Financial Modeling Topics

Topics related to general financial modeling including standalone projection modeling and nuances & clarifications

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Last 10 posts

Depreciation Schedule
Hello, I am having difficult completing the deprecation schedule from the template. Do we assume a useful life for buildings and machinery/equipment to calculate the weighted average useful life of gross PPE? I'm not sure how % accumulated depreciation metric is incorporated or how gross % breakdow... Read More
Go to post added 2 months ago
Adv LBO Modeling TL Logic
Hello, I'm currently looking at the super advanced LBO model and I'm trying to understand the logic on the Term Loan Borrowing / Paydown line. Can you please explain what the formula is about? How can you draw on a TL? The formula looks very similar to a Revolver Borrowing / Paydown line. Your el... Read More
Go to post added 4 months ago
Historical Cash & Equivalent Reconciliation
Hi WST, I have a somehow stupid question. I realized that we only make projection in the cash flow statement without bothering with the historical cash flow items. I kind of tried to use the same approach in cash flow statement to calculate the historical Cash & Equivalent to see if they would mat... Read More
Go to post added 9 months ago
Intangible Asset Amortization
Hi WST, I am trying to build a more detail projection by including amortization of intangible asset amortization; instead of grouping it with depreciation and deducting it from PP&E with depreciation. Now, I am running into a scenario where the company does not break out the depreciation and amor... Read More
Go to post added 10 months ago
Over Estimating Depreciation
Hi WST, Quick question: if we can't have the residual value of a company's depreciate assets; does that mean we could very well over estimate the depreciation expense? Ex. A company has $1000 of machinery and Equipment at the beginning of the period and with 3 years of life. However, without kno... Read More
Go to post added 10 months ago
Trump's Tax Law - Interest Expense deduction limit?
How does one account for the updated Interest Expense deduction limit in financial models?
Go to post added 2 years ago
Convertible Bonds
I am building a projection model and at the stage of building the debt schedule. Now, I have a situation where the company has convertible bond (CB) being classified on its balance sheet into liability portion and equity portion. Now, I am a bit confused. EX, the company raised $1,000 of CB, incl... Read More
Go to post added 3 years ago
Re: Excel Formula of running a scenario analysis
I'm now at the end of the DCF model and I'm about to run a scenario analysis with changes of some variables, e.g. dividend payout ratio and beta. So if I want to set up a table with different combinations of these two variables, is there any excel formula that I can use to fill in the intrisic value... Read More
Go to post added 3 years ago
DCF modeling in an M&A situation
I’m doing a DCF model for a deal, a briefing of the case is as followed: 1. The listed company acquired company A for 39% shares in 2016, therefore there is a profit of associate in 2016. 2. The listed company acquired the rest 61% shares of company A in 2017, the consolidation date is 31/8/20... Read More
Go to post added 3 years ago
Waterfall distribution IRR
I have recently came across a GP structure where the 2nd level waterfall distribution is based on XIRR. But it specifically states that the XIRR is not compounded. I thought inherent in the XIRR calculation is compounding effect. How to build a model that satisfies the non-compounding XIRR?
Go to post added 3 years ago