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R&D Expense and Capital
Hi WST, I am analyzing an ODM TECHNOLOGY company and trying to build an integrated projection. From reviewing its financial reports, it has, say, $8m of R&D expenses on the income statement and $12m of investment cash outflow of Product Development; it also has an intangible asset account for P... Read More
Hi WST, I am analyzing an ODM TECHNOLOGY company and trying to build an integrated projection. From reviewing its financial reports, it has, say, $8m of R&D expenses on the income statement and $12m of investment cash outflow of Product Development; it also has an intangible asset account for P... Read More
Re: R&D Expense and Capital
Based on the wording you provided and accounting rules (which are ever changing especially with IFRS differences), it seems as if the $8MM on the IS relates to current period R&D. Whereas the $12MM (presumably in CFI) is capitalized, of which, only a PORTION of that constitutes the $8MM expensed... Read More
Based on the wording you provided and accounting rules (which are ever changing especially with IFRS differences), it seems as if the $8MM on the IS relates to current period R&D. Whereas the $12MM (presumably in CFI) is capitalized, of which, only a PORTION of that constitutes the $8MM expensed... Read More
Re: R&D Expense and Capital
Got it. Just did the projection. What I did was taking a % of total sales as R&D expenditure and split that into R&D expenses and the rest as cash outflow for investing activities and capitalize the cash outflow on the balance sheet. No surprise the operating profit margin dropped but I t... Read More
Got it. Just did the projection. What I did was taking a % of total sales as R&D expenditure and split that into R&D expenses and the rest as cash outflow for investing activities and capitalize the cash outflow on the balance sheet. No surprise the operating profit margin dropped but I t... Read More
Re: R&D Expense and Capital
projecting R&D expenditure as % of total sales sounds legit to us. but how did you justify the % split you used for expense vs capitalize portion? that is pretty important. AND then don't forget, you need to expense the capitalized portion. keep in mind, if the company is at run-rate (doesn't ... Read More
projecting R&D expenditure as % of total sales sounds legit to us. but how did you justify the % split you used for expense vs capitalize portion? that is pretty important. AND then don't forget, you need to expense the capitalized portion. keep in mind, if the company is at run-rate (doesn't ... Read More
Re: R&D Expense and Capital
yep... got to amortize them.... (almost forgot...)
yep... got to amortize them.... (almost forgot...)
Re: Problem with choose and average formulas
At the risk of not answering your question, please re-direct yourself to our circular reference module, including with your online access login. Alternately, go to our youtube channel: www.youtube.com/wstss and do a sea... Read More
At the risk of not answering your question, please re-direct yourself to our circular reference module, including with your online access login. Alternately, go to our youtube channel: www.youtube.com/wstss and do a sea... Read More
Re: att and t-mobile deal
All your questions are addressed in our M&A Deal Structuring course. please go to: www.wstselfstudy.com and click on Courses & Programs. Short Answer to your question: 1) AT&T is going to pay $25B in cash (ca... Read More
All your questions are addressed in our M&A Deal Structuring course. please go to: www.wstselfstudy.com and click on Courses & Programs. Short Answer to your question: 1) AT&T is going to pay $25B in cash (ca... Read More
Re: WACC of a private company?
If BOTH the target company AND the industry have little to no debt, then it's hard to make a case that debt is a big part of the capital structure. As such, go with the actual or the industry (round to 5%). Also, WACC is as of a point in time. Since your DCF value is as of a point in time as well,... Read More
If BOTH the target company AND the industry have little to no debt, then it's hard to make a case that debt is a big part of the capital structure. As such, go with the actual or the industry (round to 5%). Also, WACC is as of a point in time. Since your DCF value is as of a point in time as well,... Read More
CLOSING aDJUSTMENT
Hello, I had done a valuation for a buy-side transaction based on discounting free cash flows to firm. Now, five months later we are trying to close the transaction. However, many things have changed in the company including cash balance, debt level, and working capital. Also, during this period o... Read More
Hello, I had done a valuation for a buy-side transaction based on discounting free cash flows to firm. Now, five months later we are trying to close the transaction. However, many things have changed in the company including cash balance, debt level, and working capital. Also, during this period o... Read More
Correct - this is a pro forma adjustment.
However, future depreciation and debt paydown should be incorporated in your projections (again, not in historicals).