping Variable Types
This article explains how to map imported rows to variable types in Model Reef and what each choice means for the behaviour of your model.
You will learn:
What each variable type represents.
How type affects P&L, Balance Sheet and Cashflow.
How to map common line items from financial statements.
How to fix type mistakes after import.
Why variable type mapping matters
Variable type is one of the most important settings in Model Reef. It tells the engine:
Whether a row is revenue, cost, asset, liability, tax, equity or a dividend.
Which parts of the statements it should affect.
How timing and cash behaviour should be applied.
How it should be treated in the Cashflow Waterfall and valuation.
If you map a line to the wrong type, your statements may still balance, but the interpretation will be wrong.
Available variable types
The core variable types are:
Revenue
Increases the revenue line in P&L.
Contributes to gross profit.
Creates receivables when delayed.
COGS (Cost of Goods Sold)
Direct costs associated with revenue.
Reduce gross profit.
Create payables when delayed.
Opex (Operating Expenses)
Indirect operating costs below gross profit.
Reduce EBITDA.
Create payables when delayed.
Staff
Staff related costs including salaries, super, and payroll taxes.
Appear as operating expenses in P&L.
Can create staff related payables.
Tax
Tax expense and payables.
Applied on earnings before tax.
Affects both P&L and Balance Sheet.
Asset
Fixed or long lived assets.
Appear on the Balance Sheet and depreciate over time.
Cash outflows are treated as capex.
Liability
Loans and similar obligations.
Carry interest and principal repayment profiles.
Affect both Balance Sheet and Cashflow Statement.
Equity
Capital injections from owners.
Increase equity and cash.
Treated as financing inflows in Cashflow.
Dividend
Payments to owners out of retained earnings.
Reduce equity and cash.
Appear as financing outflows in Cashflow.
In some models you may also use neutral or custom types for non financial drivers, but the core types above drive the statements.
Mapping lines from a P&L
Typical mappings from an imported P&L:
Revenue,Sales,Turnover-> Revenue.Cost of goods sold,Cost of sales-> COGS.Selling expenses,Marketing,Administrative expenses-> Opex.Staff costs,Wages and salaries,Employee benefits-> Staff (recommended, for richer staff modelling).Depreciation-> Usually derived from Asset variables instead of imported as a separate line, but you can initially map as Opex and later refine.Interest expense-> Usually derived from Liability variables, but can be imported as Opex or Liability driven costs.
Where possible, prefer modelling assets and loans directly so that depreciation and interest are generated rather than imported as static lines.
Mapping lines from a Balance Sheet
Typical mappings from an imported Balance Sheet:
Cash and cash equivalents-> usually derived from the Cashflow Statement, not imported as a variable.Trade and other receivables-> usually derived from revenue timing, not imported, unless you are setting opening balances.Inventory-> can be modelled as an Asset or kept out of scope initially.Property, plant and equipment-> Asset, often with opening balances then capex and depreciation logic.Trade and other payables-> usually derived from timing on COGS and Opex.Loans and borrowings-> Liability.Share capital-> Equity, often imported as an opening balance.Retained earnings-> usually a calculated line based on profit and dividends, not imported as a variable after the initial state.
During initial import you may use several Asset, Liability and Equity variables to set opening balances, then rely on modelled flows going forward.
Fixing type mapping mistakes
If you realise after import that a line has been mapped to the wrong type, follow these steps:
Save and review
Save and review the statements. The engine will recalculate the P&L, Balance Sheet and Cashflow based on the new type.
Be cautious when changing types for variables that also have complex timing, loan behaviour or asset depreciation. For those, it may be cleaner to recreate them using the correct type specific templates.
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