Forum Search: technical analysis
RE: Complex Trading Comps Analysis: COST Inputs
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... 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... Read More
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
1) We use marginal tax rate b/c any additional new income is taxed at that (usually) higher rate rather than effective rate. If there is a progressive tax system in place or other tax credits that reduce (or increase) the tax rate, you don't want that distortion in there. 2) It depends on what co... 1) We use marginal tax rate b/c any additional new income is taxed at that (usually) higher rate rather than effective rate. If there is a progressive tax system in place or other tax credits that reduce (or increase) the tax rate, you don't want that distortion in there.
2) It depends on what context your Total Debt is calculated as. For WACC, definitely include WACC and yes of course Preferred is definitely leverage b/c it is a source of capital other than equity. For credit analysis, there is partial equity treatment of preferred depending on the specific terms.
3) When Depreciation is the same as IS/CF, it doesn't matter. However, keep in mind, depreciation can be classified as either COGS or SG&A and to be safe, use the actual cash number (from CF) not from IS as the IS reflects accounting not true cash figure.
4) You have discretion to reclassfiy as you please. In our Basic Financial Modeling online video course modeling out HRH, we reclassified something in Revenue to below EBIT. As long as you are consistent and as you pointed out, make sure your ratios are correct. Problem is, each company (or rather, sector) is different. Read More