Forum Search: technical analysis
RE: Accounting changes
First of all, Changes in Accounting Principles that are below Net Income or Income from Continuing Operations never get touched. Second, again, use judgement - will this occur again in the future? For instance, don't make adjustments for SBC - Stock Based Compensation b/c that is a new pronouncem... Read More
First of all, Changes in Accounting Principles that are below Net Income or Income from Continuing Operations never get touched. Second, again, use judgement - will this occur again in the future? For instance, don't make adjustments for SBC - Stock Based Compensation b/c that is a new pronouncem... Read More
RE: Multiples & WACC class
1) To be technical, correct, the Debt figures for WACC should NOT include MI. Your logic in your question is 100% dead on. Honestly, we got lazy. 2) They really should match - however, the best practice is actually to just use 40% for beta as well - you'll see that on most of Wall Street's models... Read More
1) To be technical, correct, the Debt figures for WACC should NOT include MI. Your logic in your question is 100% dead on. Honestly, we got lazy. 2) They really should match - however, the best practice is actually to just use 40% for beta as well - you'll see that on most of Wall Street's models... Read More
RE: Complex Trading Comps Analysis: COST Inputs
Hi, two follow up questions here: (3). Sorry, but I was expecting an explanation of WST as I always have had here since I started the courses. Again, I have watched the videos and this specific point I'm asking you was not covered explicitly. So, could you please review my question and address th... Read More
Hi, two follow up questions here: (3). Sorry, but I was expecting an explanation of WST as I always have had here since I started the courses. Again, I have watched the videos and this specific point I'm asking you was not covered explicitly. So, could you please review my question and address th... Read More
RE: Complex Trading Comps Analysis: COST Inputs
3) Compare Face Value vs Mkt Value, correct. However, we believe we did explain in the video that if Face Value is very close to Mkt Value but still greater, we might decide to convert. The Face is $571, the Mkt Value if converted of stock, is $513, off by OVER 10%. We don't want to establish a thre... Read More
3) Compare Face Value vs Mkt Value, correct. However, we believe we did explain in the video that if Face Value is very close to Mkt Value but still greater, we might decide to convert. The Face is $571, the Mkt Value if converted of stock, is $513, off by OVER 10%. We don't want to establish a thre... Read More
Re: Goodwill and Minority Interest for less than 100%
Who owns the remaining 20%? Is it still publicly traded? Assuming that Co. B is a subsidiary of Co. A, then Minority Interest is generally calculated as 20% (the percentage A does NOT own of B) of Co. B's book value. You would show 100% of the Goodwill created (since you have to consolidate everythi... Read More
Who owns the remaining 20%? Is it still publicly traded? Assuming that Co. B is a subsidiary of Co. A, then Minority Interest is generally calculated as 20% (the percentage A does NOT own of B) of Co. B's book value. You would show 100% of the Goodwill created (since you have to consolidate everythi... Read More
Array formula
I attended your Excel Advanced course on the last day of the Financial Analysis Series (7 Nov 08) There is an array formula which I tried to replicate but have problem. I have a series of monthly returns in % and would like to multiply by 0.5 instead of adding 1 to the array range T11:T32. But the ... Read More
I attended your Excel Advanced course on the last day of the Financial Analysis Series (7 Nov 08) There is an array formula which I tried to replicate but have problem. I have a series of monthly returns in % and would like to multiply by 0.5 instead of adding 1 to the array range T11:T32. But the ... Read More
Questions on basic Accretion/Dilution model
1. Goodwill: since GW is not amortised whatever the case I was a little confused that you use the terminology of GW amortisation. The US 338 election may allow a tax credit amortisation but I remain confused here slightly. If there is no GW amortisation allowed anywhere in the world then you should ... Read More
1. Goodwill: since GW is not amortised whatever the case I was a little confused that you use the terminology of GW amortisation. The US 338 election may allow a tax credit amortisation but I remain confused here slightly. If there is no GW amortisation allowed anywhere in the world then you should ... Read More
Re: Questions on basic Accretion/Dilution model
We still call it GW amortization in our model because the calculation is GW, not the entire purchase price. In our M&A Deal Structuring course, we give the example of a $200 asset. A common mistake is to depreciation the $200 but since you are adding Target Net Income in the simple accretion dil... Read More
We still call it GW amortization in our model because the calculation is GW, not the entire purchase price. In our M&A Deal Structuring course, we give the example of a $200 asset. A common mistake is to depreciation the $200 but since you are adding Target Net Income in the simple accretion dil... Read More
Ability to Pay Analysis
- the Net Income of $10m is the Target company Net Income? Not sure here since Change in NI assumes NIL accretion/dilution at break even PE, right? If so then it would be NI of Target & Acquiror since accretion/dilution is calculated on the new NI? Confused here - If it is Target NI then why is ... Read More
- the Net Income of $10m is the Target company Net Income? Not sure here since Change in NI assumes NIL accretion/dilution at break even PE, right? If so then it would be NI of Target & Acquiror since accretion/dilution is calculated on the new NI? Confused here - If it is Target NI then why is ... Read More
1) You helped our argument for us - because this is subjective, you CANNOT introduce (well we'll try not to introduce) subjectivity. Who is to argue what direction the stock price will take? WMT's stock price was in a $45-$50 band for 8 years, so who's to say that suddenly COST or anyone's stock pri... 1) You helped our argument for us - because this is subjective, you CANNOT introduce (well we'll try not to introduce) subjectivity. Who is to argue what direction the stock price will take? WMT's stock price was in a $45-$50 band for 8 years, so who's to say that suddenly COST or anyone's stock price HAS to go up in 11 years? Thus a rationale investor WILL NOT convert if the convert deadline was tomorrow or next week b/c they can hold onto the converts and get the full par value back. So then who's to decide a week is long enough for the stock price to go up 15% or whatever the breakeven par value is based on the stock price as of the analysis? Then this wonderful current so-called recession hits and COST drops 20% in one day. That's subjectivity - b/c there is no guideline or rather, investors have different risk tolerances and thus, you cannot make a decision (rather, we'd like you not to) based on something that is different for everyone.
2) These happen to be zero-coupon, heavily discounted converts which further complicates the issue. Normally, if these are just regular (as in interest paying) converts, then you are correct to the above question - convert! but they aren't and they can convert to a higher amount in the future.
3) Do exactly what we outlined in the videos - we don't want to repeat it here again.
4) Do exactly what we outlined in the videos - we don't want to repeat it here again.
5) Book value of Equit yshould be increased by the market value of the equivalent number of shares x current stock price b/c that is the ACTUAL amount of capital.
6) Nope, doesn't apply here. Good analogy though! It doesn't apply b/c the options don't have a future value attached to them the way the Zero-Coupon converts do (see above answers). Read More