Forum Search: technical analysis
How do I simplify sensitivity analysis in a financial model?
Full Question: we are constantly setting up models and running different case scenarios based on variable inputs we create in our models. Often times we need to summarize these cases onto one table and because the models are complex and we change more than one variable at a time it sometimes means ... Read More
Full Question: we are constantly setting up models and running different case scenarios based on variable inputs we create in our models. Often times we need to summarize these cases onto one table and because the models are complex and we change more than one variable at a time it sometimes means ... Read More
What if discretionary debt sweep is positive?
Full Question: In calculating Discretionary Sweep for WMT, the formula had: -Min(Beginning Balance Revolver, Cash Flow before Discretionary Debt Repayment). In this case, Cash Flow before Discretionary Debt Repayment was negative and hence Discretionary Sweep became a positive number. I just com... Read More
Full Question: In calculating Discretionary Sweep for WMT, the formula had: -Min(Beginning Balance Revolver, Cash Flow before Discretionary Debt Repayment). In this case, Cash Flow before Discretionary Debt Repayment was negative and hence Discretionary Sweep became a positive number. I just com... Read More
How to calculate / estimate transaction costs for an LBO?
Full Question: I am doing a LBO analysis of a small retailing company. The transaction EV is about $350 million and new equity is $100 (my number). What is the appropriate transaction cost for this analysis? You mentioned that the M&A fee was around 1-2% of TEV. But I am not sure about the lega... Read More
Full Question: I am doing a LBO analysis of a small retailing company. The transaction EV is about $350 million and new equity is $100 (my number). What is the appropriate transaction cost for this analysis? You mentioned that the M&A fee was around 1-2% of TEV. But I am not sure about the lega... Read More
How do I shade every 3rd row instead of alternate rows?
Full Question:
I had a follow-up question to the auto row shading taught in the Advanced Excel for Data Analysis class - what would the formula be if I wanted every 3, (or 4 or 5) rows colored, rather than every other row?
Full Question:
I had a follow-up question to the auto row shading taught in the Advanced Excel for Data Analysis class - what would the formula be if I wanted every 3, (or 4 or 5) rows colored, rather than every other row?
RE: How do I simplify sensitivity analysis in a financial model?
Regarding your question on the sensitivity - this is actually something that is covered in detail in our Advanced Excel for Data Analysis class! You basically want to create an inputs page of scenarios that list all the different variables. Then using the choose function, you set the case and th... Read More
Regarding your question on the sensitivity - this is actually something that is covered in detail in our Advanced Excel for Data Analysis class! You basically want to create an inputs page of scenarios that list all the different variables. Then using the choose function, you set the case and th... Read More
RE: How is the WACC - cost of debt affected by a tax benefit?
Recall that WACC and therefore, the cost of debt is based on marginal, incremental borrowing rate. You are always trying to capture a "normalized" run-rate discount rate. The fact that you have NOL's (tax benefit) should be irrelevant because again, one is trying to capture normalized tax rate and t... Read More
Recall that WACC and therefore, the cost of debt is based on marginal, incremental borrowing rate. You are always trying to capture a "normalized" run-rate discount rate. The fact that you have NOL's (tax benefit) should be irrelevant because again, one is trying to capture normalized tax rate and t... Read More
RE: Do you include pension liability in firm value?
Generally, in a standalone valuation context, such as a trading comps analysis, unfunded pension liabilities are not adjusted for. Trading comps attempt to quantify the current market valuation parameters. Unfunded pension liabilities are not considered part of the capital structure as it is not a f... Read More
Generally, in a standalone valuation context, such as a trading comps analysis, unfunded pension liabilities are not adjusted for. Trading comps attempt to quantify the current market valuation parameters. Unfunded pension liabilities are not considered part of the capital structure as it is not a f... Read More
RE: For the WACC, should I use YTM or coupon for cost of debt?
For WACC, you are supposed to use YTM, but for non-distressed, run-rate firms, we generally end up using coupon rate. For option-embedded bonds (putable, callable, exchangeable, convertible etc) technically neither YTM or coupon works since you must then incorporate TOTAL expected return on the capi... Read More
For WACC, you are supposed to use YTM, but for non-distressed, run-rate firms, we generally end up using coupon rate. For option-embedded bonds (putable, callable, exchangeable, convertible etc) technically neither YTM or coupon works since you must then incorporate TOTAL expected return on the capi... Read More
RE: Why is minority interest NOT included in M&A analysis?
Minority Interest: when you buy a company, you don't pay for MI because you aren't buying out the minority shareholders. For standalone Enterprise Value Value calculations, you include it because 100% of the subsidiary is on your books. The Enterprise Value includes the effect of 100% of the consoli... Read More
Minority Interest: when you buy a company, you don't pay for MI because you aren't buying out the minority shareholders. For standalone Enterprise Value Value calculations, you include it because 100% of the subsidiary is on your books. The Enterprise Value includes the effect of 100% of the consoli... Read More
Full Question: A company XYZ has a different book tax versus cash tax. How does that impact their FCF? And if they tell you that their book tax is 25% vs cash tax is 15%, how do you adjust for it in the FCF statements and analysis? Also, what is the difference, if any, between book tax vs GAAP tax?... Full Question:
A company XYZ has a different book tax versus cash tax. How does that impact their FCF? And if they tell you that their book tax is 25% vs cash tax is 15%, how do you adjust for it in the FCF statements and analysis? Also, what is the difference, if any, between book tax vs GAAP tax? Read More