Forum Search: capital markets
Re: Calculating Free Cash Flow for a business unit
Assuming I can allocate depreciation and capex, how do I calculate change in working capital for the business unit?
Assuming I can allocate depreciation and capex, how do I calculate change in working capital for the business unit?
Re: WACC for private company
A private company certainly has a cost of equity - it just requires a bit more work to quantify via CAPM given there is no public stock information. All forms of capital must be incorporated in WACC analysis. Usually the question is if a private company has no debt, is WACC simply its cost of equity... Read More
A private company certainly has a cost of equity - it just requires a bit more work to quantify via CAPM given there is no public stock information. All forms of capital must be incorporated in WACC analysis. Usually the question is if a private company has no debt, is WACC simply its cost of equity... Read More
Re: Capital and Operating Leases
In short, we do not want you to include leases (both capital and operating leases) in your TEV calculation. Thus, in theory one would actually want to adjust out capital leases from debt figures on the BS. For a full robust discussion of this, please refer to our Private Company Valuation course (wh... Read More
In short, we do not want you to include leases (both capital and operating leases) in your TEV calculation. Thus, in theory one would actually want to adjust out capital leases from debt figures on the BS. For a full robust discussion of this, please refer to our Private Company Valuation course (wh... Read More
Re: Unlevered Free Cash flows vs. Tax Effected Ebit as starting point for Gordon Growth Method
Actually this is covered in our Corporate Valuation course. In short, the run-rate, normalized FCFF figure is Tax-Effected EBIT because in the long run, depreciation and CapEx cancel out for a slow growth, mature, cash cow business. If the company doesn't fit that profile then, perpetuity growth met... Read More
Actually this is covered in our Corporate Valuation course. In short, the run-rate, normalized FCFF figure is Tax-Effected EBIT because in the long run, depreciation and CapEx cancel out for a slow growth, mature, cash cow business. If the company doesn't fit that profile then, perpetuity growth met... Read More
Implied statement of cash flows vs. actual statement of cash flows
In your class, we entered the historical income statement and balance sheet and then solved for the statement of cash flows. When I've tried this on my own, I've found that my working capital and CFI numbers differ significantly from items found in the company's reported statement of cash flows and ... Read More
In your class, we entered the historical income statement and balance sheet and then solved for the statement of cash flows. When I've tried this on my own, I've found that my working capital and CFI numbers differ significantly from items found in the company's reported statement of cash flows and ... Read More
Re: Macros not installing properly
Please make sure you don't have conflicting macros, such as FactSet or Capital IQ installed. You would have to navigate to their ribbon menu option, then hit Settings. For FactSet, select HotKey Manager (or something to that effect) and select Disable All (or similar). For CapIQ, select Shortcuts on... Read More
Please make sure you don't have conflicting macros, such as FactSet or Capital IQ installed. You would have to navigate to their ribbon menu option, then hit Settings. For FactSet, select HotKey Manager (or something to that effect) and select Disable All (or similar). For CapIQ, select Shortcuts on... Read More
Re: Cash requirement
In an M&A deal, the minimum working capital requirement is similar to the min cash concept, but in practice, it makes it to the purchase agreements as a purchase price allocation. Making an estimate for it depends on the type of company it is. I.e. Manufacturing vs. services based. If services based... Read More
In an M&A deal, the minimum working capital requirement is similar to the min cash concept, but in practice, it makes it to the purchase agreements as a purchase price allocation. Making an estimate for it depends on the type of company it is. I.e. Manufacturing vs. services based. If services based... Read More
Cash requirement
For my job, I'm recently working on an US M&A transaction and come up with some practical questions, while I'd appreciate if you can provide me some insight. The vendor plan to distribute all of its excess cash before the closing, however, the managemnet is yet to provide us a cash requirement le... Read More
For my job, I'm recently working on an US M&A transaction and come up with some practical questions, while I'd appreciate if you can provide me some insight. The vendor plan to distribute all of its excess cash before the closing, however, the managemnet is yet to provide us a cash requirement le... Read More
Re: Selling Receivables
Generally, A/R is not considered capital structure so no change to TEV. However, as you noted, the change arises due to the increase in Cash balance since you sold the A/R and got cash. This in turn lowers your Net Debt (cash is higher) and affects TEV. To get a true apples to apples comparison, ... Read More
Generally, A/R is not considered capital structure so no change to TEV. However, as you noted, the change arises due to the increase in Cash balance since you sold the A/R and got cash. This in turn lowers your Net Debt (cash is higher) and affects TEV. To get a true apples to apples comparison, ... Read More
How do I estimate changes in working capital if I can estimate the allocation for depreciation and capex?