Forum Search: capital markets
RE: Incorporating maintenance capex into free cash flow calc
I think you've mixed up too many academic theories and practical application. Usually, the capex number includes maintenance capex. this is the same total capex number from the cash flow from investing line as well as capex in the FCFF calculation. this makes buffett's point about FCF including an a... Read More
I think you've mixed up too many academic theories and practical application. Usually, the capex number includes maintenance capex. this is the same total capex number from the cash flow from investing line as well as capex in the FCFF calculation. this makes buffett's point about FCF including an a... Read More
RE: Tax-effected EBIT vs EBITDA for DCF terminal value
In a DCF, for the perpetuity growth rate method of calculating terminal value, CF*(1+g)/(r-g), what would be the proper term for "CF"? One should not use EBITDA since it is merely a proxy for cash flow and does not properly estimate Free Cash Flow to Firm. EBITDA rightfully is before the effects of ... Read More
In a DCF, for the perpetuity growth rate method of calculating terminal value, CF*(1+g)/(r-g), what would be the proper term for "CF"? One should not use EBITDA since it is merely a proxy for cash flow and does not properly estimate Free Cash Flow to Firm. EBITDA rightfully is before the effects of ... Read More
RE: Please clarify if any value is gained by buying back stock-2
You have to remember the core lessons from my valuation class! If nothing else has happened to the company, why should there be a change to the value of the company (enterprise value)? If the "core, recurring profitability from core operations" has not changed, there is no change to TEV. Capital str... Read More
You have to remember the core lessons from my valuation class! If nothing else has happened to the company, why should there be a change to the value of the company (enterprise value)? If the "core, recurring profitability from core operations" has not changed, there is no change to TEV. Capital str... Read More
RE: Modeling out pension expenses on the cash flow statement
Recall that pension expense is technically included in Compensation (usually part of SG&A). That does not necessarily mean they physically paid cash for that expense in that time period (matching principle of expenses, subset of accrual accounting). Therefore, the contribution to pension would b... Read More
Recall that pension expense is technically included in Compensation (usually part of SG&A). That does not necessarily mean they physically paid cash for that expense in that time period (matching principle of expenses, subset of accrual accounting). Therefore, the contribution to pension would b... Read More
RE: Inputting scheduled lease payments in the debt sweep
We would decrease capital lease on the balance sheet and put that in the cash flow statement just like working capital. In theory you have to account for imputed interest and depreciation.
We would decrease capital lease on the balance sheet and put that in the cash flow statement just like working capital. In theory you have to account for imputed interest and depreciation.
RE: Forecasting working capital off future quarters' sales?
Your logic isn't a bad one - to base days outstanding off future forecasted quarterly sales. However, you will find that if you do that, you will create circular references. Any difference between using same quarter vs future quarter sales will be minimal unless you are a huge growth company. The ad... Read More
Your logic isn't a bad one - to base days outstanding off future forecasted quarterly sales. However, you will find that if you do that, you will create circular references. Any difference between using same quarter vs future quarter sales will be minimal unless you are a huge growth company. The ad... Read More
RE: LBO Deal Structuring and Capital Lease Treatment Discussions
QUESTION: RE: LBO modeling: when a company you’re analyzing in order to do an LBO has capital leases on its balance sheet, what’s the proper way to reflect that in the sources and uses? That is: let’s assume they have $20mm of capital leases on the balance sheet right now (IE pre transacti... Read More
QUESTION: RE: LBO modeling: when a company you’re analyzing in order to do an LBO has capital leases on its balance sheet, what’s the proper way to reflect that in the sources and uses? That is: let’s assume they have $20mm of capital leases on the balance sheet right now (IE pre transacti... Read More
RE: Modeling out pension expenses on the cash flow statement
Thanks. The company have an item in the working capital section of the CF statement "payment to Pension Fund" of negative GBP100m.
Thanks. The company have an item in the working capital section of the CF statement "payment to Pension Fund" of negative GBP100m.
Treatment of Revolver as Debt for TEV
I wanted to ask your view on a discussion we had here at the firm. The topic was how to calculate the Net Debt of a company for the purpose of subtracting it to the enterprise value and getting to a purchase price. The firm is a small growing company with approximately 1.6m in Accounts Receivabl... Read More
I wanted to ask your view on a discussion we had here at the firm. The topic was how to calculate the Net Debt of a company for the purpose of subtracting it to the enterprise value and getting to a purchase price. The firm is a small growing company with approximately 1.6m in Accounts Receivabl... Read More
Normally, per our instructions in the video, one would back out capital leases from the debt; however, because Costco's 10Q did not supply a full debt footnote in which we could have extracted such capital leases figures, we cannot just "make it up". One could argue to get it from Costco's 10K which... Normally, per our instructions in the video, one would back out capital leases from the debt; however, because Costco's 10Q did not supply a full debt footnote in which we could have extracted such capital leases figures, we cannot just "make it up". One could argue to get it from Costco's 10K which might approximate the capital leases figure from 6 months prior (or 3 or 9 months prior depending on which 10Q), however, it is a worse sin to mix and match numbers from different time periods. Read More