Posts by: Guest 1
Net Debt and Working Capital
Net debt includes all debt - short and long-term less excess cash. The revolver is often an operating line secured by accounts receivable. I have seen analysts calculate net debt as long-term debt net of working capital surplus/deficiency. Is this correct? When I want to use an EBITDA multiple ... Read More
Net debt includes all debt - short and long-term less excess cash. The revolver is often an operating line secured by accounts receivable. I have seen analysts calculate net debt as long-term debt net of working capital surplus/deficiency. Is this correct? When I want to use an EBITDA multiple ... Read More
Merger Modeling Basics: About the Cash balance on target
Hi there, In our model we assume that the Target's current debt is refinanced. As such, we set our Debt and Equity financing to the Target's Enterprise Value. By doing that we're saying that from the Target's existing Total Debt of $50m, we are refinancing it using: $22.5m equity (as per the 50% ... Read More
Hi there, In our model we assume that the Target's current debt is refinanced. As such, we set our Debt and Equity financing to the Target's Enterprise Value. By doing that we're saying that from the Target's existing Total Debt of $50m, we are refinancing it using: $22.5m equity (as per the 50% ... Read More
Re: Problem with choose and average formulas
All of my formulas were correct (I am typing now at my home computer, which has a sticky keyboard - hence the missing Q and other letters in my message.) However, the problem was solved in my company x model at least in part because I was able to remove a circular reference elsewhere in the formula... Read More
All of my formulas were correct (I am typing now at my home computer, which has a sticky keyboard - hence the missing Q and other letters in my message.) However, the problem was solved in my company x model at least in part because I was able to remove a circular reference elsewhere in the formula... Read More
Deferred Tax
Hi, I took the accounting bootcamp and I recall the discussion regarding deferred tax; however, I tried finding some additional examples online to reinforce this concept in my mind and came across something which confuses me even more than before! In short, I realize deferred tax is basically due... Read More
Hi, I took the accounting bootcamp and I recall the discussion regarding deferred tax; however, I tried finding some additional examples online to reinforce this concept in my mind and came across something which confuses me even more than before! In short, I realize deferred tax is basically due... Read More
Re: Estimated Taxes
Hi, I am having trouble understanding the impact of NOL on the cash flow statement. Correct me if I'm wrong on this: If I apply a NOL carry forward this year to reduce my taxable income, my net income will increase by tax rate x NOL balance. On my cash flow statement, my cash has already increased... Read More
Hi, I am having trouble understanding the impact of NOL on the cash flow statement. Correct me if I'm wrong on this: If I apply a NOL carry forward this year to reduce my taxable income, my net income will increase by tax rate x NOL balance. On my cash flow statement, my cash has already increased... Read More
Free Cash Flow Tax Adjustment for Depreciation
When estimating free cash flows for a valuation, every reference I have explains to add back depreciation & amortization to NOPAT. Â I know that this is because the D&A cash flows are only book implied. Â However, at what point do you adjust cash flows for the real effect of the tax shield t... Read More
When estimating free cash flows for a valuation, every reference I have explains to add back depreciation & amortization to NOPAT. Â I know that this is because the D&A cash flows are only book implied. Â However, at what point do you adjust cash flows for the real effect of the tax shield t... Read More
Original Issuer Discount
Got a quick question for you re OID: am I correct to assume that it works as follows: I borrow $100 from the bank (with a 5 year maturity), but it has a 25% OID. So, I only get $75 in cash. So, my balance sheet would show: 75 increase to cash, 100 debt liability, and 25 current asset of OID. Let'... Read More
Got a quick question for you re OID: am I correct to assume that it works as follows: I borrow $100 from the bank (with a 5 year maturity), but it has a 25% OID. So, I only get $75 in cash. So, my balance sheet would show: 75 increase to cash, 100 debt liability, and 25 current asset of OID. Let'... Read More
Leveraged Buyout Overview: About LBO Overview
Hi there, As usual, I have a couple of questions/validations to make sure I fully understood the concepts here to move on to the Q&D Basic LBO Model course: (1). Is goodwill created only when when we purchase 100% of the target company? What's the relationship between GW creation and the %... Read More
Hi there, As usual, I have a couple of questions/validations to make sure I fully understood the concepts here to move on to the Q&D Basic LBO Model course: (1). Is goodwill created only when when we purchase 100% of the target company? What's the relationship between GW creation and the %... Read More
Share Repurchase
Hi WST, I remember that in the advance financial modeling course that you used the trailing basis for the projected EPS to calculate the company share repurchase. I am just curious why was "trailing EPS" used instead of the projected EPS? Was it because the EPS projection was not complet... Read More
Hi WST, I remember that in the advance financial modeling course that you used the trailing basis for the projected EPS to calculate the company share repurchase. I am just curious why was "trailing EPS" used instead of the projected EPS? Was it because the EPS projection was not complet... Read More
Hey Hamilton, got a quick theoretical question for you re the WACC and delevering beta: is there any theoretical defense for assuming that all of the comps’ betas get delivered assuming a standard 35% tax rate? Or do you have to delever comps’ betas using each company’s individual tax rate? Iâ... Hey Hamilton, got a quick theoretical question for you re the WACC and delevering beta: is there any theoretical defense for assuming that all of the comps’ betas get delivered assuming a standard 35% tax rate? Or do you have to delever comps’ betas using each company’s individual tax rate? I’d assume you have to use each company’s individual tax rate, because that will impact the cost of their debt. Read More