Forum Search: capital markets
PEP Preferred Equity
Finally, PEP had Preferred Equity line items that the answer key did not include in Debt or Equity (even for the purpose of the Capitalization Ratio), so just wanted to confirm that that, for the purposes of these exercises, we do not need to worry about Preferred Equity (I realize it was basically ... Read More
Finally, PEP had Preferred Equity line items that the answer key did not include in Debt or Equity (even for the purpose of the Capitalization Ratio), so just wanted to confirm that that, for the purposes of these exercises, we do not need to worry about Preferred Equity (I realize it was basically ... Read More
Re: Costco Interest Expense
As a general statement, subtracting interest income from interest expense is typically referred to as "net interest expense." That said, for the purposes of these coverage ratios, it's better to use gross interest expense (i.e., disregard interest income). In practice, this often requires diggin... Read More
As a general statement, subtracting interest income from interest expense is typically referred to as "net interest expense." That said, for the purposes of these coverage ratios, it's better to use gross interest expense (i.e., disregard interest income). In practice, this often requires diggin... Read More
Re: valuation for Balance Sheet based company like banks and insurance
Unlike more traditionally structured companies, banks and insurance carriers do not adhere to the concept of TEV. For example, cash in most businesses is relatively straightforward. But for a bank, cash is both COGS *and* Revenue, in different forms. So the concepts of cash and debt no longer apply ... Read More
Unlike more traditionally structured companies, banks and insurance carriers do not adhere to the concept of TEV. For example, cash in most businesses is relatively straightforward. But for a bank, cash is both COGS *and* Revenue, in different forms. So the concepts of cash and debt no longer apply ... Read More
Re: CapitalIQ Shortcuts Override
If you'd like to use the WST Macros keyboard shortcuts while using other add-ins at the same time, we'd recommend disabling their shortcut functionality. You can usually find this in their settings menu. Please see the free guide on our website under About -> Resources -> Technical Resources -> "How... Read More
If you'd like to use the WST Macros keyboard shortcuts while using other add-ins at the same time, we'd recommend disabling their shortcut functionality. You can usually find this in their settings menu. Please see the free guide on our website under About -> Resources -> Technical Resources -> "How... Read More
Re: Historical Cash & Equivalent Reconciliation
Hello, If you have your quarterly IS and BS projections, then the CF should be easy as long as you are using the indirect method of cash flow construction. Recall that the CF starts with NI, adds D&A and changes in working capital, the latter being derived from BS changes quarter to quarter. CapE... Read More
Hello, If you have your quarterly IS and BS projections, then the CF should be easy as long as you are using the indirect method of cash flow construction. Recall that the CF starts with NI, adds D&A and changes in working capital, the latter being derived from BS changes quarter to quarter. CapE... Read More
Re: DCF Correct Time Period inputs
Many thanks for such quick reply. So let me just clarify that the correct way is taking the latest released financials (2018 Q3) to calculate net debt and capitalization figures for the WACC; and for DCF I should discount the 2018 Q4 (the last remaining 2018 project quarter) plus 2019-2022 FCFF plu... Read More
Many thanks for such quick reply. So let me just clarify that the correct way is taking the latest released financials (2018 Q3) to calculate net debt and capitalization figures for the WACC; and for DCF I should discount the 2018 Q4 (the last remaining 2018 project quarter) plus 2019-2022 FCFF plu... Read More
Re: DCF Correct Time Period inputs
Hello there, not a silly question at all! If you have latest financials, in this case through 2018 Q3, we would highly recommend doing a stub period, that is the one remaining quarter of 2018 + four (or five) more full projection years. Then we should definitely use net debt and capitalization fi... Read More
Hello there, not a silly question at all! If you have latest financials, in this case through 2018 Q3, we would highly recommend doing a stub period, that is the one remaining quarter of 2018 + four (or five) more full projection years. Then we should definitely use net debt and capitalization fi... Read More
DCF Correct Time Period inputs
Hi WST, I have a not so smart question, let's say I am making a 5 year projection (2018-2022) for DCF analysis to calculate a company's implied stock price. Now, the company just releases its latest financial statements. So should I use the latest financial figures to calculate, say, net debt, an... Read More
Hi WST, I have a not so smart question, let's say I am making a 5 year projection (2018-2022) for DCF analysis to calculate a company's implied stock price. Now, the company just releases its latest financial statements. So should I use the latest financial figures to calculate, say, net debt, an... Read More
Re: shareholder loan
Thank you! 1. Shareholder loan vs shareholder advances - am I right to say that the loan here is debt vs advances can be equity/debt like you said? Both are a form capital injection but only shareholder advance increases shareholder's equity on the balance sheet vs shareholder loan is treated as ... Read More
Thank you! 1. Shareholder loan vs shareholder advances - am I right to say that the loan here is debt vs advances can be equity/debt like you said? Both are a form capital injection but only shareholder advance increases shareholder's equity on the balance sheet vs shareholder loan is treated as ... Read More
Most definitely, Other Liabilities or Other Long Term Liabilities are NOT considered part of Debt for capital structure and TEV purposes (covered more in Corporate Valuation course). On the quiz, this was indeed a mistake (another great observation!) and therefore for the exam version, do not includ... Most definitely, Other Liabilities or Other Long Term Liabilities are NOT considered part of Debt for capital structure and TEV purposes (covered more in Corporate Valuation course). On the quiz, this was indeed a mistake (another great observation!) and therefore for the exam version, do not include those items as part of debt. Read More