Accounting Bootcamp- Short term debt CFO or CFF
In the the Accounting Bootcamp video module, as part of our discussion of the Cash Flow Statement, we've outlined the following formula: CFO = change in CL - Change in other CA + R - Exp. (w. non-cash items added back). In the JPMC case, where we're applying the said formula, the instructor class... In the the Accounting Bootcamp video module, as part of our discussion of the Cash Flow Statement, we've outlined the following formula:
CFO = change in CL - Change in other CA + R - Exp. (w. non-cash items added back).

In the JPMC case, where we're applying the said formula, the instructor classified the change in short-term debt under CFF instead of CFO (being that Short term debt is a CL). While I understand that debt is a financing option, it eludes me as to why short term obligations, part of the core operating activity of a firm is not classified under CFO. Especially, considering that on the balance sheet, short term debt is included in the CL total. Moreover, doesn't GAAP state that obligation that mature w/i a year are CL? Am I missing something here? While the said classification of Short term Debt under CFF did not prevent me from finding the correct answer, it definitely negatively impacted my understanding of management's decision. So, Thank you for clarifying. Read More

Automatically Importing Formatted Data
I'm importing data from Microsoft Access, and one column is a list of dates. When I paste this data into Excel and apply a filter, so I can sort the dates chronologically, it only offers text filters. There are no date filters to sort by date. I have tried changing the format to Date using both t... I'm importing data from Microsoft Access, and one column is a list of dates. When I paste this data into Excel and apply a filter, so I can sort the dates chronologically, it only offers text filters. There are no date filters to sort by date.

I have tried changing the format to Date using both the wall street macros and the format menu. I have also tried creating a list of dummy dates, getting the filter to recognize it as a list of dates with the correct options, then paste my list below the dummy dates. None of this works.

How do I get excel to recognize the column as a list of dates and not as text? Read More

Corporate Valuation: DCF valuation
Just a quick question,, is it fair to conclude that the DCF Valuation is the most important method and the most popular one used by firms? At least, as a Beginning point to the valuation process? Thanks,

Noor

Liabilities and Interest Expense
In the "Financial Statement Analysis" video, he says that we should only include "Interest-Bearing Negotiated Securities" (IBNS's) as Liabilities in the A=L+OE equation because we are only interested in capital structure. My first question is why are IBNS's any different from ot... In the "Financial Statement Analysis" video, he says that we should only include "Interest-Bearing Negotiated Securities" (IBNS's) as Liabilities in the A=L+OE equation because we are only interested in capital structure.

My first question is why are IBNS's any different from other debt and debentures? If I issue a bond or note to raise $100k and use it to buy equipment, how is that different from going to a leasing company to finance the same $100 of equipment? (other than the first scenario produces a debenture that has claim on all the assets of the business in the event of default)

Do they not both equate to capital structure in the sense that they both financed PP&E for the company?

My second question is: assuming that we are only supposed to include IBNS's in the liabilities, does that mean the line item for interest expense on the Income Statement should only include interest relating to IBNS's?

If not, how do we resolve the difference between only having IBNS's on the BS and all interest on the income statement?

If so, please explain why? and where then would the other debt or debenture income and expense be posted on the income statement?

Thanks
Rick Read More

Purchase Price Allocation
Hi there, I have two questions related to Purchase Price Allocation that I believe you may be able to help me with: 1. Do you know why we write-off the entire Existing Deferred Tax Liability (DTL) balance from the Target’s balance sheet during Purchase Price Allocation? 2. Also, in some model... Hi there,

I have two questions related to Purchase Price Allocation that I believe you may be able to help me with:

1. Do you know why we write-off the entire Existing Deferred Tax Liability (DTL) balance from the Target’s balance sheet during Purchase Price Allocation?

2. Also, in some models analysts write-down the Deferred Revenue balance on target's balance sheet after the transaction closes (say in Year 1, for example). Do you understand the rationale for that?

Thanks in advance and I would really appreciate your help. Read More