Tagged: fixed %
- October 2, 2018 at 4:14 pm #705
On the O/R/I Operating Statement tab, I noticed that there is a fixed% column. Can you explain what this factor means or is adjusting for?
- October 2, 2018 at 4:15 pm #706
The Fixed % assumption refers to what percentage of that particular other income or expense assumption is fixed vs variable relative to occupancy.
So for instance, if a $1,000 expense item is 100% fixed and occupancy is 0%, the model would assume $1,000 for that period. If the item is 0% fixed, the model would assume $0 for that period.
The calculation looks something like this:
Cash Flow in a Given Period = (% Fixed x Amount ) + ((1 – % Fixed) x Amount x Occupancy %)
The idea behind the Fixed % concept is that certain other income and expense items are impacted by occupancy. Storage Income for instance would drop if occupancy dropped in an apartment building, just like cleaning expenses would drop if occupancy dropped in an office building. Thus, the Fixed % assumption allows you to account for the impact occupancy has on those types of other income and expense items.
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